1 00:00:00,080 --> 00:00:02,399 This is Jacob Emerson with the Becker's Payer 2 00:00:02,399 --> 00:00:03,459 Issues podcast. 3 00:00:03,919 --> 00:00:06,879 Here is your biweekly industry news briefing for 4 00:00:06,879 --> 00:00:07,940 November 18th. 5 00:00:08,480 --> 00:00:11,519 The US Justice Department is suing UnitedHealth Group 6 00:00:11,519 --> 00:00:14,695 and home health company Amedisys over the company's 7 00:00:14,695 --> 00:00:15,594 planned $3,300,000,000 8 00:00:16,695 --> 00:00:17,195 merger. 9 00:00:17,654 --> 00:00:20,054 The lawsuit was filed in a Maryland federal 10 00:00:20,054 --> 00:00:22,875 court on November 12 and comes over concerns 11 00:00:22,934 --> 00:00:25,515 of lessened competition in the home health market 12 00:00:25,800 --> 00:00:28,219 because the 2 companies are direct competitors 13 00:00:28,519 --> 00:00:29,500 per the DOJ. 14 00:00:30,039 --> 00:00:32,920 UnitedHealth representatives have met with the government in 15 00:00:32,920 --> 00:00:35,000 recent weeks to make the case for the 16 00:00:35,000 --> 00:00:35,500 acquisition. 17 00:00:36,119 --> 00:00:38,280 The lawsuit claims that the purchase could increase 18 00:00:38,280 --> 00:00:40,884 home health care prices across 23 states and 19 00:00:40,884 --> 00:00:44,085 in Washington DC. The attorneys general of Maryland, 20 00:00:44,085 --> 00:00:46,325 Illinois, New Jersey, and New York have also 21 00:00:46,325 --> 00:00:47,545 joined the complaint. 22 00:00:48,164 --> 00:00:50,965 UnitedHealth's Optum first announced its plans to merge 23 00:00:50,965 --> 00:00:53,469 with Amedisys in June of 2023. 24 00:00:54,250 --> 00:00:56,590 The company is based in Baton Rouge, Louisiana. 25 00:00:56,810 --> 00:00:58,890 It was founded in 1982, and it provides 26 00:00:58,890 --> 00:01:01,710 home health, hospice, and high acuity care services 27 00:01:02,090 --> 00:01:04,670 across more than 500 care centers in 37 28 00:01:04,730 --> 00:01:06,025 states and DC. 29 00:01:06,484 --> 00:01:08,564 The proposed merger has been under an antitrust 30 00:01:08,564 --> 00:01:10,724 review by the DOJ since August of last 31 00:01:10,724 --> 00:01:13,685 year. This March, Oregon regulators opened their own 32 00:01:13,685 --> 00:01:16,245 review after a preliminary report in the state 33 00:01:16,245 --> 00:01:18,484 found that the deal could hurt competition in 34 00:01:18,484 --> 00:01:19,944 Oregon's home health markets. 35 00:01:20,460 --> 00:01:24,140 Amedisys shareholders approved the acquisition internally in September 36 00:01:24,140 --> 00:01:25,040 of last year. 37 00:01:25,500 --> 00:01:28,400 UnitedHealth has rapidly grown its home care capabilities 38 00:01:28,620 --> 00:01:31,260 in recent years. Last year, the company closed 39 00:01:31,260 --> 00:01:32,000 on a $5,400,000,000 40 00:01:32,859 --> 00:01:35,625 acquisition of home health firm LHC Group, which 41 00:01:35,625 --> 00:01:38,284 operates more than 900 facilities nationwide. 42 00:01:39,144 --> 00:01:41,784 If the company's acquisition of Amedisys is approved, 43 00:01:41,784 --> 00:01:44,104 then UnitedHealth would own around 10% of the 44 00:01:44,104 --> 00:01:46,920 home health market with significant overlap in some 45 00:01:47,079 --> 00:01:50,219 southern states. Also, this June, Nemetasys and UnitedHealth 46 00:01:50,439 --> 00:01:52,439 agreed to sell an unknown number of care 47 00:01:52,439 --> 00:01:54,680 centers to Vital Caring Group to make the 48 00:01:54,680 --> 00:01:56,540 deal more palatable to regulators. 49 00:01:58,200 --> 00:02:00,920 Well, Centene's president, Ken Fasola, plans to retire 50 00:02:00,920 --> 00:02:02,060 in July of 2025. 51 00:02:02,695 --> 00:02:04,695 He will end his duties as president by 52 00:02:04,695 --> 00:02:06,234 the end of this year and transition 53 00:02:06,534 --> 00:02:08,775 to a strategic adviser role for the first 54 00:02:08,775 --> 00:02:11,415 half of next year. He was previously the 55 00:02:11,415 --> 00:02:14,455 CEO of Magellan Health, which was acquired by 56 00:02:14,455 --> 00:02:15,675 Centene in 2022. 57 00:02:16,670 --> 00:02:18,210 The company named him president in 58 00:02:18,830 --> 00:02:20,210 December of 2022. 59 00:02:21,790 --> 00:02:23,870 Well, CMS will give less weight to call 60 00:02:23,870 --> 00:02:27,170 center metrics in future Medicare Advantage star ratings. 61 00:02:27,629 --> 00:02:29,710 Speaking at the Milken Institute Future of Health 62 00:02:29,710 --> 00:02:30,770 Summit on November 63 00:02:31,655 --> 00:02:33,275 13th, doctor Meena Shashami, 64 00:02:33,574 --> 00:02:36,215 an a deputy CMS administrator and director of 65 00:02:36,215 --> 00:02:37,275 the Center For Medicare, 66 00:02:37,574 --> 00:02:40,235 said that the agency will wait call centers. 67 00:02:43,509 --> 00:02:45,669 His direct quote was we have already put 68 00:02:45,669 --> 00:02:47,349 in place that call centers will have a 69 00:02:47,349 --> 00:02:49,990 smaller weighting on star ratings moving forward. It 70 00:02:49,990 --> 00:02:51,590 takes time for these things to work their 71 00:02:51,590 --> 00:02:53,669 way through because of constantly looking at the 72 00:02:53,669 --> 00:02:54,169 methodology. 73 00:02:54,710 --> 00:02:57,370 According to CMS documents, for plan year 2026, 74 00:02:57,830 --> 00:03:00,125 the agency will decrease the weighting of measures 75 00:03:00,125 --> 00:03:02,705 capturing access, including call center availability. 76 00:03:03,165 --> 00:03:05,325 The agency will add 3 new patient care 77 00:03:05,325 --> 00:03:06,784 measures to its weightings. 78 00:03:07,645 --> 00:03:09,885 The comments from CMS come after several major 79 00:03:09,885 --> 00:03:12,599 insurers have sued the agency to dispute their 80 00:03:12,599 --> 00:03:13,740 star ratings for 2025. 81 00:03:14,439 --> 00:03:15,260 Some insurers 82 00:03:15,719 --> 00:03:18,840 won lawsuits over that issue last year. Centene 83 00:03:18,840 --> 00:03:19,500 and UnitedHealthcare 84 00:03:19,800 --> 00:03:22,840 have disputed the inclusion of secret shopper phone 85 00:03:22,840 --> 00:03:25,740 calls that they say hurt their star ratings. 86 00:03:27,245 --> 00:03:29,644 Well, payer executives have expressed confidence in the 87 00:03:29,644 --> 00:03:30,144 continuation 88 00:03:30,525 --> 00:03:33,504 of enhanced subsidies in some form past 2025. 89 00:03:34,604 --> 00:03:37,324 Enhanced subsidies, which help individuals with incomes up 90 00:03:37,324 --> 00:03:40,139 to 400% above the federal poverty line afford 91 00:03:40,139 --> 00:03:42,379 ACA coverage, will expire at the end of 92 00:03:42,379 --> 00:03:44,480 2025 without congressional action. 93 00:03:44,860 --> 00:03:48,379 Subsidies have spurred record enrollment in 20 ACA 94 00:03:48,379 --> 00:03:48,879 plans. 95 00:03:49,500 --> 00:03:52,074 Republicans will control the presidency and both chambers 96 00:03:52,074 --> 00:03:53,215 of congress in 2025 97 00:03:53,514 --> 00:03:55,435 and that and they could let the enhanced 98 00:03:55,435 --> 00:03:56,655 subsidies a sunset. 99 00:03:57,034 --> 00:03:59,375 But on earlier this month in November, 100 00:03:59,754 --> 00:04:00,254 executives 101 00:04:00,635 --> 00:04:03,194 such as Oscar Health CEO, Mark Bertolini, said 102 00:04:03,194 --> 00:04:05,194 that his company believes both parties have an 103 00:04:05,194 --> 00:04:07,719 incentive to extend the subsidies. He said we're 104 00:04:07,719 --> 00:04:09,560 currently at a historic low in the US 105 00:04:09,560 --> 00:04:11,099 of below 8% of uninsured. 106 00:04:11,639 --> 00:04:13,879 Going the other way would only confound the 107 00:04:13,879 --> 00:04:16,759 inflationary impacts that the current race focused around 108 00:04:16,759 --> 00:04:19,495 and resulted in the former president Trump being 109 00:04:19,495 --> 00:04:19,995 reelected. 110 00:04:20,615 --> 00:04:22,134 He also said that there will be likely 111 00:04:22,134 --> 00:04:24,954 some changes to subsidies under a Republican administration. 112 00:04:25,495 --> 00:04:27,814 More than 60% of Oscar's membership is in 113 00:04:27,814 --> 00:04:30,634 Republican led state, he said, indicating the durability 114 00:04:30,694 --> 00:04:32,935 of the program across party lines. He said 115 00:04:32,935 --> 00:04:34,290 this is a product that's here to stay, 116 00:04:34,290 --> 00:04:36,210 and there is every intention to make sure 117 00:04:36,210 --> 00:04:38,529 that we don't create an inflationary pressure as 118 00:04:38,529 --> 00:04:40,930 a result of pulling back subsidies and pushing 119 00:04:40,930 --> 00:04:42,870 people out of health care and into uncompensated 120 00:04:43,170 --> 00:04:43,670 care. 121 00:04:44,689 --> 00:04:47,415 Last month, in October, Centene's CEO, Sarah London, 122 00:04:47,415 --> 00:04:49,654 said the ACA marketplace serves as a strong 123 00:04:49,654 --> 00:04:52,214 bipartisan base and is a powerful platform to 124 00:04:52,214 --> 00:04:54,375 expand affordable health care coverage and access to 125 00:04:54,375 --> 00:04:54,875 individuals 126 00:04:55,254 --> 00:04:56,395 across the country. 127 00:04:56,774 --> 00:04:58,935 Payer executives have also said they remain committed 128 00:04:58,935 --> 00:05:01,889 to the marketplace whether subsidies are extended or 129 00:05:01,889 --> 00:05:02,389 not. 130 00:05:03,649 --> 00:05:05,430 Well, Blue Cross and Blue Shield of Massachusetts 131 00:05:05,649 --> 00:05:06,949 has reported a $114,000,000 132 00:05:08,290 --> 00:05:09,970 operating loss in the 1st 9 months of 133 00:05:09,970 --> 00:05:12,930 the year partly due to skyrocketing claims for 134 00:05:12,930 --> 00:05:14,230 GLP 1 medications. 135 00:05:15,064 --> 00:05:17,384 The company's after tax 3rd quarter net income 136 00:05:17,384 --> 00:05:18,125 of $29,200,000, 137 00:05:19,944 --> 00:05:21,324 that was on revenue of $2,400,000,000, 138 00:05:22,824 --> 00:05:23,884 again, in the Q3. 139 00:05:24,344 --> 00:05:26,104 Year to date, the company has reported a 140 00:05:26,104 --> 00:05:27,245 net income of $27,100,000 141 00:05:28,504 --> 00:05:29,884 on revenue of 7,200,000,000. 142 00:05:30,824 --> 00:05:33,039 The company's operating loss in the Q3 was 143 00:05:33,039 --> 00:05:33,539 $19,800,000. 144 00:05:34,560 --> 00:05:36,399 Compared to a year ago, q three operating 145 00:05:36,399 --> 00:05:38,339 income is down a $145,000,000, 146 00:05:39,039 --> 00:05:40,740 and net income is down a 135,000,000. 147 00:05:42,160 --> 00:05:44,879 2000 members are starting GLP 1 medications with 148 00:05:44,879 --> 00:05:47,564 the insurer every month, and spending on that 149 00:05:47,564 --> 00:05:49,425 drug class has risen by 250% 150 00:05:50,045 --> 00:05:52,205 since last year, putting the company on track 151 00:05:52,205 --> 00:05:53,345 to spend nearly $200,000,000 152 00:05:53,964 --> 00:05:54,705 on the medications 153 00:05:55,165 --> 00:05:55,985 in 2024. 154 00:05:57,645 --> 00:06:00,689 And finally, WPS Health Solutions is laying off 155 00:06:00,689 --> 00:06:01,189 313 156 00:06:01,569 --> 00:06:04,529 employees in Wisconsin due to competitive industry pressures 157 00:06:04,529 --> 00:06:07,329 and federal contract losses. The layoffs will begin 158 00:06:07,329 --> 00:06:09,750 to take place in Monona and Madison, Wisconsin 159 00:06:09,810 --> 00:06:12,790 on January 21st next year according to regulatory 160 00:06:13,089 --> 00:06:15,225 documents the insurer filed with the state. 161 00:06:16,105 --> 00:06:18,185 WPS is based in Madison, and it has 162 00:06:18,185 --> 00:06:20,045 around 4,000 total employees. 163 00:06:20,584 --> 00:06:22,345 If you'd like the latest health insurance industry 164 00:06:22,345 --> 00:06:24,504 news delivered straight to your inbox every morning, 165 00:06:24,504 --> 00:06:26,685 subscribe to the Becker's payer issues enewsletter 166 00:06:27,145 --> 00:06:28,845 on our website at beckerspayer.com.