This is Jacob Emerson with the Becker's Payer
Issues podcast.
Here is your biweekly industry news briefing for
November 18th.
The US Justice Department is suing UnitedHealth Group
and home health company Amedisys over the company's
planned $3,300,000,000
merger.
The lawsuit was filed in a Maryland federal
court on November 12 and comes over concerns
of lessened competition in the home health market
because the 2 companies are direct competitors
per the DOJ.
UnitedHealth representatives have met with the government in
recent weeks to make the case for the
acquisition.
The lawsuit claims that the purchase could increase
home health care prices across 23 states and
in Washington DC. The attorneys general of Maryland,
Illinois, New Jersey, and New York have also
joined the complaint.
UnitedHealth's Optum first announced its plans to merge
with Amedisys in June of 2023.
The company is based in Baton Rouge, Louisiana.
It was founded in 1982, and it provides
home health, hospice, and high acuity care services
across more than 500 care centers in 37
states and DC.
The proposed merger has been under an antitrust
review by the DOJ since August of last
year. This March, Oregon regulators opened their own
review after a preliminary report in the state
found that the deal could hurt competition in
Oregon's home health markets.
Amedisys shareholders approved the acquisition internally in September
of last year.
UnitedHealth has rapidly grown its home care capabilities
in recent years. Last year, the company closed
on a $5,400,000,000
acquisition of home health firm LHC Group, which
operates more than 900 facilities nationwide.
If the company's acquisition of Amedisys is approved,
then UnitedHealth would own around 10% of the
home health market with significant overlap in some
southern states. Also, this June, Nemetasys and UnitedHealth
agreed to sell an unknown number of care
centers to Vital Caring Group to make the
deal more palatable to regulators.
Well, Centene's president, Ken Fasola, plans to retire
in July of 2025.
He will end his duties as president by
the end of this year and transition
to a strategic adviser role for the first
half of next year. He was previously the
CEO of Magellan Health, which was acquired by
Centene in 2022.
The company named him president in
December of 2022.
Well, CMS will give less weight to call
center metrics in future Medicare Advantage star ratings.
Speaking at the Milken Institute Future of Health
Summit on November
13th, doctor Meena Shashami,
an a deputy CMS administrator and director of
the Center For Medicare,
said that the agency will wait call centers.
His direct quote was we have already put
in place that call centers will have a
smaller weighting on star ratings moving forward. It
takes time for these things to work their
way through because of constantly looking at the
methodology.
According to CMS documents, for plan year 2026,
the agency will decrease the weighting of measures
capturing access, including call center availability.
The agency will add 3 new patient care
measures to its weightings.
The comments from CMS come after several major
insurers have sued the agency to dispute their
star ratings for 2025.
Some insurers
won lawsuits over that issue last year. Centene
and UnitedHealthcare
have disputed the inclusion of secret shopper phone
calls that they say hurt their star ratings.
Well, payer executives have expressed confidence in the
continuation
of enhanced subsidies in some form past 2025.
Enhanced subsidies, which help individuals with incomes up
to 400% above the federal poverty line afford
ACA coverage, will expire at the end of
2025 without congressional action.
Subsidies have spurred record enrollment in 20 ACA
plans.
Republicans will control the presidency and both chambers
of congress in 2025
and that and they could let the enhanced
subsidies a sunset.
But on earlier this month in November,
executives
such as Oscar Health CEO, Mark Bertolini, said
that his company believes both parties have an
incentive to extend the subsidies. He said we're
currently at a historic low in the US
of below 8% of uninsured.
Going the other way would only confound the
inflationary impacts that the current race focused around
and resulted in the former president Trump being
reelected.
He also said that there will be likely
some changes to subsidies under a Republican administration.
More than 60% of Oscar's membership is in
Republican led state, he said, indicating the durability
of the program across party lines. He said
this is a product that's here to stay,
and there is every intention to make sure
that we don't create an inflationary pressure as
a result of pulling back subsidies and pushing
people out of health care and into uncompensated
care.
Last month, in October, Centene's CEO, Sarah London,
said the ACA marketplace serves as a strong
bipartisan base and is a powerful platform to
expand affordable health care coverage and access to
individuals
across the country.
Payer executives have also said they remain committed
to the marketplace whether subsidies are extended or
not.
Well, Blue Cross and Blue Shield of Massachusetts
has reported a $114,000,000
operating loss in the 1st 9 months of
the year partly due to skyrocketing claims for
GLP 1 medications.
The company's after tax 3rd quarter net income
of $29,200,000,
that was on revenue of $2,400,000,000,
again, in the Q3.
Year to date, the company has reported a
net income of $27,100,000
on revenue of 7,200,000,000.
The company's operating loss in the Q3 was
$19,800,000.
Compared to a year ago, q three operating
income is down a $145,000,000,
and net income is down a 135,000,000.
2000 members are starting GLP 1 medications with
the insurer every month, and spending on that
drug class has risen by 250%
since last year, putting the company on track
to spend nearly $200,000,000
on the medications
in 2024.
And finally, WPS Health Solutions is laying off
313
employees in Wisconsin due to competitive industry pressures
and federal contract losses. The layoffs will begin
to take place in Monona and Madison, Wisconsin
on January 21st next year according to regulatory
documents the insurer filed with the state.
WPS is based in Madison, and it has
around 4,000 total employees.
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