1 00:00:00,240 --> 00:00:02,720 This is Jacob Emerson with the Becker's Payer 2 00:00:02,720 --> 00:00:03,859 Issues podcast. 3 00:00:04,240 --> 00:00:07,759 Here's your biweekly industry news briefing for January 4 00:00:07,759 --> 00:00:08,259 6th. 5 00:00:09,279 --> 00:00:12,080 The majority of health plan executives say they're 6 00:00:12,080 --> 00:00:15,155 focused on growth and have a favorable outlook 7 00:00:15,155 --> 00:00:16,135 for 2025. 8 00:00:16,995 --> 00:00:19,335 That's according to a new survey from Deloitte. 9 00:00:19,795 --> 00:00:22,935 Between August September of last year, Deloitte surveyed 10 00:00:22,994 --> 00:00:25,815 40 c suite executives from large health plans 11 00:00:25,875 --> 00:00:28,269 and large health systems nationwide 12 00:00:28,809 --> 00:00:30,589 with revenues greater than $500,000,000. 13 00:00:31,289 --> 00:00:33,530 Do you identify the top trends expected to 14 00:00:33,530 --> 00:00:34,829 affect business strategies 15 00:00:35,369 --> 00:00:39,369 this year? Among those respondents, 65% said developing 16 00:00:39,369 --> 00:00:40,475 growth strategies 17 00:00:41,174 --> 00:00:41,674 is 18 00:00:42,054 --> 00:00:43,734 their top priority for the year, and 59% 19 00:00:43,734 --> 00:00:45,734 have a favorable outlook for the year ahead. 20 00:00:45,734 --> 00:00:48,634 A rise in revenues is expected by 69% 21 00:00:48,774 --> 00:00:50,795 of respondents, and a rise in profitability 22 00:00:51,494 --> 00:00:53,239 is expected by 71%. 23 00:00:54,420 --> 00:00:56,820 Overall, large health care companies should be focused 24 00:00:56,820 --> 00:00:59,780 on consumer acquisition and retention, meeting the needs 25 00:00:59,780 --> 00:01:02,920 of those customers, investing in digital platforms, strengthening 26 00:01:03,140 --> 00:01:03,640 cybersecurity, 27 00:01:04,180 --> 00:01:08,099 and prioritizing health equity. Insurers specifically should also 28 00:01:08,099 --> 00:01:11,754 be prioritizing working more closely with employers on 29 00:01:11,754 --> 00:01:12,974 certain health products, 30 00:01:13,275 --> 00:01:16,234 expanding alternative and virtual care sites and consumer 31 00:01:16,234 --> 00:01:19,694 facing digital tech, and enhancing operational efficiencies. 32 00:01:20,439 --> 00:01:23,319 60% of insurance executives expect the adoption of 33 00:01:23,319 --> 00:01:25,739 digital technology to accelerate in 2025, 34 00:01:26,280 --> 00:01:27,180 while 53% 35 00:01:27,640 --> 00:01:30,519 expect that generative AI and other tech like 36 00:01:30,519 --> 00:01:32,780 unlimited reality and digital twins 37 00:01:33,239 --> 00:01:35,340 will impact organizational strategies. 38 00:01:35,995 --> 00:01:38,474 Executives were asked to list the emerging trends 39 00:01:38,474 --> 00:01:40,254 they are tracking most heavily, 40 00:01:40,555 --> 00:01:43,935 and 58% identified AI and automation first. 41 00:01:44,314 --> 00:01:46,715 Many health plans are already using generative AI 42 00:01:46,715 --> 00:01:50,590 for claims processing, underwriting, personalized treatment plans, fraud 43 00:01:50,590 --> 00:01:52,530 detection, and document extraction. 44 00:01:53,150 --> 00:01:55,329 Also among the health plan respondents, 58% 45 00:01:55,709 --> 00:01:58,530 expect that recent and upcoming regulatory changes 46 00:01:58,909 --> 00:02:02,295 will influence their organization's strategies this year, and 47 00:02:02,454 --> 00:02:04,394 63% are already prioritizing 48 00:02:04,694 --> 00:02:05,834 compliance strategies 49 00:02:06,215 --> 00:02:07,674 to address those challenges. 50 00:02:08,854 --> 00:02:11,014 The UnitedHealth Group has been named the world's 51 00:02:11,014 --> 00:02:13,735 largest insurer by net premiums written for the 52 00:02:13,735 --> 00:02:15,895 10th year in a row. That's according to 53 00:02:15,895 --> 00:02:18,849 AM Best annual ranking published this January. 54 00:02:19,310 --> 00:02:21,629 The top 10 insurers in the world by 55 00:02:21,629 --> 00:02:22,129 2023 56 00:02:22,430 --> 00:02:25,310 net premiums written. Number 1 is UnitedHealth Group. 57 00:02:25,310 --> 00:02:28,430 2nd, Centene, and it's Elavance Health. 4th is 58 00:02:28,430 --> 00:02:31,409 Kaiser Permanente. 5th is China Life Insurance Company. 59 00:02:31,865 --> 00:02:34,925 6th is Humana, then State Farm, then Alliance 60 00:02:35,465 --> 00:02:38,264 SE. Number 9 is Berkshire Hathaway. And number 61 00:02:38,264 --> 00:02:40,925 10 is AXA SA out of France. 62 00:02:42,504 --> 00:02:45,465 Well, Elavance Health has completed its acquisition of 63 00:02:45,465 --> 00:02:49,219 Indianapolis based Indiana University Health's insurance business. 64 00:02:49,599 --> 00:02:51,199 With the closure of the deal that was 65 00:02:51,199 --> 00:02:53,680 first announced back in September, IU Health Plans 66 00:02:53,680 --> 00:02:56,019 will now operate as part of Anthem BCBS 67 00:02:56,159 --> 00:02:56,900 of Indiana. 68 00:02:57,439 --> 00:03:01,280 IU Health Plans serves 19,000 Medicare Advantage members 69 00:03:01,280 --> 00:03:02,625 across 36 counties 70 00:03:03,025 --> 00:03:05,585 and just under 10,000 fully insured commercial group 71 00:03:05,585 --> 00:03:07,205 members through employers. 72 00:03:07,664 --> 00:03:10,625 The acquisition of IU's health plans is one 73 00:03:10,625 --> 00:03:13,205 of several that Elavance has announced or completed 74 00:03:13,264 --> 00:03:14,004 in 2024. 75 00:03:14,544 --> 00:03:16,240 The company said back in April that it 76 00:03:16,240 --> 00:03:18,719 plans to acquire Center's plan for Healthy Living, 77 00:03:18,719 --> 00:03:21,039 a New York based Medicaid long term care 78 00:03:21,039 --> 00:03:21,539 plan. 79 00:03:21,840 --> 00:03:24,000 The company also closed on its acquisition of 80 00:03:24,000 --> 00:03:27,539 infusion center and specialty pharmacy operator, Paragon Healthcare. 81 00:03:28,064 --> 00:03:30,465 And in October, the company said it intends 82 00:03:30,465 --> 00:03:32,324 to purchase Nashville based CareBridge, 83 00:03:32,625 --> 00:03:34,644 which is a value based home and community 84 00:03:34,784 --> 00:03:37,905 based care provider for patients with chronic and 85 00:03:37,905 --> 00:03:39,044 complex needs. 86 00:03:40,960 --> 00:03:43,199 Florida Blue is the latest insurer to sue 87 00:03:43,199 --> 00:03:46,319 CMS over its Medicare Advantage star ratings for 88 00:03:46,319 --> 00:03:46,819 2025. 89 00:03:47,520 --> 00:03:49,520 In that lawsuit filed in December in a 90 00:03:49,520 --> 00:03:52,574 federal district court in Washington, attorneys for Florida 91 00:03:52,574 --> 00:03:54,574 Blue argued that CMS did not account for 92 00:03:54,574 --> 00:03:57,395 the effects of natural disasters when it calculated 93 00:03:57,455 --> 00:03:59,715 the insurer's Medicare Advantage star ratings. 94 00:04:00,175 --> 00:04:02,995 Severe flooding in Broward County in April 2023 95 00:04:03,375 --> 00:04:05,775 caused a significant drop in rates of office 96 00:04:05,775 --> 00:04:07,395 visits and prescription refills 97 00:04:07,699 --> 00:04:10,580 for Florida Blues MA plan members according to 98 00:04:10,580 --> 00:04:11,319 the insurer. 99 00:04:11,939 --> 00:04:14,419 Though Florida governor Ron DeSantis and president Joe 100 00:04:14,419 --> 00:04:16,500 Biden declared a state of emergency in areas 101 00:04:16,500 --> 00:04:19,540 affected by the flooding, CMS did not grant 102 00:04:19,540 --> 00:04:20,199 an 1135 103 00:04:20,660 --> 00:04:23,314 waiter, designating a public health emergency for the 104 00:04:23,314 --> 00:04:23,814 flooding. 105 00:04:24,115 --> 00:04:27,795 In 2019, CMS adopted an extreme circumstances rule 106 00:04:27,795 --> 00:04:30,035 to account for the impact of natural disasters 107 00:04:30,035 --> 00:04:31,254 and other uncontrollable 108 00:04:31,634 --> 00:04:32,134 circumstances 109 00:04:32,595 --> 00:04:34,139 that might affect star ratings. 110 00:04:35,020 --> 00:04:37,340 If the flooding in Broward had been granted 111 00:04:37,340 --> 00:04:40,699 public emergency status, Florida Blue's HMO MA plan 112 00:04:40,699 --> 00:04:42,540 would have received a 4 and a half 113 00:04:42,540 --> 00:04:44,379 star rating rather than a 3 and a 114 00:04:44,379 --> 00:04:46,480 half stars for plan year 2025. 115 00:04:47,354 --> 00:04:48,574 According to the payer, 116 00:04:48,954 --> 00:04:50,875 its Medicare Part D plan would have received 117 00:04:50,875 --> 00:04:52,274 a 3 star rather than a 2 and 118 00:04:52,274 --> 00:04:54,394 a half star rating. Florida Blue said it 119 00:04:54,394 --> 00:04:56,394 will lose out on tens of 1,000,000 of 120 00:04:56,394 --> 00:04:58,235 dollars in bonus payments as a result of 121 00:04:58,235 --> 00:05:00,449 those lower ratings, and it is asking the 122 00:05:00,589 --> 00:05:02,849 courts to require CMS to recalculate 123 00:05:03,149 --> 00:05:03,889 those ratings. 124 00:05:04,269 --> 00:05:07,870 Several other insurers have challenged those 2025 ratings 125 00:05:07,870 --> 00:05:10,589 in courts, though on different grounds. In December, 126 00:05:10,589 --> 00:05:13,789 CMS increased the ratings for several UnitedHealth and 127 00:05:13,789 --> 00:05:14,769 Centene plans, 128 00:05:15,185 --> 00:05:18,145 and Humana and Elavance have also filed similar 129 00:05:18,145 --> 00:05:18,645 challenges. 130 00:05:19,985 --> 00:05:22,064 The new California law that went into effect 131 00:05:22,064 --> 00:05:25,185 January 1st will prohibit payers from making coverage 132 00:05:25,185 --> 00:05:27,685 decisions based solely on artificial intelligence 133 00:05:28,169 --> 00:05:28,669 algorithms. 134 00:05:28,970 --> 00:05:31,209 Under that new law, any denial, delay, or 135 00:05:31,209 --> 00:05:33,789 modification of care based on medical necessity 136 00:05:34,250 --> 00:05:36,889 must be reviewed and decided by a licensed 137 00:05:36,889 --> 00:05:40,089 physician or qualified health care provider with expertise 138 00:05:40,089 --> 00:05:42,430 in the specific clinical issues at hand. 139 00:05:43,604 --> 00:05:46,564 California senator Josh Becker, the bill's sponsor, said 140 00:05:46,564 --> 00:05:49,125 that AI has immense potential to enhance health 141 00:05:49,125 --> 00:05:51,125 care delivery, but it should never replace the 142 00:05:51,125 --> 00:05:52,904 expertise and judgment of physicians. 143 00:05:53,285 --> 00:05:55,925 An algorithm cannot fully understand a patient's unique 144 00:05:55,925 --> 00:05:58,290 medical history or needs, and its misuse can 145 00:05:58,290 --> 00:05:59,910 lead to devastating consequences. 146 00:06:01,490 --> 00:06:04,850 And finally, a former chief human resources officer 147 00:06:04,850 --> 00:06:06,790 at Elevance Health, Troy Hennigan, 148 00:06:07,169 --> 00:06:09,329 has filed a lawsuit against the company in 149 00:06:09,329 --> 00:06:12,069 a georgia federal court alleging age 150 00:06:12,395 --> 00:06:13,855 discrimination after his termination 151 00:06:14,235 --> 00:06:17,295 in June of last year. The lawsuit claims 152 00:06:17,355 --> 00:06:19,455 that mister Hannigan, who is 62, 153 00:06:19,995 --> 00:06:23,295 was unlawfully replaced as the CHRO at Carillon 154 00:06:23,514 --> 00:06:25,835 by a younger individual, and he alleges that 155 00:06:25,835 --> 00:06:28,740 his termination violated the age discrimination in employment 156 00:06:28,740 --> 00:06:31,699 act. Elevance denied those allegations in an October 157 00:06:31,699 --> 00:06:32,600 legal response, 158 00:06:32,980 --> 00:06:35,699 asserting that mister Hennigan's termination was based on 159 00:06:35,699 --> 00:06:39,300 legitimate business decisions unrelated to his age. Mister 160 00:06:39,300 --> 00:06:42,365 Hennigan had been with elevance since 2019. According 161 00:06:42,365 --> 00:06:45,324 to the September complaint, his supervisor informed him 162 00:06:45,324 --> 00:06:46,785 in February of 2024 163 00:06:47,245 --> 00:06:49,084 that the company wanted to go in another 164 00:06:49,084 --> 00:06:51,324 direction and hire a younger person for his 165 00:06:51,324 --> 00:06:54,125 role, describing the decision as a win win 166 00:06:54,125 --> 00:06:56,610 because people assumed he wanted to retire. 167 00:06:57,069 --> 00:07:00,669 Mister Hennigan resisted this alleged narrative, proposing to 168 00:07:00,669 --> 00:07:02,669 remain through the end of the year, though 169 00:07:02,669 --> 00:07:04,289 that proposal was rejected. 170 00:07:04,750 --> 00:07:07,069 He claims that his departure was falsely framed 171 00:07:07,069 --> 00:07:08,930 as a retirement in company communications, 172 00:07:09,310 --> 00:07:12,134 and this position was ultimately filled by someone 173 00:07:12,134 --> 00:07:13,754 under the age of 43. 174 00:07:14,454 --> 00:07:17,735 In its response, elevance denied any discriminatory statements 175 00:07:17,735 --> 00:07:20,214 attributed to mister Hennigan's supervisor, such as his 176 00:07:20,214 --> 00:07:22,694 desire to hire a younger person. And the 177 00:07:22,694 --> 00:07:25,089 company is arguing that he agreed to describe 178 00:07:25,089 --> 00:07:27,509 his his departure as a retirement and asserts 179 00:07:27,649 --> 00:07:29,569 that it acted in good faith to comply 180 00:07:29,569 --> 00:07:31,509 with anti discrimination laws. 181 00:07:31,889 --> 00:07:33,810 If you like the latest health insurance industry 182 00:07:33,810 --> 00:07:36,129 news delivered straight to your inbox every morning, 183 00:07:36,129 --> 00:07:38,850 subscribe to the Becker's payer issues enewsletter on 184 00:07:38,850 --> 00:07:40,310 our website at beckerspayer 185 00:07:40,887 --> 00:07:41,387 dotcom.