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Elevance Reports Good News But Cautions On Medicaid

Elevance Health reported relatively good financial news for Q3 but warned investors about challenges in the Medicaid market. Ongoing eligibility determinations as well as changes to state programs are increasing the acuity of its membership. The company said its Medicaid margins will drop 125 basis points year over year in 2026 due to the eligibility changes and high utilization. This is before widescale reductions take place under the One Big Beautiful Bill Act (OBBBA). Insurers have complained that state Medicaid rates have not recognized actual costs after post-pandemic policy shifts in enrollment.

The other major moving part is the expiration of the enhanced Exchange subsidies, which could leave a sicker cohort and increased risk and costs in that line as well. Elevance also trimmed its Medicare Advantage (MA) footprint to stabilize that line. Its Carelon services entity did not meet investor expectations.

Elevance posted a medical loss ratio, a marker of spending on patient care, of 91.3% — up compared to 89.5% same time last year. Elevance did post double-digit year-over-year growth for both revenue and profits. It had $1.2 billion in profit for the third quarter, up 17% from the $1 billion for the third quarter of 2024. Revenues for the quarter were $50.7 billion, an increase of 12.4% from the $45.1 billion reported in the prior-year quarter. Elevance had $5.1 billion in profit for the first nine months of 2025, down 8% compared to the $5.7 billion in earnings reported through the first three quarters of 2024. Revenues across the first three quarters of 2025 were $149.4 billion, an increase of 13.5% year over year.

In other news, Point32Health has cut an additional 254 jobs to reduce its costs.

Additional articles: https://www.fiercehealthcare.com/payers/elevance-health-shares-rise-premarket-q3-earnings-revenue-beat and https://www.healthcaredive.com/news/elevance-outperforms-q3-2025-warns-medicaid-challenges/803326/ and https://www.beckerspayer.com/financial/elevance-q3-income-up-over-17/ and https://www.beckerspayer.com/workforce/point32health-to-cut-254-jobs/

(Some articles may require a subscription.)

#elevancehealth #exchanges #medicareadvantage #medicaid #managedcare #margins

https://www.modernhealthcare.com/insurance/mh-elevance-health-medicaid-2026/

11^th Vote To Reopen Government Voted Down By Democrats

Senate Democrats voted against reopening the federal government for the 11th time Monday, making the government shutdown continue. The chamber voted 50-43 on the House-passed continuing resolution, which needed 60 votes to pass. The same three Democratic caucusing senators voted with Republicans and one debt-and-deficit-hawk Republican voting with Democrats.

At the same time, Senate Majority Leader John Thune, R-SD, said the government shutdown has dragged on for so long that the GOP-controlled House may need to come back to Washington to pass a new stopgap funding bill. There are just 4 weeks left on the measure passed by the House and failing in the Senate.

And Rep. Chip Roy, R-TX, floated the use of the “nuclear option” to end the shutdown and get around Senate filibuster rules that require a 60-vote majority to pass a bill. Thune opposes the idea. Thune is right on this.

Meanwhile, the Trump administration asserted it could lay off about 1,000 employees despite a judge’s ruling, but the judge weighed back in and barred it.

 Additional articles: https://thehill.com/homenews/senate/5563802-thune-house-dc-government-funding-shutdown/ and https://www.fiercehealthcare.com/regulatory/shutdown-tracker-cms-issues-billing-guidance-hhs-furloughs-32000-employees and https://thehill.com/homenews/5563484-senate-filibuster-republican-debate/

#governmentshutdown #congress #trump #healthcare #coverage

https://thehill.com/homenews/senate/5564176-government-shutdown-vote-senate

Medicare Advantage Plans Want Fewer Members

Modern Healthcare covers a real oddity – Medicare Advantage (MA) plans want fewer members. Given upside down financials right now and the need to get back to investor margins, MA plans are trying all things to ensure they do not get members into plans that are underwater or even less profitable. The past few years and into 2026, the plans are eliminating commissions on a number of their plans and products. In addition, marketing budgets overall appear to be being reduced dramatically.

The lack of commissions, reduced marketing, and overall contraction of offerings has led the Centers for Medicare and Medicaid Services (CMS) to predict an actual contraction of 900,000 enrollees in 2026 compared with 2025. I see why they see a sea change, but I still have my doubts that we will see an actual contraction. Clearly growth will come down from a reduced rate in 2025. It might even be flat perhaps. But contract? Wow that we are even talking about it. How times change.

(Article may require a subscription.)

#medicareadvantage #enrollment #marketing

https://www.modernhealthcare.com/insurance/mh-medicare-advantage-marketing-unitedhealthcare-aetna-centene

Hospitals Hate Price Reform: CHA Sues State Over Price Caps

The oblivious-to-the-true-healthcare-crisis hospitals are once again trying to cripple reforms to price in the system. The California Hospital Association (CHA) has filed a lawsuit against the state’s Office of Health Care Affordability, arguing the agency’s price caps on hospitals are unlawful and will threaten critical access to patients in need. Chicken Little is back!

The arguments are old news from the hospital lobby playbook. The main goal is to continue to safeguard bloated price masters and bureaucracies at the expense of the American people.

The state agency is imposing a 3.5% statewide spending growth target for 2025, declining to 3% by 2029, as well as lower targets for existing price outlier hospitals. The CHA hides behind the fact that premiums are increasing by 10%, arguing the efforts have not worked. Yet, much of that is utilization increases as well as price hikes at hospitals and for drugs – the two big areas increasing in healthcare.

Of course, America as a whole should push for such reforms as price, driven in large measure by hospital care, is a huge outlier in America compared with other developed countries. Because federal officials refuse to take the healthcare crisis seriously, more and more states are pushing reform by establishing various caps on hospital and other costs.

As a recent Health Affairs Forefront blog argues, hospitals are about a third of all healthcare and are highly concentrated. This in and of itself leads to high price and ongoing inflation. Hospitals are increasingly buying physicians to drive practice patterns to expensive hospital or hospital-owned settings.

States are using various price caps on hospitals, including for state insurance plans, caps in the commercial market, rate-setting for various lines of business, and even global all-payer rate-setting. As the authors note, these changes have the potential to save big dollars and right-size spending. This is what the hospitals really fear.

Another Health Affairs study finds that commercial insurance prices were 78% higher in hospital outpatient settings compared with ambulatory surgical centers in 2024. This is what hospitals are protecting.

In related news, another Health Affairs Forefront article finds that four years’ worth of federal price transparency rule filings have revealed costly inefficiencies, obfuscation, and an immensely complex system of payer-provider contracts and payments. Transparency has given us at least a glimpse at how broken price is.

Additional articles: https://www.healthaffairs.org/content/forefront/states-using-hospital-price-caps-save-money and https://www.healthaffairs.org/content/forefront/transparency-reveals-health-care-prices-and-billing-and-payments-system-need-overhaul and https://www.beckerspayer.com/research-analysis/commercial-insurance-prices-78-higher-in-hopds-vs-ascs-study/

(Some articles may require a subscription)

#hospitals #rates #margins #employercoverage #transparency #pricetransparency #healthplans 

https://www.beckershospitalreview.com/finance/california-hospital-association-sues-state-over-unattainably-low-spending-caps/

Oz Still Demanding Greater Medicare Advantage Accountability

At a Better Medicare Alliance event Wednesday, Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz declared his support for Medicare Advantage (MA) but argued the plans could improve in several areas. Specifically cited were improper payments and prior authorization. Oz previously announced a voluntary plan agreement to streamline and limit prior authorizations as well as a new CMS program to conduct risk adjustment audits on 100% of MA contracts every payment year.

The latter initiative was hit with a major roadblock when a federal judge struck the rule governing how the agency would carry out such audits. CMS did not respond to a request for comment on whether it plans to repromulgate the audit rule and Oz stayed mum during the event but has implied he wants to continue the robust audit efforts.

Oz specifically called out the use of home health risk assessments and the coding inflation that occurs through them. A number of studies indicate that many diagnoses reported on these assessments never end up reported on encounters by doctors.

Overall, Oz said he believes MA is important to tackling mounting costs and wants to team up with the private sector on solutions instead of relying on government dictates.

I have a risk adjustment blog running tomorrow at the blog tab.

#medicareadvantage #overpayments #riskadjustment #radv

https://www.healthcaredive.com/news/oz-medicare-advantage-upcoding-reform-support/802879

Lown Finds Overuse Of Unnecessary Back Surgeries

The respected Lown Institute, a healthcare researcher and policy group, has found that hospitals performed over 200,000 unnecessary back surgeries on older adults over a three-year period in Medicare. The hospitals billed a total of more than $1.9 billion for what Lown says are low-value services.

Lown also found that 60% of total overuse for spinal fusion/laminectomies came from the 10% of worst offender physicians. It notes that these unnecessary procedures cause a rise in serious complications. One example: spinal fusion complications occur in up to 18% of patients and can lead to stroke, pneumonia, or death.

Lown looked at Medicare fee-for-service (FFS) claims from 2021 to 2023 and Medicare Advantage (MA) claims from 2020 to 2022 for rates of spinal fusions/laminectomies and vertebroplasties that met the researchers’ criteria of a low-value procedure based on the patient’s clinical presentation at the time of admission.

There were disparities by facility in terms of the overuse. The Cleveland Clinic and the University of Michigan Health System had vertebroplasty overuse rates below 1%, while AdventHealth Orlando and Mayo Clinic Hospital Phoenix had 23% and 17% overuse. The same Mayo Clinic location scored well on spinal fusion/laminectomy overuse with a 6.3% rate, while the Hospital of the University of Pennsylvania had a 33.3% overuse rate and Stanford Hospital had one of 22.7%.

Interestingly, the procedures are among 17 services targeted in a new proposed Center for Medicare and Medicaid Services (CMS) voluntary prior authorization pilot called the Wasteful and Inappropriate Service Reduction (WISeR) model. This will run in six states for six years beginning Jan. 1.

CMS knows there is a problem here, yet it has put massive constraints on the use of prior authorization in MA through a 2024 rule that forces the private plans to follow the traditional FFS Medicare program policies and largely prohibits the use of MA plan criteria even if evidence-based. In fact, hospital admissions are now the exclusive decision of providers and not plans. With more and more providers owned by hospitals, they are likely being ordered by their hospital bosses to conduct such surgeries whether needed or not.

The 2024 rule should be revisited given the results of the Lown analysis.

#medicare #medicareadvantage #priorauthorization

https://www.fiercehealthcare.com/providers/medicare-spent-19b-unnecessary-back-surgeries-over-3-years-report-finds

More Star Rating News

Modern Healthcare has done a follow-up Star rating article. It notes that several provider-owned insurers saw big drops in the percentage of Medicare Advantage (MA) members in plans rated at least four Stars. Some Blue Cross and Blue Shield companies also reported declines. Startup insurers also had mixed reviews.

Among the plans getting hit:

• Blue Bross and Blue Shield of Alabama
• Clover Health
• Excellus Blue Cross Blue Shield
• Devoted Health (but it also had success in other areas)
• Sanford Health Plan
• Sharp Health Plan
• CommunityCare Senior HealthPlan
• Blue Cross and Blue Shield of Nebraska

Big Blue winners included:

• Blue Shield California
• Florida Blue
• Elevance Health
• Independence Blue Cross

(Article may require a subscription.)

#cms #medicareadvantage #stars #quality

https://www.modernhealthcare.com/insurance/mh-medicare-advantage-ratings-2026-bcba-clover-health

Trump Strikes Drug Price Deal With AstraZeneca

A second brand drug maker has struck a deal with President Donald Trump on lowering drug prices. AstaZeneca agreed to terms similar to Pfizer with a few additions.

The agreement provides that all drugs in Medicaid are subject to most-favored-nation pricing. As well, AstraZeneca will offer medicines at a deep discount off the list price when selling directly to American patients. The drugs will appear like Pfizer’s on the new TrumpRx website.

Three items are not seen in the Pfizer deal. AstraZeneca agrees that MFN will apply to future innovator drugs introduced. AstraZeneca will repatriate increased foreign revenue on existing products that AstraZeneca realizes. And the company will invest $50 billion in U.S. manufacturing and research and development.

The deal will exempt AstraZeneca from the 100% tariffs the Trump administration wants to impose on brand drugs.

In a blog this week, I questioned whether this was true drug price reform because the lower prices do not seem to apply to Medicare or employer/commercial pricing. That is how I viewed the Pfizer. Here, the same applies except for the commitment to applying MFN to future drugs. It is very unclear. Does MFN apply to the Medicaid and self-pay commitment or broadly to all pricing? If MFN is broadly applied by AstraZeneca, that is material progress on the Pfizer deal. But it still is not MFN throughout the entire healthcare system as desired.

Additional article: https://www.beckershospitalreview.com/pharmacy/trump-strikes-drug-pricing-deal-with-astrazeneca/

#drugpricing #mfn #irp #branddrugmakers

https://thehill.com/policy/healthcare/5550375-astrazeneca-trump-mfn-policy

Star Ratings Stable For SY 2026

Despite the government shutdown, the Star Year 2026 Ratings data tables are out. The three-year downturn in Star ratings appears to have ended, but SY 2026 was relatively flat to SY 2025. The average Star rating moved from 3.65 in SY 2025 to 3.66 in SY 2026.

Of the 481 MA contracts rated in both SY 2025 and SY 2026, about 29% (140) of contracts saw ratings drop a half a Star or more, 26% (125) of contracts saw ratings increase a half a Star or more, and about 45% (216) stayed the same.

The number of contracts at 4 and greater is about the same at just over 200. I suspect enrollment in these plans is about the same too, which was about 64% in 2025. But about a quarter of contracts at 4 or greater are different.

As in the past there was volatility among the high performers. From SY 2025 to SY 2026, there were 36 new contract entrants to the exclusive category of 4.5 and 5 (91 contracts), while 38 contracts dropped out. Of those in the club before, 7 went up and 5 down.

What happened with the big players?

• UnitedHealthcare 4 Star plus enrollment went up from 71% to 78%.
• Humana 4 Star plus enrollment went down from 25% to 20%.
• Elevance Health 4 Star plus enrollment went up from 40% to 45%.
• Centene saw its 4 Star plus enrollment go from about 0% to 20%.

In general, the big plans remain in the Star doldrums compared with past performance.

(Article may require a subscription.)

#stars #medicareadvantage #quality #cms

https://www.modernhealthcare.com/insurance/mh-medicare-advantage-stars-unitedhealth-humana-centene-aetna-elevance/

More Brand Drug Makers Scramble To Make Deals With Trump

Big brand drug makers are scrambling to make deals with President Trump after Pfizer scored White House praise for making drug price concessions. Some of the other firms are upset with Pfizer as it increases pressure on them to cut deals as well. The White House says agreements could be announced as soon as this week, but the timing could slip.

I have a blog coming tomorrow on drug price reform so far this year and why the brand drug makers are hoodwinking Trump and his advisors with these deals. See it at the blog tab tomorrow.

In other news, a federal appeals court unanimously rejected a Novo Nordisk challenge to Medicare’s drug price negotiation program for 2025 negotiations. The ruling will allow the government to lump together products with the same ingredients for the purpose of choosing drugs for negotiation. Novo Nordisk argues the government was limited to negotiating 15 drugs and could not bundle some together, such as insulins and GLP-1 weight loss drugs.

Judges have ruled against drug makers and their supporters at least 15 times since the Medicare drug negotiation law came into effect.

Final guidance for the third round of Medicare drug price negotiations (2026 negotiations for 2028 prices) was also announced and Health Affairs Forefront blog does a good job outlining it. The 2025 negotiation results for 2027 pricing of 15 drugs will come out in late November.

Additional articles: https://www.statnews.com/2025/10/07/appeals-court-ruling-medicare-price-negotiations-novo-nordisk/ and https://www.healthaffairs.org/content/forefront/administration-releases-medicare-drug-price-negotiation-program-final-guidance-2028

(Some articles may require a subscription.)

#drugpricing #branddrugmakers #ira #trump

https://www.statnews.com/2025/10/07/trump-drug-pricing-deals-with-pharma-companies-after-pfizer/