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FTC Settles With Cigna’s Express Scripts

The Federal Trade Commission (FTC) and Cigna’s Express Scripts pharmacy benefits manager (PBM) reached a settlement that resolves allegations that the PBM artificially drove up prices for insulin. Cases continue against CVS Caremark and OptumRx.

Express Scripts will implement a number of reforms, including:

• It will stop listing preferred drugs at the high wholesale acquisition cost rather than lower cost versions on its standard formularies.
• It will no longer omit drugs with a low per-unit list price on formularies or give preferential treatment to those with a high list price.
• It will offer access to Trump Rx’s direct-to-consumer platform as part of its standard offerings. Costs will count toward Express Scripts members’ deductibles.
• It will establish a standard offering for plan sponsors where the out-of-pocket costs for patients are based on the net cost of a drug, rather than the list price.
• It will provide full access to its Patient Assurance Program to all individuals if insulin is on a formulary unless the plan sponsor chooses to opt out.
• It will offer a standard benefit design that allows plan sponsors to transfer off of rebates or spread pricing, and delinking drug manufacturers’ payouts from list prices in standard benefits.
• It will ensure employers do not pay higher than a drug’s net cost.
• It will pay pharmacies the cost of drugs plus a dispensing fee.
• It will reshore its group purchasing organization, Ascent, from Switzerland to the United States.
• It will increase transparency, including reporting more data on drug spending and disclosing any kickbacks to brokers that help employers choose PBMs.
• It will expand access to its patient assistance program’s insulin benefits.

The FTC expects the settlement to lower out-of-pocket costs for drugs by $7 billion over a decade.

Additional articles: https://www.fiercehealthcare.com/regulatory/ftc-evernorth-near-settlement-case-over-insulin-prices and https://www.healthcaredive.com/news/express-scripts-ftc-reach-settlement-insulin-lawsuit/811369/ and https://www.beckerspayer.com/legal/ftc-deal-over-insulin-prices-forces-cignas-express-scripts-to-overhaul-policies/

(Some articles may require a subscription.)

#pbms #drugpricing #employers

https://www.modernhealthcare.com/insurance/mh-cigna-express-scripts-ftc-pbm-lawsuit

Partial Shutdown Over

The House voted 217-214 to approve a final spending package for FFY 2026 — 21 Republicans defected from and 21 Democrats supported the bipartisan measure. President Trump has already signed the bill. A number of key healthcare reforms are included. I reported on a list of them in the Newsfeed on January 30.

Among the big items are a set of pharmacy benefit manager (PBM) reforms, including extensive reporting, transparency, and government oversight as well as requirements to pass rebates earned from drug makers to health plans, employers, and patients. PBMs will now have to charge a set fee for services.

The bill requires the groups to report detailed data on drug pricing, rebates, pharmacy reimbursement, and payments retained by PBMs and their affiliates and authorizes audits and enforcement/recoupment actions.

In addition, telehealth was extended for two years and acute hospital-at-home by five years.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-congress-government-funding-bill-pbm-telehealth/ and https://www.beckershospitalreview.com/hospital-management-administration/government-reopens-after-partial-shutdown-5-notes/ and https://thehill.com/homenews/house/5721189-democrats-republicans-end-shutdown/?tbref=hp

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#governmentshutdown #congress #trump #healthcare #coverage #medicare #pbms #drugpricing

https://www.fiercehealthcare.com/providers/partial-government-shutdown-looms-threatening-stall-health-funding-package-telehealth

Government Funding Bill Still Not Passed; Due Up Tuesday in House

With Democrats off the Senate funding package to end a partial government shutdown, Speaker Mike Johnson, R-LA, is still expressing optimism about the House approving a funding package Tuesday. The Rules Committee is now meeting to pass a rule, which then clears the way to have a party-line vote on the Senate package. But with the ability to lose but one vote given a slim majority, Johnson’s optimism may be a bit too, well, optimistic. However, Johnson says he is not asking President Donald Trump to call those Republican holdouts to get the deal over the finish line.

This package and an earlier one funds all but the Homeland Security department through September 30. That is funded for two weeks, giving time for Democrats and Republicans to discuss concerns over ICE and Homeland Security conduct.

Additional article: https://thehill.com/homenews/house/5719277-johnson-trump-gop-holdouts-funding/?tbref=hp

#governmentshutdown #congress #trump

https://thehill.com/homenews/house/5718734-what-to-know-about-the-partial-government-shutdown/?tbref=hp

Partial Government Shutdown Will Occur Despite Deal But Could Have Limited Impact — Hopefully!

The Senate passed a compromise provision to fund the government for all agencies yet to be funded and two weeks for the Department of Homeland Security. That will give time for parties to negotiate over some constraints on immigration officers. The Senate passed legislation Friday on a strong bipartisan vote.

The government technically shuts down at midnight tonight, but the House will be back on Monday to vote on the amended package. House Speaker Mike Johnson, R-LA, wants to suspend the rules to take up the bill to get funding moving quickly Monday. That requires a two-thirds vote, requiring about 70 Democrats to sign on in support. In part, Johnson wants to do this because he could have defectors among conservatives and he is challenging Democrats politically to oppose the measure. If he cannot suspned the rules, he would need to pass a rule through the Rules Committee and seek to pass the bill on a party-line vote. That could be tough in the committee and he has just a one vote cushion now in the vote count in the full House.

If all goes well, the mini-shutdown this weekend will end quickly. But that is by no means assured. Too few Democrats could fail to support the procedual vote and the measure. They are far more progressive in orientation than Senate Democrats. And conservatives could fail to support the bill as well.

Healthcare provisions in the legislation include:

• Enacting some pharmacy benefits manager (PBM reforms).
• Extending Medicare’s telehealth rules for two years and hospital-at-home rules for five years.
• Funding $4.6 billion for community health centers.
• Delaying Medicaid disproportionate share hospital payment reductions until 2029.
• Extending add-on payments for low-volume and Medicare-dependent hospitals, Medicare geographic payment adjustments for doctors, and ambulance payments through the end of the year.
• Restoring a 3.1% bonus for physicians participating in Medicare alternative payment models.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-senate-funding-bill-telehealth-pbms/ and https://thehill.com/homenews/house/5715812-mike-johnson-fast-track-funding-shutdown/

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#governmentshutdown #trump #democrats #healthcare

https://thehill.com/homenews/senate/5715914-senate-government-funding-package

Exchange Enrollment Down

About 23M have enrolled in Exchange coverage as open enrollment has all but closed out. That’s down about 5% from 2025 but more than the 21.3M in 2024. Interestingly, the reduction is not what many thought it would be after the expiration of the enhanced premium subsidies.

About 3.4 million are new enrollees, while 19.6 million are returning. About 15.8 million people enrolled on the federal Healthcare.gov platform, while 7.2 million enrolled on the state-based Exchanges.

Some states that stepped in with subsidies of their own saw strong growth, as did others who did not – such as Texas. Nine states had enrollment growth, while 41 saw declines.

For the 30 HealthCare.gov states, the data is through Jan. 15. For the 20 state-based exchanges plus D.C., the data is through Jan. 10. There are a few states that extended open enrollment and thus the enrollment numbers could rise. The big unknown is will rolls fall as people are required to make payments and do not do so after a grace period. Thus, 2026 could see more disenrollments.

In other news, talks to extend the enhanced subsidies in some form have ended and the GOP is preparing a last best offer to the bipartisan group. Discussions revolved around a possible two-year extension of the subsidies with subsidy income limits, minimum premiums, and expanded use of health savings accounts (HSAs).

Additional articles: https://www.healthcaredive.com/news/affordable-care-act-enrollment-2026-cms-snapshot-23-million/810790/ and https://www.beckerspayer.com/payer/aca/gop-senators-prep-best-and-final-offer-on-aca-subsidy-extension/ and https://thehill.com/policy/healthcare/5712648-obamacare-enrollment-drops-subisides-expiration/?tbref=hp and https://www.kff.org/quick-take/aca-signups-are-down-but-still-an-incomplete-picture/ and https://www.beckerspayer.com/payer/aca/aca-enrollment-falls-to-23-million-for-2026/

#healthcare #coverage #exchanges

https://www.fiercehealthcare.com/regulatory/about-23m-have-signed-aca-coverage-so-far-cms

Elevance Reports Caution, But Better News Than United

Elevance Health reported 2025 financial news today and its status is better than imploding UnitedHealth Group. That led to a recovery to some degree in its stock price today.

Elevance beat The Street on profit in Q4 2025 but missed on revenue. The company reported $547 million in profit for Q4, up from $418 million in Q4 2024. However, its $49.3 billion in Q4 revenue fell short. It did have almost 10% growth year over year.

For the full year, Elevance Health brought in $197.6 billion in revenue, up 12.8% from 2024’s $175.2 billion. Profits were down by 5.3% compared to 2024, decreasing from $6 billion to $5.7 billion.

Elevance did report that it will see declining revenue in 2026, though. And profit could be constrained as well. This is tied to shedding of membership to right the financial ship as well as governmental impacts in Medicaid and the Exchanges. The insurer also had elevated utilization and medical costs, with a medical loss ratio of 93.5% in Q4.

Its small but growing Carelon services unit had a good year, with operating revenues of $18.7 billion in Q4 2025, up 27% year over year.

Elevance expects to make a return to 12% growth in earnings per share in 2027.

Elevance expects its Medicare Advantage (MA) membership to drop about 18% or about 400,000. Medicaid rolls will drop as well. Medicaid enrollees are also expected to be more adverse.

Additional articles: https://www.fiercehealthcare.com/payers/elevance-health-beats-profit-misses-revenue-mixed-q4 and https://www.healthcaredive.com/news/elevance-2025-results-2026-outlook-lower/810680/ and https://www.beckerspayer.com/financial/elevance-posts-5-7b-profit-in-2025/

(Some articles may require a subscription.)

#healthplans #margins #elevancehealth #medicareadvantage #medicaid

https://www.modernhealthcare.com/insurance/mh-mied-elevance-health-quarter-bolstered-carelon

CMS Defends Flat Rates But Contraction Coming; UnitedHealth Crashes

The Trump administration’s top Medicare official is defending the meager proposed Medicare Advantage (MA) increase for 2027, saying the administration is a big supporter of MA. Large plans stocks dropped dramatically today after the after-hours’ announcement yesterday.

Analysts, trade groups, and plans are saying that yet another major contraction could occur in 2027. Benefits, products, and geographies began contracting in 2024, with major changes in 2025 and 2026.

While the economic growth rate was generous, the administration proposed two risk adjustment changes that will take nearly all of the 5% trend away. Some expect a contraction of enrollment from the 2026 enrollment season when statistics come out soon. I have doubted this, but it very well could happen.

Trump officials justify the risk adjustment changes and flat hike as an effort to combat overpayments in the program.

In other news, UnitedHealth Group’s stock crashed today dropping about 20% in light of poor financials and the impact of the MA announcement. Humana saw it stock drop by about that percentage as well, with other majors falling as well.

At its Q4 2024 financial call, UnitedHealth Group said it expects to lose between 1.3 million and 1.4 million MA members in 2026 across group, individual and dual special needs plans. UnitedHealth also expects to see some membership losses in Medicaid – a decline of between 565,000 and 715,000 people, including D-SNP enrollees. Commercial coverage could drop 550K to 850K. For full-year 2025, profits were $12.1 billion, down from $14.4 billion in 2024. Full-year 2025 revenues were $447.6 billion, up from the $400.3 billion reported in 2024. The medical loss ratio was 92.4% in Q4 2025 and 89.1 for the full year.

In shocking news, UnitedHealth is forecasting a decline in 2026 revenue, the first annual contraction in more than three decades. In a stunning reversal as well, Optum Health lost $278 million from operations in 2025, a major decline from the $7.8 billion in gains reported in 2024. Revenue fell less than 1% to $25.5 billion.

How the mighty has fallen.

Additional articles: https://www.fiercehealthcare.com/payers/unitedhealth-shares-fall-premarket-company-misses-revenue-releases-2026-outlook and https://www.modernhealthcare.com/insurance/mh-unitedhealth-group-earnings-optum-health/ and https://www.modernhealthcare.com/insurance/mh-unitedhealth-earnings-q4-2025/ and https://www.healthcaredive.com/news/medicare-director-defends-ma-2027-advance-notice/810635/ and https://www.healthcaredive.com/news/cms-proposed-2027-advance-notice-chart-reviews-medicare-advantage/810549/ and https://www.healthcaredive.com/news/unitedhealth-unh-q4-2025-medicare-advantage-troubles/810570/ and https://www.beckerspayer.com/financial/unitedhealthcare-projects-up-to-2-8-million-membership-decline-in-2026/ and https://www.beckerspayer.com/financial/unitedhealths-2025-profit-dips-to-12-1b/

(Some articles may require a subscription.)

#medicareadvantage #healthplans #cms #rates #unitedhealthcare

https://www.fiercehealthcare.com/regulatory/cms-proposes-flat-ma-rates-risk-adjustment-updates-2027

MA Hit Hard By Proposed 2027 Rate Hike

The Trump administration threw Medicare Advantage (MA) for a loop tonight as it issued the 2027 Advance Notice of rates and set a meager projected hike. MA plans just weathered a three-year phase-in (2024 to 2026) of the new v28 model. By my calculation, that took about 7% out of rates. With skyrocketing utilization, plans had hoped for a 2027 hike that exceeded the rough 5% hike in 2026.

But Trump’s Center for Medicare and Medicaid Services (CMS) has now proposed two new risk adjustment reforms that take the almost 5% economic growth inflationary hike down dramatically – almost to 0. This will send stocks of major insurers dropping tomorrow for sure.

The draft calls for a 0.09% payment increase. That is an increase of roughly $700 million in MA payments for 2027 compared with $25 billion in 2026! When considering estimated risk score trends in MA driven by coding practices and population changes, the expected average change in payments will be 2.54%. But that is something plans reject as risk score trends at least in part recognize risk changes in the program from year to year.

What did CMS do?

Item 1: Additional changes to v28 model

— Use 2023 diagnoses to predict 2024 expenditures instead of 2018 diagnoses predicting 2019 expenditures.
— Use payment year 2024 vs. payment year 2020 for average per capita predicted expenditures to create relative factors in the model.

These changes essentially update years in the model to address emerging differences between MA and Original Medicare coding.

Overall, this first item reduces the rate hike by 3.32% with the normalization factor included (1.82% without normalization.)

Item 2: Eligible submissions

— Exclude diagnoses from audio-only services to align with MA diagnosis submission policy.
— Exclude diagnoses that appear in chart reviews but are not supported by corresponding medical encounters from how it calculates risk scores. CMS says MA plans received about $7.5 billion in 2023 for diagnoses that appeared only in risk assessments and related chart reviews but not on a medical encounter.

This second change reduces the rate hike by 1.53%. The agency said plans that rely more heavily on unlinked chart reviews to report risk-adjustment eligible diagnoses will see a greater payment impact. This would be the largest plans out there.

This will be very disappointing to MA plans, but what is likely to happen? As more FFS claims come in, we should see the economic growth rate increase. Last year, it increased by almost 3% between the advance and final. This is dependent on included timeframes, but utilization remains high so something should happen again. The administration could offer some relief from the risk adjustment proposals, including abandoning some or phasing them in. But I would not count on this last point.

I will cover much more on the rate hike and Star changes in a blog later this week.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-advantage-pay-2027-proposal/ and https://www.beckershospitalreview.com/finance/cms-proposes-nearly-flat-medicare-advantage-payments-for-2027-5-notes/ and https://www.cms.gov/newsroom/fact-sheets/2027-medicare-advantage-part-d-advance-notice and https://www.cms.gov/newsroom/press-releases/cms-proposes-2027-medicare-advantage-part-d-payment-policies-improve-payment-accuracy-sustainability

(Some articles may require a subscription.)

#medicareadvantage #cms #rates #overpayments #riskadjustment

https://www.fiercehealthcare.com/regulatory/cms-proposes-flat-ma-rates-risk-adjustment-updates-2027

CareFirst Sues on Star Ratings

The now annual tradition of a Medicare Advantage (MA) plan suing over Star ratings continues. CareFirst BlueCross BlueShield is suing the Centers for Medicare and Medicaid Services (CMS) over its 2026 Star Ratings, alleging improper calculations cost the insurer an estimated $32 million in quality bonus payments.

The plan says CMS departed from its own guidance when it used corrected patient safety data released after the close of the plan preview period to calculate Star Ratings. CareFirst says it received a 3.5-star rating instead of 4 Stars for a contract with about 30,000 enrollees.

CareFirst says its Drug Plan Quality Improvement Measure for the contract was impacted by CMS contractor Acumen updating data after the close of the Plan Preview period. CMS has a hard rule that issues must be raised by plans before or during Plan Preview 1 and CareFirst says that CMS should have to follow the same rules. CMS declined to review the ratings when CareFirst raised the issue.

With some limited exceptions, especially the challenge to guard rail calculations, CMS has won more suits than not. But CareFirst raises a reasonable issue about process and holding the agency to the same rules as plans.

#medicareadvantage #stars #quality #cms

https://www.beckerspayer.com/legal/carefirst-bcbs-sues-over-2026-medicare-advantage-star-ratings/

Health Plan CEOs Grilled On Affordability

It was a bipartisan bashing of health plan CEOs on Capitol Hill today as both parties sought to protect themselves from healthcare affordability fallout. While the GOP was more sympathetic to the plan executives, they engaged in a great deal of attacks as well. The issues covered included the following:

• Plan executives tried to promote many of the reforms they have made, including in prior authorization. For the most part, it seemed not enough for lawmakers.
• Plan executives argued correctly that the real problem is not plans but drug and hospital prices in America. Lawmakers paid little attention here and sought to turn it back on some of the nefarious practices of the Uber healthcare organizations in front of them.
• Four of five CEOs agreed the healthcare system is broken when asked. Blue Shield CEO Markovich indicated that the hearings highlighted the need for “systemic” change.
• Lawmakers on both sides of the aisle attacked the plans over vertical integration and the hidden costs it drives. Executives tried to defend on the issue by arguing the benefits. This fell flat. Consolidation and mergers were also featured as driving costs. Lawmakers argued hospital consolidation and private equity investors are inflating costs and premiums.
• There was major criticism of MA from both sides of the aisle, including on growing overpayments from risk adjustment abuse.
• The No Surprises Act was featured as in need of reform, with plan executives saying providers have high-jacked the dispute resolution, while lawmakers also attacked plans for their behavior in the program.
• Lawmakers had major criticisms of the pharmacy benefits managers (PBMs) most of the executives own and how business is conducted. Plans argued the benefits of PBMs as well as recent promotion of biosimilars.
• Rep. Greg Murphy, R-NC and a doctor, laid out the plans’ litany of sins, including ruining Medicare Advantage (MA), overly consolidating, mistreating providers, overpaying executives, manipulating the No Surprises Act, and abusing prior authorizations (PA). Murphy is fighting a brain tumor and just had brain surgery.
• The CEOs declined… to embrace Trump’s health plan as the answer to affordability.
• Democrats and Republicans battled over policy differences and the lack of extension of enhanced Exchange premium subsidies.

In other news, the House passed its final four appropriations bills and they now go to the Senate. This needs to happen soon to avoid a partial shutdown.

Further, lawmakers accused CVS Health of violating antitrust laws by restricting independent pharmacies from working with digital pharmacy competitors to protect its market position.

Last, Cigna said its plan to end drug rebates will reduce earnings by $500 million to $600 million.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-health-insurance-ceo-hearings-live-updates/ and https://www.bloomberg.com/news/articles/2026-01-21/cvs-health-may-have-violated-antitrust-laws-republican-lawmakers-say and https://www.fiercehealthcare.com/payers/insurance-ceos-set-back-back-congressional-hearings-affordability and https://www.beckerspayer.com/payer/house-committee-accuses-cvs-of-impeding-pharmacy-competition/ and https://www.modernhealthcare.com/insurance/mh-cigna-earnings-drug-rebates/ and https://www.beckerspayer.com/payer/vertical-integration-is-destroying-peoples-ability-to-access-care-payer-ceos-face-bipartisan-congressional-grilling/ and https://www.beckerspayer.com/payer/cvs-health-cuts-prior-authorizations-expands-rebate-sharing/ and https://thehill.com/homenews/house/5701980-house-government-funding-bills/ and https://www.healthcaredive.com/news/house-budget-committee-healthcare-affordability-consolidation/810149/

(Some articles may require a subscription.)

#healthcare #healthplans #healthcarereform #affordability

https://thehill.com/policy/healthcare/5701982-health-care-costs-insurance-ceos-testimony