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Trump Spending Freeze Order Creates Chaos

A federal judge has stayed a decision by President Trump’s Office of Management and Budget (OMB) to essentially freeze billions in federal grants and disbursements. It capped a whirlwind day of confusion and vitriol.

Democrats cried that the executive branch was usurping congressional authority and the lawmakers and a coalition of non-profit groups won the stay until early next week. The administration argued it had the duty to look at outlays after years of runaway spending. Objectively, what happened appeared to be the first major misstep of the administration. Whatever one’s views on the action, it was clearly not well telegraphed or rolled out. The White House had to refine what was indeed stalled at several points today, finally landing on the fact that direct aid to individuals, such as welfare, Medicaid, and Medicare, was not being impacted. But other healthcare grants that do benefit Americans would undoubtedly have been impacted.

The battle will be just one in many coming up. The OMB said that outlays would resume after they determine whether spending aligns with Trump’s executive orders. The White House may also seek to use impoundment, which is very likely illegal. There, too, will be the major spending reductions expected in a budget reconciliation bill.

Additional articles: https://www.fiercehealthcare.com/regulatory/trump-admin-orders-temporary-pause-most-federal-financial-assistance and https://www.modernhealthcare.com/politics-policy/trump-pause-federal-grants-temporarily-blocked-judge and https://www.healthcaredive.com/news/trump-freezes-federal-grants-healthcare-medicaid-providers/738449/ and https://insidehealthpolicy.com/daily-news/advocates-worried-trump-pause-grant-funding-impacts-medicaid-chip and https://www.modernhealthcare.com/politics-policy/trump-pauses-federal-grants-loans-funding and https://www.modernhealthcare.com/politics-policy/federal-funding-freeze-grants-medicaid and https://www.modernhealthcare.com/politics-policy/trump-pause-federal-grants-freeze-white-house

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#trump #healthcare #spending #congress #impoundment #budgetreconciliation #medicare #medicaid

https://thehill.com/regulation/court-battles/5111837-trump-federal-aid-freeze-blocked

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KFF Finds Major Claims Denials In Exchanges

The Kaiser Family Foundation (KFF) finds in a new study that health insurers selling Marketplace plans in states that use the federal Exchange rejected 19% of in-network claims on average in 2023. That is up from 16% in 2022. The rate has been steady over time, ranging from a 14% low in 2018 to a 19% high in 2015 and 2023. Insurers denied 37% of out-of-network claims in 2023.

There is a huge range in denial rates among plans, from 1% to 54%. For high volume insurers, the range was 13% to 35%.

“Other reasons” represented the largest category of denials (34%), with 16% tagged as excluded services, 9% as lack of prior authorization or referral, and 6% as lack of medical necessity. Other common reasons for denials included administrative issues (18%) and exceeding benefit limits (12%).

While I think health plans do need to reform some aspects of claims scrutiny, the reality is that health plans have a duty to review claims and that in many cases denials are the fault of providers for not obtaining necessary approvals or submitting required documentation. KFF’s study does not cover the health plan side of things very well.

KFF press release and analysis: https://www.kff.org/affordable-care-act/press-release/healthcare-gov-insurers-denied-nearly-1-in-5-in-network-claims-in-2023-but-information-about-reasons-is-limited-in-public-data/ and https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans-in-2023/

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#claimsdenials #healthplans #providers #exchanges #aca #obamacare

https://www.modernhealthcare.com/insurance/unitedhealth-hcsc-exchange-claims-denials-kff

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Change Healthcare Updates Number Of Those Impacted By Cyberattack

The Change Healthcare cyberattack brought much of healthcare to a halt in 2024 for many months. UnitedHealth Group, Change’s parent, earlier said that 100 million people were impacted. It now has updated that number to 190 million or about 57% of the nation’s population.

The cyberattack posed a significant financial cost to UnitedHealth Group, with the company projecting that it would take a $2.9 billion hit. More important, it had huge costs for providers, health plans, pharmacies, and other healthcare entities. All of these entities relied on Change’s vast service and processing systems.

The attackers used stolen credentials and breached a server that did not have two-factor authentication – a rookie mistake in security. The attackers were paid a ransom yet still took information from the servers.

United says it is not aware of a misuse of data, but that is little solace or relief for those impacted. How can you trust the healthcare monolith after it lied and failed to inform throughout the crisis. United was clearly negligent when it came to security, its lack of preparedness for such an event, and its failure to modernize infrastructure and technology. It will see far greater costs than it anticipates. Providers, health plans, and pharmacies should sue for the billions in costs due to the event.

In many ways, this is a lesson in the arrogance of big health plans and why vertical integration has gone too far. Profit and margins were more important than good governance of healthcare data.

#changehealthcare #unitedhealthcare #cyberattacks

https://www.fiercehealthcare.com/payers/unitedhealth-estimates-190m-people-impacted-change-healthcare-cyberattack

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Elevance Health Reports Q4 and 2024 Financial News

After some rocky news from UnitedHealth Group earlier, Elevance Health reported some mixed financial news as well. Elevance said it would grow 7% to 9% in Medicare Advantage (MA). The company did say it is attacking growth prudently given rate concerns and utilization trends. Elevance also says that while MA rates are moving in the right direction, rates for 2026 will be inadequate based on the Advance Notice recently released.

But like United, year-over-year margins decreased even though Elevance beat Wall Street. Its services unit, Carelon, showed robust revenue growth.

On Medicaid, Elevance said Medicaid rate pressures could ease in 2H 2025 and that it is encouraged by some rate hikes it is seeing from states.

As has been seen with other insurers, Elevance’s all lines of business medical loss ratio (MLR) rose considerably to 92.4% in the fourth quarter, up from 89.5% in the third quarter and from 89.2% in the fourth quarter of 2023.

Additional articles: https://www.modernhealthcare.com/insurance/elevance-health-medicaid-costs-2025 and https://www.healthcaredive.com/news/elevance-2024-results-medicaid-medicare-advantage/738024/ and https://www.beckerspayer.com/payer/2026-medicare-advantage-rates-inadequate-elevance-execs-say.html and https://www.healthcarefinancenews.com/news/elevance-pulls-418-million-q4-profit

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#elevancehealth #healthplans #mlrs #margins #medicareadvantage #medicaid #managedcare

https://www.fiercehealthcare.com/payers/elevance-health-reports-418m-profit-q4

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CMS Appealing UnitedHealthcare’s 2025 Stars Win

In very odd timing, the Centers for Medicare and Medicaid Services (CMS) has said it will appeal a federal judge’s order to recalculate UnitedHealthcare’s Medicare Advantage (MA) Star ratings. CMS did not state the grounds for its appeal. 

Coming out of a federal judge’s decision siding with United in its suit, CMS did revise UnitedHealthcare’s and Centene’s star rating scores for 2025. UnitedHealthcare received higher ratings in 12 contracts and Centene in seven contracts. Centene’s suit closely mirrored United’s.

Additional article: https://www.modernhealthcare.com/legal/cms-unitedhealth-medicare-advantage-star-ratings-appeal

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#cms #stars #medicareadvantage

https://www.fiercehealthcare.com/payers/cms-will-appeal-unitedhealthcares-ma-star-ratings-court-win

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Some Trump Executive Orders Impact Healthcare

As expected, re-minted President Donald Trump issued sweeping executive orders on day one of Trump 47 impacting almost all aspects of government. By and large, healthcare was less impacted. But here are some highlights:

  • Trump instituted a regulatory freeze on all agencies. No proposed rules can be finalized or new ones proposed for 60 days. This impacts a number of healthcare regulations, including the 2026 Medicare Advantage (MA) and Part D rule.
  • A Biden executive order creating three drug pricing models was rescinded. This was meant to reduce spending and consumer outlays under the Center for Medicare and Medicaid Innovation (CMMI). At the same time, the models would have further reduced flexibility of MA and standlone Part D (PDP) plans to craft plans.
  • A hiring freeze was instituted impacting most non-public safety or national security agencies.
  • The U.S. will pull out of the World Health Organization (WHO) over COVID failures as well as America’s costs compared to other nations. The U.S. is the biggest funder.
  • A Biden executive order that seeks to protect and expand coverage in Medicaid and the Affordable Care Act (ACA) was rescinded.
  • Biden’s executive order on artificial intelligence was rescinded, largely due to Trump’s different focus here and the belief that Biden had a heavy-handed approach.

In other news, the brand drug industry will ask Trump to pause the second round of Medicare drug price negotiations in part due to ongoing litigation. Proponents urge Trump to continue and argue there is no basis for any pause.

Last, advocates are asking Trump to avoid drastic Medicaid cuts and restructuring and targeting key moderates in the Senate in a public relations and advocacy campaign.

Additional articles: https://www.healthcaredive.com/news/trump-reverses-biden-healthcare-executive-orders-withdraws-world-health-organization/737838/ and https://www.modernhealthcare.com/politics-policy/trump-medicare-drug-price-negotiations and https://www.modernhealthcare.com/politics-policy/donald-trump-joe-biden-ai-executive-order-repeal and https://www.modernhealthcare.com/politics-policy/donald-trump-world-health-organization-us-exit-reconsider and https://thehill.com/policy/healthcare/5097280-trump-who-executive-order/ and https://www.fiercehealthcare.com/regulatory/trump-pulls-us-out-who-condemned-public-health-experts and https://thehill.com/policy/healthcare/5098715-trump-executive-order-biden-prescription-drug-costs/ and https://insidehealthpolicy.com/daily-news/advocates-defend-medicaid-appeal-trump-massive-ad-campaign and https://www.statnews.com/2025/01/20/trump-executive-orders-health-care-drug-pricing-aca-covid-gender-discrimination/

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#trump #healthcare #first100days #medicaid #medicare #drugpricing #aca #obamacare #regulations #ai #who

https://www.fiercehealthcare.com/regulatory/what-trumps-first-day-orders-mean-healthcare-ditched-drug-models-pauses-rules-and-hiring

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Biden Releases Next 15 Medicare Drugs To Be Negotiated

In a parting shot at the incoming Trump administration, outgoing President Biden’s administration issued the next list of 15 drugs subject to negotiations in Medicare. The list was due by February 1, so the early release is a challenge to the Trump administration not to repeal the negotiation law included in the Inflation Reduction Act (IRA). The prices on the 15 drugs would go into effect on January 1, 2027 after a process in 2025. In 2024, prices for the first 10 drugs were set and take effect on January 1, 2026.

The Centers for Medicare and Medicaid Servies (CMS) says that between November 2023 and October 2024 about 5.3 million people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma. The drugs accounted for about $41 billion in total gross covered prescription drug costs under Medicare Part D, or about 14%. If you combine these drugs with the 10 drugs with prices set in the first round, over a third of total gross covered prescription drug costs under Medicare Part D will already have been subject to negotiation. Part B medical drugs will be added to the program for price negotiations for 2028.

In a related note, the administration also proposed to make GLP-1 drugs available for weight loss in Medicare if beneficiaries have only obesity and no other disease state usually found when treating conditions with such drugs. Trump will have to decide whether he keeps the provision, which is extremely costly and could further destabilize the standalone Part D program (but also hurt Medicare Advantage).

The drugs for round 2 are:

  • Ozempic; Rybelsus; Wegovy 
  • Trelegy Ellipta 
  • Xtandi
  • Pomalyst
  • Ibrance
  • Ofev
  • Linzess
  • Calquence
  • Austedo; Austedo XR 
  • Breo Ellipta 
  • Tradjenta
  • Xifaxan
  • Vraylar
  • Janumet; Janumet XR 
  • Otezla

CMS Fact Sheet: https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower

Additional articles: https://www.modernhealthcare.com/politics-policy/ozempic-wegovy-medicare-price-negotiations and https://www.healthcaredive.com/news/medicare-drug-price-negotiations-second-round-semaglutide/737662/ and https://insidehealthpolicy.com/daily-news/biden-s-hhs-bids-farewell-list-15-drugs-including-glp-1s-next-negotiations and https://thehill.com/policy/healthcare/5091213-medicare-negotiation-drugs-list/ and https://thehill.com/policy/healthcare/5091255-cms-negotiation-ozempic-list/ and https://thehill.com/homenews/5090719-biden-administration-picks-15-more-drugs-for-medicare-negotiation/

(Some articles may require a subscription.)

#ira #drugpricing #medicare #partd #branddrugmakers #biden #trump

https://www.fiercehealthcare.com/payers/biden-names-cancer-diabetes-drugs-price-negotiation-program

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UnitedHealth Group Reports Lower Margins

While revenue was up for the year, UnitedHealth Group reported lower annual margins due to high medical expense. Its stock dropped on the news. United is the largest insurer and biggest integrated healthcare company in the nation. Its medical loss ratio (MLR) grew to 87.6% across its lines of business in Q4. Its earnings were still above estimates.

United CEO Andew Witty also said he would ease prior authorizations (PAs) and work with policymakers to overhaul processes. And faced with threats of major regulation of its pharmacy benefits manager (PBM), OptumRx, the CEO also committed to passing through to plans and employer groups 100% of drug manufacturer rebates. Many will be skeptical of the significance of this gesture given PBMs receive many forms of revenue and could easily find ways to maintain current levels of profit streams.

Additional articles: https://www.modernhealthcare.com/insurance/unitedhealth-andrew-witty-prior-authorization and https://www.modernhealthcare.com/insurance/unitedhealth-group-earnings-call-share-price-andrew-witty-medical-costs-revenue and https://www.healthcaredive.com/news/unitedhealth-unh-2024-record-revenue/737477/

(Some articles may require a subscription.)

#unitedhealthcare #healthplans #margins

https://www.fiercehealthcare.com/payers/unitedhealth-group-posts-144b-profit-4003b-revenue-2024

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Overall Record Enrollment in ACA Programs

As discussions are opening up in 2025 on whether enhanced premium subsidies are extended or not, the Kaiser Family Foundation (KFF) released a new analysis that said in 2024 Affordable Care Act (ACA) enrollment was 44 million. This includes federal and state Exchange Marketplaces, Medicaid expansions (ten states have not expanded), and the Basic Health Plan (in a small number of states). In 2024, Exchange Marketplace enrollment hit a record of 21.4 million people. Medicaid expansion enrollment was 21.3 million in 2024. Basic Health Plan enrollment in 2024 was 1.3 million.

Exchange enrollment in 2025 will hit at least 24 million, so those helped via the ACA will actually be about 47 million. These gains could be reduced over the next several years if the enhanced rebates expire at the end of 2025, if the Exchange benefits and subsidies are changed in other ways, and if the Medicaid expansion is rolled back or state matching funds are reduced.

KFF press release:https://www.kff.org/affordable-care-act/press-release/affordable-care-act-marketplace-and-medicaid-expansion-enrollment-reached-a-combined-44-million-in-2024/

#aca #medicaid #obamacare #exchanges #coverage

https://www.kff.org/affordable-care-act/issue-brief/a-look-at-aca-coverage-through-the-marketplaces-and-medicaid-expansion-ahead-of-potential-policy-changes/

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Outgoing Biden FTC Fires Another Shot At PBMs

CVS Caremark, Express Scripts and OptumRx – the Big 3 pharmacy benefits managers (PBMs) — dramatically mark up specialty generic drugs to affiliated pharmacies, according to a new report from the Federal Trade Commission (FTC). This is the second of two scathing reports.

The FTC analyzed 51 specialty generic drugs from 2017 to 2022 and found that the PBMs’ affiliated pharmacies acquired $7.3 billion in excess revenue when compared to the National Average Drug Acquisition Cost (NADAC), an estimate of what it costs a pharmacy to acquire a drug. Further, the report says the conclusion could be an underestimation.

PBMs generally defended themselves by saying that the report is misleading because it is based on a subset of drugs, that clients not PBMs choose networks, and they bring many savings to the system. But the report does show that PBM-affiliated pharmacy dispensing revenue increased at an annual growth rate of 42% from 2017 to 2021. Further, the top 10 specialty generic drugs generated more than $6.2 billion of dispensing revenue in excess of NADAC.

The report is sure to lead to further concerns on Capitol Hill regarding vertical integration of big healthcare and the non-arm’s length agreements that occur within the big integrated companies. The commission voted unanimously to release the report. The incoming chairman under Trump is on the commission today and voted for release. He supports ongoing investigation of PBMs.

The report also showed that the PBMs earned $1.4 billion from spread pricing, or when PBMs bill plan sponsors more than they reimburse pharmacies. Banning spread pricing could occur in 2025 on Capitol Hill. It almost passed in 2024.

Additional articles: https://www.modernhealthcare.com/politics-policy/cvs-caremark-express-scripts-optumrx-drug-markups-ftc-report and https://www.beckershospitalreview.com/pharmacy/ftc-finds-top-3-pbms-inflated-drug-prices-by-7-3b.html and https://www.healthcaredive.com/news/ftc-second-pharmacy-benefit-manager-report-caremark-express-scripts-unitedhealth/737249/ and https://thehill.com/homenews/administration/5083218-trump-greenland-denmark-ozempic-tariffs/?tbref=hp

(Some articles may require a subscription.)

#pbms #drugpricing #ftc #anitrust

https://www.fiercehealthcare.com/payers/ftc-big-3-pbms-generated-73b-specialty-generic-drug-markups

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