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May 1, 2024

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Stunning Admission By United HealthGroup CEO

It was the roasting that was expected, with both sides of the aisle attacking Andrew Witty when he appeared on Capitol Hill.  The United HealthGroup CEO made a stunning admission when he said that Change Healthcare had legacy architecture and technology based largely on internal data centers. It says it is rebuulding all of it on a cloud-based, modern infrastructure. This alone substantiates a lack of business continuity and disaster recovery readiness. In the last few days, United also admitted that simple multi-factor authentication was not in place and that is how the cyber criminals got into the Change platforms.

The testimony adds to my theory that when massive consolidation occurs, technology is not modernized and as I call it “spaghetti-ed together.”  The testimony will lead to additional scrutiny of United, a review of vertical integration and consolidation in healthcare, as well as more lawsuits and eventual fines for United.

See my blog and podcast on the Change debacle: https://www.healthcarelabyrinth.com/17-what-happened-when-change-healthcare-suffered-a-major-cyberattack-and-what-will-it-mean-to-the-broader-healthcare-system-moving-forward/ and https://www.healthcarelabyrinth.com/the-change-healthcare-cyberattack-what-it-is-and-its-implications/

Additional articles: https://www.fiercehealthcare.com/payers/too-big-fail-consolidation-concerns-loom-over-hearing-change-healthcare-cyberattack and https://www.modernhealthcare.com/politics-policy/unitedhealth-andrew-witty-change-healthcare-hearings and https://www.medpagetoday.com/washington-watch/washington-watch/109918 and https://www.beckershospitalreview.com/finance/a-crisis-of-your-creating-unitedhealth-ceo-grilled-by-congress-on-cyberattack.html

(Some articles may require a subscription.)

#changehealthcare #cyberattacks #unitedhealthcare

https://thehill.com/homenews/4635480-unitedhealth-ceo-heat-cyberattack-senate/

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April 30, 2024

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A Peak At United HealthGroup CEO’s Planned Testimony

The United HealthGroup CEO plans on giving detailed testimony this week on Capitol Hill.  His testimony outlines how the cyberattackers got in, which may point to a security flaw in Change Healthcare’s system. United has funneled $6.5 billion to providers impacted so far.

Additional article here: https://www.modernhealthcare.com/politics-policy/unitedhealth-andrew-witty-congress-change-healthcare-outage

(Some articles may require a subscription.)

#changehealthcare #cyberattacks

https://www.fiercehealthcare.com/payers/unitedhealth-ceo-witty-set-go-congress-week-heres-look-his-testimony

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April 29, 2024

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New Study Recommends Health-Related Tiering For Access To GLP-1s

A new study recommends a tiering of GLP-1 medication access based on health status. The problem is the price of the drugs are exorbitant compared with other developed countries. And wide access to the drugs is often only available in richer health plans. As such, the reasonable proposal is destined for the ash heap for now.

#weightlossdrugs #branddrugmakers #drugpricing

https://www.fiercehealthcare.com/regulatory/heres-what-fair-allocation-glp-1s-and-other-weight-loss-drugs-could-look

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April 26, 2024

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FTC Approves Rule Extending Data Privacy To Digital Apps

On a 3-2 vote, the Federal Trade Commission (FTC) finalized a rule that extends the scope of its breach notification rule to include personal health information collected by health apps and other technology that are outside the Health Insurance Portability and Accountability Act.  It is a very controversial move and may be beyond the FTC’s authority.

Additional article: https://insidehealthpolicy.com/daily-news/ftc-issues-controversial-breach-notification-rule-despite-two-commissioners-dissent

#cybersecurity #breaches

https://www.fiercehealthcare.com/health-tech/ftc-finalizes-changes-data-privacy-rule-step-scrutiny-digital-health-apps

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April 25, 2024

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Cigna Arm To Offer Humira Biosimilar At $0 Cost-Share

Finally, we are making some advances on biosimilar adoption.  For awhile, pharmacy benefits managers (PBMs) were teaming up with brand drug makers to stop the uptake of biosimilars through rebate arrangements.  That still happens, but PBMs are seeing the light. Evernorth’s Accredo Specialty Pharmacy will make a Humira biosimilar available to patients with no cost-share. Evernorth is partnering to produce the biosimilar. The biosimilar price is about 85% lower than that of the brand.

#biosimilars #drugpricing #brandrugmakers #cigna #evernorth

https://www.fiercehealthcare.com/payers/evernorths-accredo-offer-humira-biosimilar-0-out-pocket

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April 24, 2024

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Humana Bounced Back But Has Challenges

Humana’s Q1 2024 investor call was better than its Q4 one.  It reported better results, including a slightly improved medical loss ratio for its large Medicare Advantage (MA) business. Costs seem to be coming down but the delay in claims due to the cyberattack could cause a re-evaluation. Humana projects flat margins in 2024 and long-term margins to decline to a floor of 3%, which is noticeably down. It will cut $700 million in response in 2024. It pulled its 2025 projections for now.

It continued to note that the 2025 rate hike will mean reductions in benefits and retreating in some geographies. 

Additional article: https://www.modernhealthcare.com/finance/humana-medicare-advantage-profit-2024 and https://www.healthcaredive.com/news/humana-withdraws-2025-earnings-outlook-q1-2024/714105/ and https://www.beckerspayer.com/payer/humana-reported-741-million-in-net-income-in-the-first-quarter-of-2024.html and https://www.beckerspayer.com/payer/humana-plans-to-leave-some-medicare-advantage-markets-in-2025.html

(Some articles may require a subscription.)

#humana #medicareadvantage

https://www.fiercehealthcare.com/payers/humana-confirms-2024-guidance-even-it-beats-street-q1

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April 23, 2024

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FTC Votes To Ban Most Non-Competes

The Federal Trade Commission (FTC) bans most non-competes.  The final rule would ban such agreements for anyone that is not both a senior executive (in a “policy-making position”) and earning more than $151,164 annually.  These positions represent less than 0.75% of the workforce. The FTC does not have cognizance over non-profits. 

The rule is expected to be challenged in court, but seems to be a reasonable proposal.  Non-competes are used extensively in healthcare, even for doctors who do not meet the policy-making provision. This impacts up to 40% of doctors.

A non-compete would remain for senior positions, which does not seem unreasonable. Surprisingly, provider lobbies are against a ban, largely because they are now influenced by private equity owners, who seek to freeze out doctors from taking other jobs. Many entities promise to sue.

Additional articles: https://www.fiercehealthcare.com/regulatory/ftc-votes-3-2-issue-final-rule-banning-noncompetes and https://www.modernhealthcare.com/providers/ftc-noncompete-ban-agreement-lina-khan and https://www.healthcaredive.com/news/ftc-noncompete-ban-healthcare-doctor-effects/713846/

(Some articles may require a subscription.)

#ftc #noncompetes #healthcare

https://thehill.com/business/4615452-ftc-votes-to-ban-non-compete-agreements/

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April 22, 2024

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United Did Pay Ransom In Cyberattack

United HealthGroup confirmed that personal health information (PHI) and personally identifiable information (PII) was exposed in the attack and “could cover a substantial proportion of people in America.” It also confirmed a ransom was paid. It will take awhile to get to what was exposed and who was impacted. Experts have data which points to the payment of a $22 million ransom by United.  United confirms that while some systems are functioning near normal, others are not yet up and will be restored over time.

In additional news, the United CEO will appear before a House subcommittee on May 1: https://www.reuters.com/business/healthcare-pharmaceuticals/unitedhealth-ceo-testify-before-us-house-panel-cyberattack-tech-unit-2024-04-19/ .

Additional article: https://www.modernhealthcare.com/cybersecurity/change-healthcare-update-unitedhealth-ransom

(Some articles may require a subscription.)

#united #changehealthcare #cyberattacks

https://www.fiercehealthcare.com/payers/unitedhealth-offers-update-cyberattack-data-analysis-systems-restoration

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April 19, 2024

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Optum Appears To Be Laying Off Employees Over Cyberattack

Given the fallout from the Change Healthcare cyberattack, Optum appears to be laying off hundreds if not thousands of employees.  United HealthGroup has not commented on the matter at this point. I have heard that some of the laid off employees are even within the Change Healthcare unit, which could be impacting the return to normal business operations for some plans and providers. If this is true, that is outrageous.

#changehealthcare #optum #cyberattacks

https://www.fiercehealthcare.com/payers/optum-undergoes-mass-layoffs-scale-unclear

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April 18, 2024

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Elevance Health Reports Positive Q1 News

Elevance Health reported overall good numbers for Q1 2024.  While membership has dropped in Medicare Advantage (MA) and Medicaid, margins were up and it reported little fallout on the Medicare medical expense or Change cyberattack front. Due to the MA rate cut, Elevance will balance business expansion with margin. On the call, the CEO also discussed the need to excel at Star measurement in MA.  It also continues to build its Carelon services unit.

Additional articles: https://www.fiercehealthcare.com/payers/elevance-health-sees-double-digit-profit-growth-q1-posting-22b-earnings and https://www.modernhealthcare.com/insurance/elevance-health-medicaid-medicare-advantage-earnings

(Some articles may require a subscription.)

#elevancehealth #medicareadvantage

https://www.healthcaredive.com/news/elevance-health-earnings-q1-change-cyberattack-medicaid-medicare-advantage/713521

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