Health Plan Weekly
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News Briefs: Facing Lawsuit, Cigna Defends Claims-Review Algorithm
A lawsuit filed July 24 in a California district court accuses Cigna Healthcare of violating a state law requiring insurers to give each claim a “thorough, fair and objective investigation.” The proposed class-action suit filed on behalf of two Cigna enrollees claims that the insurer uses the system PxDx to deny claims in bulk rather than examine them individually. It cites a ProPublica article published in March that found Cigna doctors denied over 300,000 requests for payment using PxDx over a two-month period in 2022, spending an average of just 1.2 seconds reviewing each request. Cigna, however, hit back in a press release issued July 27 “in response to recent media representations.” The insurer says that PxDx is “a simple process that has successfully helped accelerate payments to physicians for common, relatively low-cost tests and treatments over the last several years,” adding that patients “are not denied care through this review in any way — it occurs after the patient has received treatment and once their physician bills for the treatment.” What’s more, the “vast majority” of claims reviewed through the PxDx process are automatically paid, the firm said, adding that CMS and other health insurers use a similar process.
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New Antitrust Regs Could Slow Health Care Deals, Limit Data Sharing
The Dept. of Justice (DOJ) and Federal Trade Commission (FTC) on July 19 released new draft guidance outlining its approach to antitrust enforcement after rescinding decades-old regulations the week before. The moves could further entrench and formalize the Biden administration’s aggressive anti-consolidation agenda. Health care insiders tell AIS Health, a division of MMIT, that the proposed guidance’s impact on health care insurers and providers is far from certain, but they say that the proposal could complicate any or all of data sharing, quality ratings, and value-based contracting — and stymie an active dealmaking environment.
The draft guidance, which is subject to a public comment period and may change, could have profound impacts on the broader economy, not just health care. The Biden administration’s antitrust regulators have evinced much more aggressive legal and economic theories of antitrust enforcement than any administration in decades. The new guidance is further evidence of the administration’s willingness to try and block deals such as acquisitions by health insurers of providers; provider mergers; and insurer deals for other non-insurance assets, such as business services and technology firms.
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Capital Blue Cross, Other Payers Are Looking to Lower Costs Related to Diabetes
Since implementing diabetes-related programs in 2021, Capital Blue Cross said it has saved its members and their employers nearly $6 million in health care costs. Meanwhile, Humana Inc. has launched a diabetes self-management education and support (DSMES) program through its CenterWell Home Health subsidiary that has seen an uptick in usage among health plans. The initiatives are part of a growing trend among payers that recognize the health burden and huge costs associated with diabetes.
Kelly Brennan, Capital Blue Cross’s senior director of Health Promotion and Wellness, tells AIS Health that the insurer’s beneficiaries with diabetes often have other chronic conditions, “which can be expensive to manage, both for our members and for business leaders who rely upon us to provide strategic solutions that curb health care spending and ensure their employees can be their healthiest.”
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UnitedHealth Sees Growth in MA, Behavioral Health Utilization, But EPS Guidance Remains Intact
UnitedHealth Group saw higher-than-expected utilization in the second quarter, driven by seniors and those seeking behavioral health care. However, the company kept its full-year adjusted earnings per share (EPS) guidance intact, indicating that it expects that it can offset the higher costs associated with increased utilization.
For the quarter, UnitedHealth had a medical loss ratio (MLR) of 83.2%, up from 81.5% in last year’s second quarter and from 82.2% in this year’s first quarter. That was due primarily to an increase in the number of members who sought care during the quarter, particularly in seniors who had delayed outpatient orthopedic and cardiac surgeries during the coronavirus pandemic.
John Rex, UnitedHealth’s Chief Financial Officer, told analysts during a July 14 conference call that the company filed its 2024 Medicare Advantage offerings with the assumption the elevated level of seniors seeking care will persist into next year.
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Positive Commercial Results Boost Elevance in Second Quarter
Elevance Health, Inc. reported positive second-quarter 2023 results, powered by solid commercial performance and promising returns from its Carelon health services division, which was launched last year.
The firm, which is the parent company of the Anthem and Wellpoint insurance brands, took in $43.4 billion of operating revenue in the quarter, up $4.9 billion or 12.7% year-over-year. Adjusted earnings per share (EPS) in the quarter were $9.04, beating the Wall Street consensus of $8.78 and representing a year-over-year increase of $1.07, or slightly more than 13%. The firm’s medical loss ratio (MLR) was 86.4%, down 70 basis points from the prior-year quarter — but it increased from the 85.8% figure.
An Elevance press release said the strong top-line revenue result was “primarily driven by premium rate increases in our Health Benefits business and higher premium revenue due to membership growth in Medicaid and Medicare. The increase in operating revenue was further attributable to growth in pharmacy product revenue within CarelonRx driven by growth in external pharmacy members served and the acquisition of BioPlus” — a specialty pharmacy firm — “in the first quarter of 2023.”
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