Health Plan Weekly

Experts in primary care say the field has still not resolved long-term financial and structural challenges exposed by the COVID-19 pandemic. They also point out that primary care must play a central role if the health care industry will successfully confront the structural racism and inequality made worse by COVID-19.

In a Feb. 17 virtual event organized by the Robert Graham Center, a think tank that studies population health, family medicine and primary care, panelists described the financial challenges posed to primary care by the pandemic, which include accelerating consolidation and a problematic reliance on fee-for-service revenue. The panel, which featured executives, researchers and practitioners from organizations including CVS Health Corp. and UCLA, also observed that PCPs are on the front lines of population health challenges caused by structural inequality — which the pandemic has made even worse.

Although CVS Health Corp.’s stock price dropped about 5% after the company reported its fourth-quarter and full-year 2020 financial results on Feb. 16, equities analysts seemed to be unshaken in their view that the firm — which owns health insurer Aetna — has strong fundamentals.

For the fourth quarter of 2020, CVS’s net income of $975 million was down 44% compared with the prior-year period, a result the company partially attributed to lower operating income driven by the impact of the COVID-19 pandemic on its Health Care Benefits and Retail/Long-Term Care segments. For the full year 2020, CVS’s operating income and net income increased relative to 2019, fueled in part by a $307 million payout from the Affordable Care Act’s risk corridors program and a $269 million gain from the sale of the firm’s workers’ compensation business.

In recent weeks, the Biden administration has begun the process of rescinding Trump-era waiver programs authorizing Medicaid work requirements. Experts say that the new administration has a strong legal position in doing so, even though it faces some road blocks, and that the moves are part of a larger strategy to bolster Medicaid.

Experts anticipated the move by the new administration to directly address work requirements following an executive order from President Joe Biden (HPW 2/5/21, p. 1) that directed agencies to review “demonstrations and waivers, as well as demonstration and waiver policies, that may reduce coverage under or otherwise undermine Medicaid or the ACA.” On Feb. 12, CMS sent letters to states that received Section 1115 waivers under the Trump administration that allowed them to require certain Medicaid beneficiaries to prove they are employed, looking for work or volunteering. State Medicaid chiefs in Arizona, Arkansas, Georgia, Indiana, Nebraska, Ohio, South Carolina, Utah and Wisconsin all received letters. Arkansas is the only state that has been able to put work requirements into effect, though its demonstration program was suspended after federal courts ruled against it.

Executives at CVS Health Corp. revealed on Feb. 16 that its Aetna insurance division plans to return to the Affordable Care Act exchanges starting in 2022, a move that health care policy experts say underscores the increasing attractiveness of the individual insurance market for carriers. They also indicate that the trend is expected to continue, barring some major — and unlikely — policy shift.

“After careful consideration, we have decided to reenter the individual public exchange market as of January 1, 2022,” newly minted CEO Karen Lynch said in her prepared remarks during CVS’s earnings call to discuss fourth-quarter and full-year 2020 financial results (see story, p. 3). “As the ACA has evolved, there is evidence of market stabilization and remedies to earlier issues,” Lynch added. “It is now time for us to participate in these markets. We will show that we can bring great value to those who seek coverage.”

✦ Humana Inc. announced a deal with IBM Corp. that will offer the insurer’s commercial group members an online chat virtual assistant based on IBM’s Watson Health conversational artificial intelligence software. The service will be available to all of Humana’s 1.3 million employer group medical members and 1.8 million of Humana’s employer group dental members. A press release noted that “consumers who do not understand how their health plan works or how to estimate out-of-pocket costs are more likely to delay or avoid essential care,” and positioned the agreement as a solution to that problem. Read more at http://huma.na/3qcVnn3.

✦ The American Hospital Association (AHA) sent a letter to CMS calling on the agency to investigate UnitedHealth Group’s diagnostic testing and specialty pharmacy benefit designs. The letter accused UnitedHealth’s recently announced “Designated Diagnostic Provider” program of being an attempt to “eliminate coverage for diagnostic tests at most freestanding and hospital labs while continuing to portray these providers as ‘in-network’ to health plan enrollees.” It also criticized UnitedHealth’s policy requiring providers to use drugs purchased and handled by the health plan and its OptumRx specialty pharmacy subsidiary. The AHA suggests that the policy might prevent “appropriate storage and handling of those drugs.” Read the letter at https://bit.ly/375XGkq.