Health Plan Weekly

While Affordable Care Act supporters might be tempted to cheer the recent decision by Donald Trump’s administration to defend the law, some legal experts say there are reasons to be concerned about the motive behind that move. 

“Probably this administration found it appealing that this was a case where their position would be [that] they are maintaining control and oversight” of the U.S. Preventive Services Task Force (USPSTF), says Richard Hughes IV, a health care lawyer at Epstein Becker Green. 

At least two states have recently proposed legislation taking health insurers to task over claims denials — an issue that has received fierce criticism from the public in the wake of the December 2024 shooting death of UnitedHealthcare CEO Brian Thompson. One expert tells AIS Health that the bills reflect a “deep dissatisfaction” with insurers from the public and lawmakers alike. 

On Feb. 18, California state Senator Scott Wiener, a Democrat, introduced Senate Bill 363. The bill requires insurers to disclose details of claims denials. It also states that if more than half of a company’s denials are overturned on appeal, fines will be imposed: $50,000 for the first violation, $100,000 to $400,000 for the second violation and $1 million for each subsequent case. The fines will be reinvested by the state to provide health care services. 

Although UnitedHealth Group’s stock price declined by more than 7% following a Feb. 21 Wall Street Journal article about a Dept. of Justice investigation, equity analysts downplayed the impact on the company’s long-term financial performance. The reported civil fraud investigation centers on whether UnitedHealthcare, the company’s insurance subsidiary, improperly recorded diagnoses that led to higher payments. The DOJ is separately conducting an antitrust investigation into UnitedHealth, which began in October 2023. 

Mizuho analysts in a Feb. 21 note wrote that “although the investigation is new, the issues brought into question are not.” They noted CMS in its 2024 Medicare Advantage rate notice “eliminated several codes overused by [the] industry” and that the industry is now in the second year of the three-year version 28 (v28) of the CMS Hierarchical Condition Categories risk adjustment model. The most recent data cited in the Journal article was from 2021 when the v24 risk model was in place, which differs significantly from v28. 

Health plans are increasingly looking to adopt value-based care initiatives with specialists and clinicians in rural areas, according to executives who spoke Feb. 24 at the virtual Value-Based Payment Summit. While they noted it is challenging getting physicians to move away from a fee-for-service arrangement, the speakers said they have made strides among primary care practices that have become accustomed to risk-sharing reimbursement arrangements for several years.  

Ross Lagerblade, associate vice president of value-based strategies at Humana Inc., said about 70% of the insurer’s members are aligned with providers that participate in value-based payment arrangements. The insurer mostly works with primary care physicians on value-based care, but Lagerblade said the company has begun working with specialists in oncology, kidney disease and other areas on efforts to tie reimbursement to quality and cost savings. Still, those specialists are not in two-sided risk arrangements. 

Private equity firms continued to invest in health care at a steady pace in 2024, despite the increasing regulatory scrutiny and high interest rates, according to an annual report from the Private Equity Stakeholder Project.

The report tracked 1,049 unique PE-backed health care deals in 2024, a 7.6% decrease compared to 2023. The deals included 166 leveraged buyouts, 262 growth/expansion investments, and 621 add-on acquisitions to 383 unique platform companies. At least 16 PE firms completed 10 or more deals. And at least 13 PE-owned platform companies made five or more add-on acquisitions, over half of which were dental care companies.