Federal Litigation

• Humana filed a lawsuit in the U.S. District Court for the Northern District of Texas against CMS alleging that the agency violated the Administrative Procedure Act (Act) in its process of designing and finalizing the risk adjustment data validation (RADV) rule. The lawsuit specifically claims that CMS’ decision to not include a fee-for-service adjustment to the RADV final rule is a violation of the Act. Humana has asked the court to vacate the final RADV rule and block CMS from applying it during the Medicare Advantage plan audits (Inside Health Policy, September 1).

• Blue Cross Blue Shield of North Carolina (Blue Cross NC) has revealed a new mid-year drug formulary that shows the state’s largest health insurer moved all its HIV treatments to a lower tier in its six-tier formulary, resulting in significant reductions in out-of-pocket costs for many patients in the state. HIV patient advocacy groups are hopeful other insurers in the country will do the same. Blue Cross NC removed all quantity limits previously imposed on all HIV treatments and moved 19 generic HIV treatments that were on the fourth, fifth, and sixth tiers of the formulary to the second formulary tier. This new formulary structure results from discrimination complaints from the HIV + Hepatitis Policy Institute, North Carolina AIDS Action Network, the state’s insurance department, and the HHS Office of Civil Rights  in 2022 urging Blue Cross NC to stop placing HIV treatments in the highest tiers of the formulary (Inside Health Policy, August 31).
• Montana Medicaid providers are experiencing a delay in their boosted Medicaid reimbursements as the distribution of funds approved from the state budget bill has experienced a two-month lag. State lawmakers approved $330 million in additional state and federal funds to increase Medicaid reimbursement rates. However, delays in transmitting the state budget bill to the governor for final authorization created subsequent lags in distribution. Appropriations in the state budget are typically implemented on July 1 but providers will not see the increased rates until September 8 (Billings Gazette, September 3).
• The state of New York has approved health insurance premium increases by an average of 12.4% for individual plans and 7.4% for small group plans. The insurers had originally asked for rate increases of 22.1% for individual plans and 15.3% for small group plans. The premium increases will impact over 1 million of the state residents enrolled in individual or small group plans (Politico, August 31).
• In Indiana, the private health information of over 200,000 Medicaid beneficiaries was exposed in a data breach this past spring. In late May of this year, the managed care plan CareSource experienced a breach from software called MOVEit. This follows a previous announcement of a breach involving over 700,000 Indiana Medicaid clients, also linked to MOVEit software and impacting Maximus Health Services. Globally, the MOVEit software breach affected about 1,000 organizations and around 60 million individuals (WFYI Indianapolis, September 1).
• CMS had to continue the hold on the Independent Dispute Process born out of the No Surprises Act after an additional federal court decision in Texas. Judge Jeremy Kernodle, a U.S. District Court Judge for the Eastern District of Texas, issued a fourth win for the Texas Medical Association, concluding that the criteria insurers are using in calculating payments favor insurers over providers. In the decision, Kernodle stated that “parts of the rule allowing a third-party arbitrator to determine what a payer owes a provider unfairly allow insurers to include calculations for ‘ghost’ services, when it submits what it says is an average in-network payment to that provider.” Judge Kernodle discarded CMS’ argument that the dispute process is a convenience to insurers. CMS released a statement responding to the ruling and stating that they are working to make the changes necessary to comply with the court’s order and opinion (Health Payer Specialist, September 1).

News

• Payers are projected to owe enrollees approximately $1.1 billion in rebates for failing to meet medical loss ratio (MLR) thresholds mandated under the Affordable Care Act (ACA). According to an analysis by the Kaiser Family Foundation, the amount of rebates owed in 2023 grew 10% compared to 2022. However, rebates reached a record $2.5 billion in 2020 during the height of the pandemic. Under the ACA, payers are required to spend at least 85 cents of every premium dollar on medical services and quality improvement initiatives for fully insured large group plans and 80 cents of every premium dollar on medical services for individuals and small group plans. For any MLRs below the thresholds, payers are required to refund the difference between the actual MLR and the minimum mandated amount (Health Payer Specialist, September 1).
• Cigna HealthCare of Arizona’s Evernorth Care Group has expanded services in Arizona through a partnership with payer Devoted Health. Evernorth providers are now in-network providers to Waltham, MA-based Devoted Health Medicare advantage members. There are approximately 13,000 Medicare Advantage members throughout Massachusetts. Additionally, Centene’s Wellcare has partnered with The American Legion to be the group’s exclusive Medicare partner. Wellcare will provide services to complement current veteran benefits and will work to destigmatize mental health support and eliminate veteran suicide. Lastly, Hill Physicians Medical Group is expanding its Medicare Advantage services through a partnership with San Francisco-based Chinese Community Health Plan (Health Payer Specialist, September 1).

• In case you missed the 2023 HCBS Conference, we’ve summarized key takeaways from an engaging session, “The Master Plan to Building & Sustaining Provider Relationships: A State Director’s Guide.” Expert speakers from this insightful panel discussed the tensions between states and providers and the solutions states can utilize to overcome them. Click the link here for our session recap.