Court Cases

Copay Accumulator Lawsuit Comes to an End; Will Ruling Be Enforced?

An ongoing lawsuit over the use of copay accumulators is drawing to a close following the defendants’ and plaintiffs’ motions to dismiss their appeals. The ball is now in the federal government’s and state insurance commissioners’ courts to enforce a district court judge’s ruling, which states that manufacturer assistance must be counted toward patients’ out-of-pocket responsibility unless a brand-name drug has a medically appropriate generic equivalent.

Health plans and PBMs several years ago began implementing copay accumulators — and then a new iteration known as copay maximizers that declare certain drugs non-essential health benefits to avoid covering them per the Affordable Care Act (ACA) — to counter manufacturer copay assistance programs. Before these tools, that assistance would count toward beneficiaries’ annual out-of-pocket expenses. When those out-of-pocket maximums were reached, health plans would cover the remainder of members’ costs for the year. With accumulators and maximizers, patients can still use that assistance, but it does not help reduce their out-of-pocket costs.

0 Comments
© 2024 MMIT

AI Helps Streamline Some Health Care Tasks, Prompts Caution With Others

Recently it’s been difficult to underestimate artificial intelligence’s (AI) reach across health care entities such as specialty pharmacies, infusion providers and pharma companies. While AI has helped streamline many processes, its ultimate impact may be debatable at this point, and caution in certain areas is warranted, according to some industry experts.

“AI-enabled solutions have transformed the specialty pharmacy and home infusion industries,” contends Mesfin Tegenu, CEO and chairman of RxParadigm, Inc. He notes that AI’s subset of machine learning (ML) uses algorithms to find patterns and make predictions, leading to streamlined operations, better patient care and optimized resource allocations, all of which have the potential to result in cost savings.

0 Comments
© 2024 MMIT

Copay Accumulator Lawsuit Comes to an End; Will Ruling Be Enforced?

An ongoing lawsuit over the use of copay accumulators is drawing to a close following the defendants’ and plaintiffs’ motions to dismiss their appeals. The ball is now in the federal government’s and state insurance commissioners’ courts to enforce a district court judge’s ruling, which states that manufacturer assistance must be counted toward patients’ out-of-pocket responsibility unless a brand-name drug has a medically appropriate generic equivalent.

Health plans and PBMs several years ago began implementing copay accumulators — and then a new iteration known as copay maximizers that declare certain drugs non-essential health benefits to avoid covering them per the Affordable Care Act (ACA) — to counter manufacturer copay assistance programs. Before these tools, that assistance would count toward beneficiaries’ annual out-of-pocket expenses. When those out-of-pocket maximums were reached, health plans would cover the remainder of members’ costs for the year. With accumulators and maximizers, patients can still use that assistance, but it does not help reduce those out-of-pocket costs.

0 Comments
© 2024 MMIT

Payers Face ‘Ever-Increasing Likelihood’ of ERISA Fiduciary Lawsuits

As plan beneficiaries and lawyers gain access to newly released price transparency data, health plans and plan sponsors must take proactive steps to limit their legal risk of violating health plan fiduciary standards under the Employee Retirement Income Security Act (ERISA), according to experts from the law firm Faegre Drinker. Experienced plaintiffs' attorneys are actively looking for cases that could establish a cottage legal industry around ERISA plan fiduciary suits, the experts say.

“There is an ever-increasing likelihood that some action or omission by health plan fiduciaries will be scrutinized either by the Department of Labor, or in a class action lawsuit brought by plaintiffs lawyers representing plan participants,” said Kendra Roberson, partner at Faegre Drinker, during a Jan. 25 presentation on ERISA health plan fiduciary legal risk. “These lawsuits would be similar to those that have been brought against retirement plan fiduciaries challenging 401(k) and 403(b) plan fees and costs.”

0 Comments
© 2024 MMIT

News Briefs: CMS Finalizes New Prior Authorization Requirements

The Biden administration on Jan. 17 finalized its interoperability and prior authorization (PA) requirements for government-funded payers, including insurers offering Medicare Advantage and managed Medicaid plans as well as plans on federally facilitated exchanges. CMS said in a press release that “these policies will improve [PA] processes and reduce burden on patients, providers, and payers” and estimated they would lead to $15 billion of savings over a 10-year period. The rules include a requirement that MA and Medicaid plans starting in 2026 will have to send PA decisions within 72 hours for urgent requests and seven days for non-urgent requests. Payers will also have to disclose a reason for denying a PA request and publicly report PA metrics.

The Cigna Group has named Brian Evanko president and CEO of Cigna Healthcare, its health insurance arm. Evanko will continue to serve as The Cigna Group’s chief financial officer, a role he has held since January 2021. He previously led Cigna Healthcare’s U.S. government business. Cigna also promoted Bryan Holgerson to president of Cigna Healthcare’s U.S. commercial business, replacing Mike Triplett, who will retire by the end of the year. In addition, The Cigna Group hired Ann Dennison as deputy CFO. Dennison was previously the CFO at Nasdaq. Further, Evernorth President and CEO Eric Palmer expanded his role to lead The Cigna Group’s enterprise strategy and corporate development teams.

0 Comments
© 2024 MMIT

Tukey Trouble Sparks Elevance Suit Against HHS; Others May Follow

After a significant decline in Star Ratings performance for 2024, Elevance Health, Inc. and its affiliates have filed a lawsuit challenging CMS’s implementation of the Tukey outlier deletion methodology. Intended to infuse more “predictability and stability” into the Star Ratings by removing outliers from the cut point calculations for certain measures, its introduction was “fraught with errors and ambiguities during rulemaking” and marks a violation of the Administrative Procedure Act (APA), contends Elevance. And according to a leading Star Ratings expert, Elevance may not be the only MA insurer to sue CMS over its controversial implementation of the methodology.

The suit was filed by Elevance and affiliated entities in 18 states on Dec. 29 in the U.S. District Court for the District of Columbia. In its complaint, Elevance contends that CMS’s actions were “unlawful, and arbitrary and capricious” when it applied Tukey to the 2024 Star Ratings while contradicting its own policy of establishing “guardrails” for determining Star measure cut points. It also alleges that CMS was arbitrary and capricious when calculating the cut points and determining the plaintiffs’ Star Rating on a single Part D measure — Call Center-Foreign Language Interpreter and TTY Availability.

0 Comments
© 2024 MMIT

With AI, Health Insurers Can Expect Legal Risk, Incremental Regulation

Managed care experts predict that 2024 will see further and deeper adoption of artificial intelligence (AI) across the health care sector despite emerging legal risk. Meanwhile, regulation of AI in health care is already underway, but mostly at the state level, with action in Congress stalled and the Biden administration taking an incremental approach.

Health insurers for years have put big data at the center of significant capital investments and operational changes, as major insurers have portrayed themselves as technology players with vast proprietary data sets. For many insurers, automation and algorithms are already intrinsic to claims processing, prior authorization, revenue cycle management and actuarial work. AI could make those insurance processes faster and cheaper.

0 Comments
© 2024 MMIT

Legal Battle Over Copay Accumulators Continues; Questions Remain Over HHS Policy Enforcement

A district court judge wasted no time in responding to the latest motion in an ongoing lawsuit filed against HHS by patient advocacy groups over the use of copay accumulators. In his decision, the judge reiterated his September decision vacating one rule and reinstating another that prohibits the use of accumulators for drugs that do not have a medically appropriate generic equivalent. It’s not entirely clear what next steps will be, but one patient advocacy group says it hopes to see HHS enforce the policy limiting plans’ use of accumulator programs.

While pharma manufacturers began offering the programs to help patients stay on costly therapies, payers have pushed back, saying they lead to higher-cost agents to be used over lower-cost ones. At the same time, similar programs, such as copay maximizers and alternate funding programs, have increased in use, to payers’ dismay.

0 Comments
© 2024 MMIT

News Briefs: Walgreens Agrees to Pay Humana $360 Million to Settle Pricing Allegations

Walgreens Boots Alliance Inc. agreed to pay Humana Inc. $360 million to settle allegations that Walgreens’ retail pharmacies overcharged for prescription drugs. Walgreens said in a Jan. 4 U.S. Securities and Exchange Commission filing that it had paid $150 million of the settlement amount last month. In May 2023, Walgreens filed a lawsuit asking a judge to overturn a $642 million arbitration judgement awarded to Humana two months earlier. Walgreens has faced other lawsuits in recent years alleging the company overcharged for medications. For instance, Walgreens in 2019 paid the federal government and states a $269.2 million settlement related to allegations that it improperly billed Medicare, Medicaid and other health care programs for insulin pens. And in 2022, three Blue Cross and Blue Shield affiliates sued Walgreens over generic medication pricing.

0 Comments
© 2024 MMIT

Rule Restricting Copay Accumulators Has Been Reinstated, Court Clarifies

While many people had closed their laptops and were gearing up to open presents, the U.S. District Court for the District of Columbia offered a gift to patient advocates that have been fighting for restrictions on private health plans’ use of copay accumulator programs.

In September, Judge John Bates ruled in favor of a challenge brought by patient advocates — including the HIV + Hepatitis Policy Institute, the Diabetes Patient Advocacy Coalition and the Diabetes Leadership Council — to provisions in a 2021 rule that allowed group and individual health plans to apply copay accumulators even when drugs have no therapeutic alternative. Such programs prevent enrollees from counting any drug manufacturer discounts, like copay coupons, toward their deductibles and out-of-pocket maximums. Insurers and PBMs argue that copay accumulators are necessary to prevent copay coupons from steering patients to high-cost branded drugs — raising costs for everyone — but patient advocates contend that those coupons are necessary to promote affordability amid benefit designs that force patients to bear the brunt of their prescription drug costs.

0 Comments
© 2024 MMIT