After an administrative law judge (ALJ) agreed with protesters that the Arizona Health Care Cost Containment System (AHCCCS) used an “arbitrary and flawed procurement process” that involved the use of undisclosed scoring criteria when awarding new contracts for the Arizona Long Term Care System (ALTCS), the implementation of the new pacts is on hold. AHCCCS on Aug. 13 said it is “pausing member transition activities” related to the new contracts that were scheduled to begin Oct. 1 and initially awarded to subsidiaries of Centene Corp. and UnitedHealthcare (UHC).

AHCCCS has 30 days to accept, modify or reject the ALJ’s decision, which was issued Aug. 9. The agency said it is “currently in the process of reviewing” the decision.

As evidenced by hotly contested Medicaid contract awards in Florida, Kansas and Texas this year, local and regional health plans are increasingly being shut out of opportunities to serve enrollees in their communities. And though a recent administrative law judge decision in Arizona suggests the winds could be changing, community plans need to become more strategic about their approach to procurements, says one industry expert.

Beyond the headlines, “so much more has happened in the Medicaid space than the eligibility redetermination process,” says Clay Farris, founder and practice lead of client solutions at Mostly Medicaid, which offers advisory services to community plans and other stakeholders across the Medicaid continuum. He is referring to the so-called unwinding of policies that were in place during the COVID-19 public health emergency, when a yearslong pause on routine eligibility checks led Medicaid and Children’s Health Insurance Program (CHIP) enrollment to hit an unprecedented 94 million in March 2023. As of Aug. 1, at least 24.8 million people had been disenrolled from Medicaid because of redeterminations, KFF reports.

For the 2025 plan year, Centene Corp. will not offer Medicare Advantage plans in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont, Modern Healthcare reported, citing an Aug. 5 note from investment bank Stephens. However, Centene will continue offering Medicare Part D Prescription Drug Plans in those states. Pinnacle Financial Services, a health insurance brokerage, also posted to its website a notice from Centene about exiting those markets, which account for about 3% of the insurer’s MA membership.

BlueCross BlueShield of Vermont, the state’s largest insurer, is on the verge of insolvency, according to a July 29 article in the Burlington Free Press. However, Kevin Gaffney, commissioner of the state’s Department of Financial Regulation, told the newspaper, “BlueCross BlueShield of Vermont is a big tanker. We have to start to turn it. We can do that and there are steps to do it.” Gaffney said he is requiring the insurer to file a plan of solvency by early September. In October 2023, BCBS of Vermont finalized an “affiliation” with Blue Cross Blue Shield of Michigan in which the Vermont plan became a subsidiary of BCBS of Michigan.

While pharmacy benefit managers are no strangers to litigation, in recent weeks there has been a notable uptick in lawsuits that challenge — both directly and indirectly — PBMs’ ability to ensure clients are able to access the lowest possible drug prices. Sources say that as those suits progress, they could wind up shedding greater light on business practices that have caused PBMs to be caught in regulators’ crosshairs.

In mid-July, Vermont Attorney General Charity Clark (D) filed a lawsuit against The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark, and “nearly two dozen affiliated entities,” accusing them of violating Vermont’s Consumer Protection Act by “manipulating the marketplace and reducing access to certain prescription drugs, including lower-cost drugs, through a series of tactics with no transparency in their decision-making process.”

Former Wells Fargo employees sued the company on July 30, alleging the financial firm overpaid for prescription medications covered by its prescription drug plan, STAT reported. The proposed class action lawsuit alleges Wells Fargo failed to satisfy its “fiduciary obligations at multiple steps in the process of administering prescription drug benefits” as mandated under the Employee Retirement Income Security Act of 1974, and that it paid excessive fees to The Cigna Group’s Express Scripts PBM. The lawsuit, filed in the U.S. District Court for the District of Minnesota, is similar to one filed in February by a Johnson & Johnson employee. Both suits cited a STAT investigation from June 2023 that detailed the relationship between PBMs and consulting firms, which may raise concerns about conflicts of interest. Wells Fargo and Johnson & Johnson each use Express Scripts as their PBM and Aon as their drug benefits consultant.

CVS Health Corp. announced on Aug. 1 an initiative to provide timely excessive heat alerts and outreach to at-risk members of Aetna health plans. CVS is focusing on people “most vulnerable to extreme weather events that can worsen existing chronic conditions,” according to a press release. This fall, it will expand to people who are susceptible to reduced lung function, asthma and cardiac problems. CVS plans to make the service available eventually to its MinuteClinic and CVS Pharmacy locations. CVS said care managers have worked with “hundreds of at-risk patients” in 20 states since launching the initiative two weeks ago.

As publicly traded insurers vie for contracts in an increasingly competitive Medicaid environment, this year has seen a considerable uptick in bid protests and legal challenges with billions of dollars at stake. Dayton, Ohio’s CareSource, one of the largest not-for-profit Medicaid insurers in the U.S., has participated in at least five such protests after embarking on an aggressive market expansion. And while its approach involving strategic partnerships with local providers has had mixed results, the insurer is intent on pursuing states where it believes it can best serve enrollees, whether that be through Medicaid or other product lines.

CareSource currently serves 2.1 million enrollees in Medicaid, Affordable Care Act exchange and dual eligible plans. According to AIS’s Directory of Health Plans (DHP), nearly 1.8 million (or about 85%) of those lives are in Medicaid or duals plans in Georgia, Indiana, Michigan and Ohio. Its home state of Ohio is its largest Medicaid market, where it serves approximately 1.2 million individuals.

Legal experts during a recent panel discussion said federal agencies and lawmakers have new uncertainty around health care regulation in the aftermath of the Supreme Court’s decision to end a legal concept that gave agencies broad leeway when they issued rules.

In its rulings in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court effectively repealed Chevron deference, a legal precedent that is more than 40 years old. The idea behind it is that agency staff have subject matter expertise that Congress is unlikely to share, and Congress couldn’t be expected to continually update statutes to address every emerging issue of importance to a specific sector of the economy.

CVS Health Corp.'s Caremark will pay at least $45 million to the state of Illinois to settle accusations from the state's attorney general, Democrat Kwame Raoul, that the PBM didn’t pass through rebates to the state's health plans. According to a June settlement document obtained by STAT, Raoul accused CVS of "unlawfully depriv[ing] the state" of owed rebates negotiated with manufacturers for prescription drugs. CVS denied mishandling the rebates but still agreed to settle the case.

Vermont Attorney General Charity Clark, a Democrat has filed a lawsuit against The Cigna Group’s Evernorth and Caremark. A July 17 press release alleges that the two PBMs “grant placement on their standard formularies to the prescription drugs with the largest payments from manufacturers and the highest list prices, while excluding lower-cost prescription drugs.” Clark is just the latest state attorney general to target PBMs. Among others, Arkansas Republican Attorney general Tim Griffin recently sued UnitedHealth Group’s Optum Rx and Evernorth over their alleged roles in the opioid epidemic. And in 2023, Ohio Attorney General Dave Yost filed a lawsuit accusing Express Scripts, Prime Therapeutics, Humana Pharmacy Solutions and Ascent Health Services of colluding to drive up drug prices.

Another state attorney general, Vermont Democrat Charity Clark, has filed a lawsuit against prominent PBMs — in this case, The Cigna Group’s Evernorth and CVS Health Corp.’s Caremark. According to a July 17 press release from Clark’s office, the two PBMs “control approximately 95% of the commercial market in the state” and “as a result, they have a hand in nearly every prescription transaction and have near complete control over the pricing, dispensing, and reimbursement systems.” The press release alleges that the two PBMs “grant placement on their standard formularies to the prescription drugs with the largest payments from manufacturers and the highest list prices, while excluding lower-cost prescription drugs.” Arkansas Republican Attorney general Tim Griffin recently sued UnitedHealth Group’s Optum Rx and Evernorth over their alleged roles in the opioid epidemic. And in 2023, Ohio Attorney General Dave Yost filed a lawsuit accusing Express Scripts, Prime Therapeutics, Humana Pharmacy Solutions and Ascent Health Services of colluding to drive up drug prices.