News Briefs

As of Feb. 1, at least 16.4 million Medicaid enrollees had been disenrolled from coverage since last April, representing about one-third of people who had applied to have their coverage renewed, according to KFF. KFF said the number of people disenrolled is likely higher “due to varying lags for when states report data.” Of the people who had been disenrolled, 71% were terminated for procedural reasons, meaning they did not complete the renewal process in time. The disenrollment rates ranged from 13% in Maine to 61% in Texas. Overall, states and Washington, D.C., have reported renewal outcomes for 52% of people enrolled in Medicaid, while the remaining 48% of people were awaiting decisions as of Feb. 1.

Dirk McMahon, UnitedHealth Group’s president and chief operating officer, plans on retiring, effective April 1. McMahon joined UnitedHealth in 2003 and has been president and COO since February 2021. UnitedHealth has not named a replacement for McMahon, whose previous roles at the company included CEO of UnitedHealthcare and president and COO of Optum.

U.S. patients paid an estimated 278% more for prescription drugs than patients in other high-income countries did for the same drugs in 2022, according to a RAND Corp. study. U.S. gross prices for brand-name originator drugs were 422% higher than drugs in the comparison countries, RAND found; after rebates were applied, brand-name drugs still cost more than three times the amount paid in other countries. Unbranded generics were the only category that were not “substantially higher” in price than drugs in other countries. As RAND pointed out, unbranded generics account for 90% of U.S. drug volume but just 8% of total drug spending at manufacturer gross prices.

A Johnson & Johnson employee sued the firm over allegations that the medical manufacturing giant overpaid for prescription drugs dispensed by the firm’s employee health plan — which she alleges is a violation of J&J’s fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). The suit is part of what some legal experts have predicted will be a “” of litigation against plan sponsors that may have paid more than they should have for certain health care services and products, potentially including prescription drugs or pharmacy benefits. The plaintiff in the suit is Ann Lewandowski, a health care policy and advocacy director at J&J, STAT reported.

CMS’s Cell and Gene Therapy Access Model’s first focus will be on therapies for sickle cell disease, the agency said Jan. 30. The administration unveiled the model almost one year ago as one of three new models for testing by CMS’s Innovation Center to lower the cost of drugs and increase access to new treatments. The model will implement outcomes-based agreements (OBAs) for cell and gene therapies to treat sickle cell disease beginning in 2025 “and may be expanded to other types of CGTs in the future.” The administration estimates that about half of people with sickle cell disease are enrolled in Medicaid, with health care services costing about $3 billion annually. Through the model, CMS will negotiate OBAs, and states can decide whether to enter into the arrangements. “CMS will negotiate financial and clinical outcome measures with drug manufacturers and then reconcile data, monitor results, and evaluate outcomes. The CGT Access Model will begin in January 2025, and states may choose to begin participation at a time of their choosing between January 2025 and January 2026.”

CMS on Feb. 1 sent initial price offers to the manufacturers of the 10 medications that were selected for the Medicare drug price negotiation program, which goes into effect in 2026. The agency announced the 10 medications in August 2023 and said they accounted for about 20% of total Part D gross covered prescription drug costs from June 1, 2022, to May 31, 2023. The drug companies have 30 days to respond by either accepting the offer or providing a counteroffer. The negotiation period ends on Aug. 1. The drug price negotiation program was implemented as part of the Inflation Reduction Act.

In 2023, 79 health care companies filed for Chapter 11 bankruptcy, according to Gibbins Advisors, a health care restructuring advisory firm. That was up from 46 filings in 2022 and the highest number of Chapter 11 filings in the past five years; the next-highest was 51 in 2019. Gibbins noted that most of the filings involved pharmaceutical and senior care companies. The firm added that 12 hospitals filed for Chapter 11 bankruptcy in 2023, which compares to 11 total between 2020 and 2022. Gibbins analyzes bankruptcies for debtors with at least $10 million in liabilities.

The Biden administration on Jan. 25 released a Request for Information to seek feedback about the best way to enhance Medicare Advantage data capabilities and increase public transparency. In a press release, HHS pointedly noted that “transparency is especially important now that MA has grown to over 50% of Medicare enrollment, and the government is expected to pay MA health insurance companies over $7 trillion over the next decade.” To that end, the agency said it’s seeking data-related input on aspects of the MA program including access to care, prior authorization, provider directories and networks, supplemental benefits, marketing; care quality and outcomes, value-based care arrangements and equity, and “healthy competition in the market, including the effects of vertical integration and how that affects payment.”

Since states resumed the Medicaid eligibility redetermination process — with the first beginning in April 2023 — almost 14.4 million people have lost coverage. That’s according to KFF’s Medicaid Enrollment and Unwinding Tracker, with data representing all states and the District of Columbia as of Jan. 9. States restarted their routine eligibility checking process this spring and summer after being effectively prohibited from doing so during the COVID-19 pandemic. Among the 14 million-plus people who have lost coverage since redeterminations resumed, 71% lost coverage for procedural reasons, KFF said.

CMS on Jan. 9 approved an amendment to New York’s section 1115 demonstration, allowing the state to “make large investments in wide-ranging Medicaid initiatives.” Those initiatives include establishing base reimbursement rates for safety net hospitals; connecting people to housing and nutritional support services; enhancing access to coordinated treatment for substance use disorders; and making long-term investments in the state’s health care workforce. As part of the waiver, New York will also “increase and sustain provider payment rates and Medicaid managed care payment rates for obstetrics, primary care, and behavioral health,” CMS said.

Elevance Health, Inc. has agreed to acquire infusion services provider Paragon Healthcare, Inc., the health insurer said Jan. 4. The companies did not disclose financial details of the deal, which is expected to close in the first half of 2024. Paragon Healthcare serves more than 35,000 people at more than 40 ambulatory infusion centers in eight states, as well as in the home setting, and it treats more than 300 conditions. Once the deal is finalized, Paragon Healthcare will operate as part of CarelonRx, which is the pharmacy segment within Elevance Health’s Carelon health services division. The deal follows Elevance Health’s acquisition of BioPlus, a specialty pharmacy subsidiary of CarepathRx, a portfolio company of Nautic Partners, which it closed in February 2023.

Hizentra (immune globulin subcutaneous [human] 20% liquid) is now available in a 10 g prefilled syringe, manufacturer CSL Behring disclosed Jan. 3. The agent is the first and only subcutaneous immune globulin treatment approved for the maintenance of chronic inflammatory demyelinating polyneuropathy in the U.S. It also is approved for primary immunodeficiency in people at least 2 years old. In addition to the new size, the drug also is available in 1 g, 2 g and 4 g prefilled syringes.

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.

Elevance Health, Inc. has agreed to acquire Paragon Healthcare, a company that provides infusion services to patients. Elevance announced the pending transaction on Jan. 4 and said it expects the deal to close in the first half of this year. The companies did not disclose financial details, but Axios reported Elevance will pay more than $1 billion for Paragon, which operates in Alabama, Colorado, Florida, Georgia, Missouri, Oklahoma, Tennessee and Texas. If the deal closes, Paragon will become part of CarelonRx, Elevance’s pharmacy services segment.

The Cigna Group is in “advanced talks” to sell its Medicare Advantage business to Health Care Service Corp. (HCSC) for between $3 billion and $4 billion, according to a Jan. 3 Wall Street Journal article. The report comes shortly after Bloomberg cited anonymous sources saying HCSC and Elevance Health were interested in acquiring Cigna’s Medicare business, a segment the company entered in 2012 through its acquisition of HealthSpring. Cigna has struggled to compete in Medicare with market leaders such as UnitedHealth Group and Humana Inc., and it has just 580,000 MA lives, according to AIS’s Directory of Health Plans. Earlier last month, the WSJ reported that discussions about a potential transaction between Cigna and Humana had fizzled.

After merger talks fizzled in September, Elevance Health, Inc.’s agreement to acquire Blue Cross and Blue Shield of Louisiana is back on, according to the New Orleans Times-Picayune. The companies had put the $2.5 billion deal on hold due to rising opposition, but the Times-Picayune reported the companies filed a new application on Dec. 14 with the Louisiana Dept. of Insurance. The structure of the deal is largely unchanged, although the companies agreed to expand the board of directors for the Accelerate Louisiana Initiative, a nonprofit foundation. The companies expect the transaction will close during the first quarter of 2024.

More than 19 million people have signed up for coverage via Affordable Care Act exchange plans for next year, according to the most recent data from CMS. The enrollment figures are as of Dec. 15 for the 32 states that use the HealthCare.gov website and through Dec. 9 for the 18 states and Washington. D.C., that have state-based marketplaces. More than 15.3 million had signed up for plans in states using the HealthCare.gov platform, a 33% increase from last year. In addition, more than 745,000 people signed up on Dec. 15, the largest single-day record since HealthCare.gov launched on Oct. 1, 2013.