Introduction
In a significant healthcare legislative update, California Governor Gavin Newsom vetoed two important healthcare-related bills, creating ripples across the payer and provider landscapes. In addition, Elevance Health (formerly Anthem) is embroiled in a lawsuit over its exclusion of anti-obesity medications from its health plans. Meanwhile, Minnesota health systems have taken a firm stand against Humana and UnitedHealthcare over Medicare Advantage plans. This roundup will provide detailed insights into these developments and their implications on the healthcare industry.
Governor Newsom’s Vetoed Bills
PBM Licensing and Oversight Bill
One of the key vetoes by Governor Newsom was the bill that proposed to implement a licensing and oversight structure for pharmacy benefit managers (PBMs) under the California Department of Insurance. The bill sought to ensure that PBMs would be more transparent by reporting data related to prescription drug costs. Governor Newsom vetoed the bill citing the need for more granular information before making decisions that would affect drug pricing transparency. His decision has stirred debate over the role of PBMs in rising drug prices.
Private Equity Healthcare Investments Bill
Governor Newsom also vetoed another bill that targeted private equity firms’ investments in healthcare. The bill proposed that private equity investors seek approval from the state attorney general before engaging in healthcare investments. It also aimed to impose restrictions on the relationship between private equity firms and physician practices. Newsom vetoed this bill, arguing that it overlapped with the responsibilities of the Office of Health Care Affordability, which already refers certain transactions to the state attorney general’s office. This veto has raised concerns about the unchecked influence of private equity in the healthcare space.
Elevance Health Sued Over Anti-Obesity Medications
The Lawsuit’s Key Arguments
Elevance Health is facing a class-action lawsuit in Maine for allegedly discriminating against individuals with obesity by excluding prescription medications for obesity treatment in its health plans. The lawsuit argues that this exclusion violates the Affordable Care Act’s (ACA) prohibition against discrimination based on disability. Medications like semaglutide and tirzepatide, typically covered for other conditions, are excluded when prescribed for obesity.
Impact on Obesity Treatment
The lawsuit highlights a broader issue of access to obesity medications, which have gained popularity for their effectiveness. Anti-obesity treatments are crucial for individuals suffering from obesity-related conditions, and the exclusion of these medications from health plans raises questions about healthcare equity and discrimination.
Minnesota Health Systems vs. Humana and UnitedHealthcare
Essentia Health and Sanford Health’s Stand
In Minnesota, Essentia Health announced that it would no longer accept Medicare Advantage plans from UnitedHealthcare and Humana starting in January. The health system cited delays caused by prior authorization processes as a key reason for this decision. Sanford Health, another Minnesota-based system, followed suit, announcing it would drop Humana’s Medicare Advantage plans by year-end. These decisions could have significant implications for Medicare Advantage beneficiaries, who may need to find new providers or insurance options.
LMH Health and Medicare Advantage Plans
Kansas-based LMH Health joined the trend by cutting ties with Humana and Aetna’s Medicare Advantage plans, also due to issues related to prior authorization delays. This growing rift between health systems and Medicare Advantage insurers highlights ongoing frustrations within the healthcare industry regarding administrative burdens and delays in patient care.
Legislation Updates Across the U.S.
Alaska’s PBM Bill
Alaska recently signed a bill into law that requires pharmacy benefit managers to pass on negotiated discounts to the state and disclose conflicts of interest. This bill is aimed at combating the monopolistic practices of PBMs that have driven independent pharmacies out of business and contributed to rising prescription drug costs.
Competing IVF Bills in the Senate
Two competing bills regarding in vitro fertilization (IVF) failed to advance in the Senate. The Democratic-backed bill sought to protect access to IVF while Republican lawmakers pushed for a version they claimed would provide better protections. Both bills failed to garner the necessary votes, leaving IVF access rights unresolved for the time being.
No Surprises Act Amendments
A new bill has been introduced in Congress to amend the No Surprises Act, with the aim of closing loopholes and enhancing protections for patients against surprise medical bills. The proposed legislation seeks to increase penalties for health plans that violate balance billing requirements and improve enforcement mechanisms.
Legal Actions and Industry Developments
Kentucky’s Lawsuit Against Express Scripts
Kentucky has filed a lawsuit against Express Scripts, accusing the PBM of being complicit in the opioid crisis by allegedly colluding with manufacturers to increase opioid sales. The lawsuit mirrors a similar case filed in Arkansas, where state officials claim that PBMs played a role in exacerbating the opioid epidemic.
Blue Cross Blue Shield of Louisiana’s $421M Fraud Case
A jury has ordered Blue Cross Blue Shield of Louisiana to pay $421 million in damages after finding that the insurer committed fraud by only paying a fraction of the costs for breast reconstruction surgeries over the past seven years. The ruling is one of the largest penalties ever imposed on a health insurer for fraudulent billing practices.
Aetna’s Class Action Lawsuit Over Gender-Affirming Care
Aetna is facing a class-action lawsuit for allegedly denying coverage for gender-affirming facial reconstructive surgeries. The lawsuit argues that Aetna’s refusal to cover these surgeries while providing coverage for other facial reconstructive procedures, constitutes discrimination based on gender identity.
Conclusion
The healthcare landscape continues to be shaped by significant legislative, legal, and industry developments. From Governor Newsom’s vetoes of key healthcare bills in California to lawsuits against major insurers like Elevance Health and Aetna, the payer and provider landscape is constantly evolving. These developments not only affect the way healthcare is administered but also highlight the ongoing challenges surrounding access, affordability, and equity in healthcare.
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FAQs
Q: Why did Governor Newsom veto the PBM licensing bill?
A: Governor Newsom vetoed the bill, citing the need for more detailed information before establishing a licensing and oversight structure for PBMs.
Q: What is the lawsuit against Elevance Health about?
A: The lawsuit accuses Elevance Health of discriminating against individuals with obesity by excluding prescription medications for obesity treatment from its health plans.
Q: Why are Minnesota health systems dropping Humana and UnitedHealthcare?
A: Minnesota health systems, including Essentia Health and Sanford Health, are dropping Humana and UnitedHealthcare due to delays in care caused by their prior authorization processes.
