This is Jacob Emerson with the Becker payer issues podcast. Here's your bi weekly industry news briefing for June seventeenth. Cms has recalculate Medicare Advantage plans star ratings after insurers, challenging the agency's methodology were handed recent court injuries. In a memo sent to Medicare Advantage carriers on June thirteenth. The agency said it would recalculate plans star ratings for 20 24 without eliminating extreme outliers.
Back in early June, a judge ruled in favor of scan health plan, which sued over the agency's Star Ratings new methodology. Days later, a judge handed El health, a partial victory in a similar case. Both scan and El challenged Cms implementation of the tu key outlier rule, which eliminates extreme outliers from datasets used to calculate the star ratings, making its more difficult to achieve a high rating.
Insurers had argued that Cms did not follow proper administrative procedures in implementing the route rule. Judges presiding over those 2 lawsuits ruled, the agency had violated the administrative procedure Act when it implemented the new methodology. Rule In the letter, Cms said it will revise star ratings for plans using 20 23 cut points. Cms will not decrease any plans ratings. Plans must achieve a 4 star rating or hired to receive quality bonus payments from Cms.
The ratings determine how much plans will earn in bonus payments in 20 25 with some insurers standing to bring in millions more with the revised ratings. In its letter to plan directors, Cms said plans that see their star rating go up as a result of the change. Will have until June 20 eighth to revise their 20 25 bids. Well Blue Cross Blue Shield of Michigan says it will no longer cover Gl 1 drugs to treat obesity beginning this January.
A spokesperson for Michigan's largest and sure told Bloomberg that it will drop coverage of Gl 1 drugs for weight loss under its fully insured large group commercial health plans. That change will affect nearly 10000 members. A spokesperson for the company cited concerns over safety, effectiveness, and costs as the reason for the decision. Back in March, Bc, Michigan reported its pharmaceutical costs increased by 1800000000.0 dollar in 20 23, including a 350000000
dollar increase in Gl 1 costs. Gl 1 medications can cost upward to 15000 dollars versus a year. Research published by the Bc Association in May found that nearly 06:10 adults prescribed a Gl 1 of a drug for weight loss discontinue the drug before seeing any meaningful clinical benefits. Well, speaking of weight loss drugs around 1 in 3 employers covering Gl ones for weight loss in 20 23. 1 in 3 employers now are. A survey from the international, foundation
of employee benefit plans found. In 20 23, 34 percent of employers surveyed cover Gl ones for weight loss, and 57 pro percent covered the drug to treat type 2 diabetes. The number of employers covering the cost of the drugs for weight laws increased from 28 percent in 20 22. So The nonprofit educational platform survey was published June port thirteenth and pulled 279
large. Lawyers. Well, in El Health executives said the company is comfortable with its Medicare Advantage business as other major insurers project loss lawyers in the market. Speaking of the Goldman Sachs Healthcare conference on June twelfth. El Vice President of Investor Relations said The company is comfortable predicting market plus growth for the company's Medicare Advantage business in 20 25.
Now exact growth is difficult to predict without knowing what El competitors are offering next year, but the company could pick up members who leave other insurers. Difficult Medicare Advantage market of course is facing 2 major headwind, rising medical costs and utilization among the M population and reduced reimbursement from Cms. Cbs and Human men have both said they will exit some markets next year and potentially reduce benefit offerings to accommodate those rising costs.
Sea Cvs has predicted Ae could lose 10 percent of its M membership next year. El expects its Medicare Advantage business to be profitable in 20 24, though below the company's target margin. United Health has also maintains. Did is well positioned to weather market headwind. Executives there told investors in May that the company is comfortable with its M positioning for 20 25 and but were non commit on growth numbers.
A large group of Us lawmakers have introduced legislation aimed at reforming the Medicare Advantage prior auth authorization process. The legislation is an updated version of legislation that passed the house of representatives in 20 22 but stalled in the senate.
If Bass, that bill would establish an electronic prior authorization process for M plans, including a standardized 20 standardization for transactions and clinical attachments, it would include increased transparency around M prior authorization requirements and use. It would clarify Hhs authority to establish time frames for electronic prior authorization requests, including but expedited did determinations, real time decisions for between the approved items and services,
and other prior auth requests. It also expand beneficiary protections to improve enroll experiences and outcomes, and it would require Hhs and other federal agencies to report to congress on program, integrity efforts and other ways to further improve the electronic prior authorization process. That bill is sponsored by a hundred and 30 members in the house and 42. And senators.
In response to the February, Ransom attack on change healthcare, Cms is introducing special measures to assist affected organization in navigating the federal independent dispute resolution process under the no surprises Act. Cms reported receiving numerous complaints from healthcare providers since facilities and air ambulance services about difficulties in
initiating open negotiation. These challenges are due disruptions in receiving ness necessary payment information and disclosures from plans or issuers caused by the change of cybersecurity incident, which has significantly delayed claims processing nationwide. To address these issues, Cms designated a special period for affected organizations These entities can initiate open negotiation for any service provided on or after January first at any time from June fourteenth to October twelfth.
This special period applies regardless of when they received payment or denial notices. To utilize this special period, parties must submit an anti station form along with the standard open negotiation negotiation form, certifying that the incident impacted their ability to start open negotiation. Let edison us, new Jersey based Hack and Sack Meridian Health and Ae, they'll be out of network on July first without a new
contract in place. Ae Medicare Advantage members could lose coverage July first across hack and Sa, 18 hospitals along with the systems urgent care centers, outpatient clinics and 7000 physicians. Ae members with self insured plans will be out of network on September 20 ninth. Members with fully insured plants which include employer and Aca plans will be out of network on October 20 ninth.
And finally, Blue Shield of California has Na day contract, managing care for 400000 California state employees. Blue Shield won out over Anthem Blue Cross, which has held the extra more than 2 decades. That contract is for the California Public employee's retirement system for its Ppo contract. Cal, provides health coverage to 1 and a half million current and retired state employees. The Ppo contract covers 250000 employee in basic Ppo plans and a hundred
and 50000 with Medicare supplement coverage. The 5 year contract will begin in 20 25. These The agency also awarded a contract to included health to provide virtual care and population health management. The new contract with Blue Shield includes risk based thresholds, for medical cost trends and outcomes. Blue shield and included health will put 464000000 dollars at risk if they do not meet cost trend goals.
The contracts set the initial medical cost trend target at 5 and a half percent in 20 25, and that will low lower each year until it reaches a 3 percent in 20 29. If you like the latest health insurance industry news delivered straight inbox every morning, subscribe to the Becker payer issues e newsletter on our website at becker payer dot com.