This is Jacob Emerson with the Becker payer issues podcast. Here's your Bi weekly industry news briefing for May twentieth. Opt is closing a change healthcare care facility in Toledo, Ohio, resulting in the termination of a hundred and 29 employees located in Ohio or or working remotely. The layoffs at the 93000 square foot facility will occur in 3 waves from July fifteenth to September 6, According to regulatory documents filed with the state on May sixteenth.
United Health Group is facing a proposed securities fraud class action lawsuit. Alleging that the company failed to disclose that the justice department opened an antitrust investigation into the organization. The investor investigation come came into the public's attention in February when the Wall Street Journal and other news outlets reported that the justice department was investigating the relationships between the company's various segments, including Opt.
Neither the Doj nor United Health has publicly acknowledged the investigation. As a result of those reports the price of United Health stock declined by 27 dollars per share, erasing nearly 25000000000 dollars in shareholder value. According to the lawsuit filed May fourteenth in a Minnesota Federal Court. The lawsuit from the city of Hollywood firefighters pension fund, alleges that United Health was aware of the investigation since at least October.
The lawsuit said, quote, instead of disclosing this material investigation to investors or the public, United Health, executives sold more than 120000000 dollars of their personally held United Health shares. In the 4 months between learning that the Doj investigation and the investigation becoming public, United Health Chairman, Stephen Hem, sold over a hundred million dollars of his personally held United
Health shares. And Brian Thompson, the Ceo of United Healthcare sold over 15000000 dollars of his personally held United Health shares. Mister Ham and, Mister Thompson are named as defendants in the lawsuit. United Health group Ceo, Andrew Witty, who did not sell share was also named as a defendant. United Health Group executives also say that they're not planning any major shake up. To their Medicare Advantage Business as other insurers plan to pull back their offerings in 20 25.
At May fourteenth investor presentation, Brian Thompson, the Ceo of United Healthcare said medical cost trends and rates from Cms are in line with the company's expectations. He said, quote, I'm really comfortable with what we'll put into the marketplace for next year, and pleased with how we're performing and what the opportunities are on the horizon for 20 25.
Medicare advantages facing major headwind, including including rising medical costs and lower reimbursement rates from Cms. 2 of United Health major competitors, Cvs health and Human said they expect to lose members in 20 25. Both companies said they plan to exit counties where they do not expect to be profitable. And they may cut back benefits in some plans to account for rising medical costs.
At the beginning, of 20 24, Cms implemented changes, the Medicare managed risk adjustment changes that the payer industry opposed. That model is being phased in over 3 years. Well, great plains health, a health system headquartered a North Platt in Nebraska, plans to stop contracting with all Medicare advantage plans. In 20 25. That includes the systems clinics and independent practices, which will drop Cent blue across the shield and United Health care M plans in 20 25.
The system said May sixteenth that it was in... Also encouraging patient stock opt for traditional Medicare in 20 25 to continue receiving care from great plains health providers. Opt This Health System's Chief Medical officer said that to put the patient first, we can no longer be under contract with the plan that causes significant delays and care, longer hospital stays and outright denials of care.
And finally, Blue Cross Blue Shield, Michigan has named Tricia Keith as it's now president and Ceo effective in 20 25. Miss Keith is the first woman to lead the Detroit based payer, and she currently serves as executive Vice President, Coo and President of emerging markets. She's been with the company since 2006. She succeeds Daniel Le, who is retiring after leaving leading the company for 17 years, 1 of the longest serving Ceos across all blue across blue shield plans.
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