Scams are on the rise and health insurance is no exception.
Picture this: you have a medical emergency, you head to a hospital, only to discover that your health insurance that you pay hundreds for each month doesn’t even exist.
The FTC is now sending out nearly $100 million in refunds to consumers that purchased fake health plans from Benefytt Technologies. The company and its third-party partners marketed and operated deceptive plans that targeted consumers searching for a comprehensive plan under the Affordable Care Act (ACA).
A 2022 FTC complaint details how Benefytt sales agents made telemarketing calls pitching their sham health plans that were not ACA-qualified. When consumers navigated the company’s websites, they were often led to a sales agent who would pitch them Benefytt’s unqualified, fake plans. Consumers were led to believe they were purchasing comprehensive plans for hundreds of dollars each month that in reality, left them with no protection in a medical emergency.
The Tampa-based company has been ordered to pay $100 million in refunds to consumers which included illegally charged junk fees for unwanted add-on products without their permission. In the settlement, Benefytt was also prohibited from lying about its products and charging these immense junk fees.
According to the FTC’s complaint, Benefytt’s deceptive sales process violated the FTC Act, the Telemarketing Sales Rule and the Restore Online Shoppers Confidence Act. All of these harmed consumers in numerous ways, such as: lying about the nature of the plans, bundling and charging junk fees for unwanted products without consent, and making it hard to cancel.
In separate court orders, Benefytt’s former CEO Gavin Southwell and former vice president of sales Amy Brady were permanently banned from selling or marketing any healthcare-related product. The former VP was also banned from telemarketing. Southwell acted as Benefytt’s president and CEO from 2016 to 2021 and Brady served as vice president of sales for more than a decade, before also leaving in 2021.
The complaint also alleges that Benefytt, Southwell, and Brady all were aware of their agent’s misconduct, but rather than stopping it, continued to profit from it and took steps to further conceal the deception. One example the complaint offered details how Benefytt assisted and facilitated the fraudulent offerings of one of their largest distributors, Simple Health Plans. Benefytt allegedly knew of the prevalent compliance issues with Simple Health’s sales practices, and failed to terminate the distributor until FTC sued Simple Health in October 2018.
Benefytt and two of its subsidiaries have agreed to a proposed court order that will require them to: pay $100 million for consumer redress, inform current customers and allow them to cancel, sell all products without misleading consumers, and closely monitor other companies who sell their products.
From an FTC press release: “Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The company is being ordered to pay $100 million, and we’re holding its executives accountable for this fraud.”
Scams such as these are obviously dangerous and take advantage of consumers looking for comprehensive coverage. Payers should be aware of these events and do their best to educate their consumers of the dangers of online health insurance scams, as well as how to spot and avoid them.
The FTC offers a resource on their website to help consumers spot and avoid health insurance scams.
These two new smartphone apps may have a big impact on pediatric care.
New tech, including AI, has sailed its way from the conception phase, to implementation. So far this year two new smartphone apps are paving the way for small scale solutions that can have a big impact.
The first comes from the University of Pittsburgh where clinicians have developed an AI algorithm that can identify acute otitis media (AOM), one of the most common childhood infections.
Roughly 70% of children develop an ear infection before their first birthday. These infections are difficult to spot and distinguish from other types of infections that do not require antibiotics. But with this new smartphone AI tool, clinicians can more easily analyze a patient’s eardrum through an otoscope connected to a camera. The tool proved to have a 93% success rate at identifying AOM, versus expert physicians success rate at around 30% - 48%.
With implementation of this new tool, clinicians will no longer have to struggle to look in the ear of a wiggly infant to determine if they have an ear infection.
The second is an app developed by Intermountain Health that would help detect jaundice in newborns. Approximately three out of every five babies in the US develop jaundice within days after birth, which could lead to serious health concerns if not treated.
Intermountain Health partnered with a Norwegian digital health company called Picterus AS to create the app that uses a smartphone camera and a laminated card to measure bilirubin levels in newborns, allowing for a diagnosis without returning to the hospital for a blood test.
This new tech would allow parents to test their babies at home and alert care teams if jaundice is detected.
These two new smartphone apps may have a big impact on pediatric care.
New tech, including AI, has sailed its way from the conception phase, to implementation. So far this year two new smartphone apps are paving the way for small scale solutions that can have a big impact.
The first comes from the University of Pittsburgh where clinicians have developed an AI algorithm that can identify acute otitis media (AOM), one of the most common childhood infections.
Roughly 70% of children develop an ear infection before their first birthday. These infections are difficult to spot and distinguish from other types of infections that do not require antibiotics. But with this new smartphone AI tool, clinicians can more easily analyze a patient’s eardrum through an otoscope connected to a camera. The tool proved to have a 93% success rate at identifying AOM, versus expert physicians success rate at around 30% - 48%.
With implementation of this new tool, clinicians will no longer have to struggle to look in the ear of a wiggly infant to determine if they have an ear infection.
The second is an app developed by Intermountain Health that would help detect jaundice in newborns. Approximately three out of every five babies in the US develop jaundice within days after birth, which could lead to serious health concerns if not treated.
Intermountain Health partnered with a Norwegian digital health company called Picterus AS to create the app that uses a smartphone camera and a laminated card to measure bilirubin levels in newborns, allowing for a diagnosis without returning to the hospital for a blood test.
This new tech would allow parents to test their babies at home and alert care teams if jaundice is detected.
Britt Berrett dives into solutions for reducing expenses for health systems as payers and providers move towards contract negotiations.
Payers and providers must come to terms at the negotiating table, and reducing expenses is an item that directly benefits both parties.
HealthLeaders spoke with Britt Berett, Managing Director and Teaching Professor at Brigham Young University, to hear his insights on what solutions payers and providers must work towards, and the options they will need to explore in order to reduce expenses this year.
Some states are hesitant to cover the popular drugs.
Weight loss drugs have soared in popularity; while some states have been hesitant to cover them, others have not. A recent JAMA study found that five states offer unrestricted coverage of GLP-1 drugs Wegovy and Saxenda that were approved for weight loss.
The data from this study comes from formularies for 47 state Medicaid programs from the first quarter of 2023.
The study found that a total of ten states cover Saxenda or Wegovy for weight loss, while five of those states offered restricted access through barriers like prior authorization, non-prefered status, or step therapy.
Some GLP-1 drugs approved for coverage to treat diabetes such as Ozempic, Victoza or Trulicity, are covered in 39 states.
Some states are hesitant to cover these popular drugs because of the hefty $15,000 price tag that accompanies them.
As 2023 these five states offer unrestricted coverage to Wegovy and Saxenda under Medicaid:
California
Delaware
Minnesota
Rhode Island
Virginia
These five states offer restricted coverage of Wegovy and Saxenda:
A new report shows strong potential for the Medicare Advantage market.
There are a number of items shaking up the Medicare Advantage space lately, from steeper star ratings to broker constraints. However, a new report has an optimistic outlook for MA, even as growth begins to slow down.
Findings in a recent report by Chartis show that Medicare Advantage growth seems to be slowing, despite enrollment gains. In 2023 MA grew by about 5%, or 1.7 million new members, slower than the year before which was at around 9%, or 2.7 million members. The rise comes from a growing senior population, yet has been overshadowed by factors like regulatory pressures, decreased star ratings, and soaring medical costs.
A majority (86%) of the market’s growth in the past year has come from for-profit insurers like Humana, Aetna and UnitedHealth. Collectively, these three giants captured 1.4 million new beneficiaries. This enrollment growth follows a big MA milestone of over 50% of Medicare-eligible persons enrolling in an MA plan.
According to the Chartis survey that looked at 19 insurers, even with a decrease in growth, almost 80% of health plan executives were optimistic about the next five years, and they are expecting neutral or positive outcomes. Roughly 84% also anticipate membership growth that is equal to or greater than this year, showing payer confidence in the stability and overall growth potential of the Medicare Advantage market.
Ratings
Medicare Advantage has wrestled with many different opponents, such as new methods of calculating star ratings. During the pandemic when relief provisions were high, MA ratings shot up. As regulators noticed this and pulled back on them, they started new methods of calculating ratings, which then fell for many insurers. Elevance even went through a lawsuit with HHS over their low ratings and managed to come out with new ratings and a hefty payout. Quality of plans remains a concern as plans struggle to maintain high quality ratings, with roughly one-quarter of beneficiaries enrolled in a plan with less than four stars, according to the report.
Special Needs Plans and Social Vulnerability
Special needs plans are also gaining more traction in the Medicare space. The Chartis report looked at SNPs which have recently surged, with an addition of over 1M new members. Almost 7 out of every 10 MA enrollees opted for SNPs.
The report also dug into another not-so-obvious factor, the relationship between MA enrollment and social vulnerability. It found the counties with higher vulnerability scores showed greater penetration rates, about 53%, when compared to counties with lower scores, about 45%. These statistics show how market dynamics are playing into the greater picture of MA.
Nick Herro is the Chartis Director in Strategic Transformation and co-author of the report. He says that although the MA market has matured a great deal over the last several years, demand continues mainly due to changing demographics and consumer preference over traditional Medicare.
"We are confident demand for Medicare Advantage will hold steady,” Herro said in a press release. “While plan executives acknowledge the headwinds facing the industry, the majority express optimism about the next five years."
Taking all of these factors into consideration, the Medicare Advantage market could gain even more traction and attention from payers as outlook reports seem promising. However, maintaining high quality ratings and keeping up with the demand and shifting market dynamics could outweigh the promise of stability and growth potential of the market.
U.S. officials are putting the pressure on payers to take more targeted action.
This week payers met with federal officials to discuss how they can advance timely payments to providers who are still struggling after the massive cyberattack on Change Healthcare.
Payers were asked to prepare details on how they plan to financially support providers, how they are working to meet the challenges, and recovery efforts that still need to be made.
Payers are concerned about how their money will be recuperated in the future, according to a report from Bloomberg.
HHS has urged payers since the beginning of the attack to help providers by removing or relaxing prior authorizations, but the pushback has been strong. AHIP President and CEO Mike Tuffin issued a statement on March 12 about insurers responding to the attack.
Since the impact varies across their system, United urged individual plans and providers to sort out payments in a timely manner, as they’re in the best position to do so.
“Further, broad exemptions in prior authorization at a time of advanced payments could expose patients and employers to fraud, waste and unnecessary costs,” said Tuffin.
In a press release, the organization announced it will be launching software for preparation of medical claims and announced that it has advanced $2B to providers who are still struggling after the attack. The software will be made available to thousands of customers over the next several days and it expects to have third-party attestations available before these services become operational. After this initial phase, other restoration services will continue until all its customers have been connected.
UnitedHealth has also been reported as offering substantial loans to some providers after the cyberattack. Stat News reported that this change comes as hospitals, doctors and lobbying groups have complained for weeks about United’s low offers, some less than 1% of their regular weekly billing. Now, some providers have seen their advances increase up to seven figures, but we’re not sure why or what prompted these specific loans.
But What About The Other Payers?
UnitedHealth seems to be making headway on helping their providers, but what about other payers? During the March 18 meeting, several payers said they would commit to advancing payments to providers, but these payers were not named.
According to Reuters an unidentified U.S. official said, "Claims are starting to flow and we have seen significant improvement between last week and this week, but we have a last mile to go.”
In a press release HHS said that it surveyed payers in their previous meeting to obtain data and information that showed the actions they are taking to resolve issues from the cyberattack. HHS reviewed the responses over the weekend of March 15. Payers then offered HHS updates on their resolution efforts towards providers and outlined specific actions they plan to take.
“HHS and White House leadership pressed insurers to be targeted and specific in carrying out solutions, including increasing advanced payments where needed to the providers and communities still most in need,” HHS said in the press release.
As health systems slowly begin to get back on track with payments and regular operations, it’s clear that payers have been slow to act in this crisis and give aid to their providers and patients. As payers look for a balance between advancing payments without advancing fraud in this difficult situation, some providers are still struggling to keep their systems operational without the cash flow.
The Change Healthcare ransomware attack has affected health systems nation-wide for almost a month now.
The attack on Change Healthcare spread far and wide to hospitals, pharmacies, and health systems across the country. Here’s a timeline of what has happened so far that you should know:
Here's a full breakdown:
Feb. 21: Optum reports “enterprise-wide connectivity” issues and later says Change Healthcare was experiencing a network disruption caused by a cybersecurity threat. Change’s system was disconnected.
Feb. 22: Health systems and pharmacies reported disruptions from the attack and the AHA urges facilities to disconnect from Optum’s network.
Feb. 26: Ransomware group BlackCat claims responsibility for the attack, reported by The Register. HHS later warns hospitals to be wary of the cyber group as it specifically looks to target hospitals.
UnitedHealth reports that 90% of the 70,000+ pharmacies in the U.S. that used Change’s network had to modify claims processing, the other 10% implemented offline workarounds.
Feb. 29: Change Healthcare confirms Blackcat is behind the attack. Change works with cybersecurity firms and law enforcement to address the attack.
March 1: Optum introduces a temporary funding assistance program for providers, and Change also implements a workaround system for pharamcies.
A McKinsey & Company report zooms in on the five trends set to shape Medicare Advantage.
Medicare Advantage has seen a lot of turbulence over the last six months. With high utilization and government intervention, among other factors, Medicare Advantage may not be as profitable for payers as it used to be.
Let’s look at the five main factors that are molding Medicare Advantage from an analysis from McKinsey & Company.
Product Reset: Medical costs are rising and payers are feeling the heat. As this continues payers may become more choosy about how many plans and benefits they offer. Regulators are also reconsidering the value of supplemental benefits for consumers. These factors may push payers to create more customized plans that offer a “concise narrative” and don’t try to cater to everyone by casting a wide net.
Aging Population: Some of the biggest upticks in medical costs that payers are seeing are procedures used by the aging population, particularly knee and hip replacements. Between this and the ongoing healthcare worker shortage, new care models will have to come into play. McKinsey analysts pose the question of vertical integration for payers as they see an influx of patients with higher needs.
Star Ratings: As CMS toughens the threshold for higher star ratings, payers will need to shift their focus to higher quality outcomes as beneficiary satisfaction ratings become deemphasized.
Opportunities In Special Needs Plans: Special needs plans, especially dual-eligible special needs plans are growth opportunities. However, payers will need to make strategic moves to prep for new contracting strategies from states for D-SNPs.
Broker Constraints: With increased regulation around third-party marketing and broker organizations, McKinsey analysts suggest that payers may need to upgrade their own marketing and sales endeavors.
President Biden has pushed out his budget for 2025, focusing on healthcare and cybersecurity.
As President Biden rolled out his $7.3T budget for 2025, a couple items caught our eye. Politicians usually use their budgets as a tool to direct their messaging towards voters, and President Biden has put healthcare front and center.
Compared with other budgets, this one puts heavy focus on healthcare and cybersecurity. In Biden’s budget he calls for expanding Medicare’s drug negotiation program as well as extending Medicare insulin caps and out-of-pocket costs to consumers with private plans. Both of these measures were seen in his 2022 Inflation Reduction Act passed by Congress.
Medicaid
The budget also renews Biden’s call to implement a federal coverage alternative for low-income individuals in states that have yet to expand Medicaid coverage under the ACA; only ten states have not adopted Medicaid expansion. The budget outlines a decade long $150B increase for Medicaid home and community based services. Biden also tried a major expansion like this in 2020, but it was dismissed by Congress.
This concept of nudging Medicaid expansion even further comes at a time when a handful of states have also extended coverage to immigrants. California and Oregon have already begun funding full Medicaid benefits for all low-income residents who wouldn’t be eligible for the program because of immigration status. Many undocumented individuals live just above the Medicaid income-eligibility threshold, and until recently, no states had looked at the affordability of complete coverage for them.
Biden’s budget also incentives for states to continue their Medicaid expansion and would permanently expand the ACA tax credits that are set to expire at the end of next year.
Biden made a similar call for “Medicaid-like” coverage in his proposed 2024 budget, which didn’t see through in Congress. His 2025 budget is predominantly similar to last year’s.
Notably, the budget also emphasizes healthcare cybersecurity, which everyone currently affected by the Change Healthcare attack should keep an eye on. Here the budget outlines $1.3B in new hospital cybersecurity initiatives and $141M to cushion the federal health department’s systems.
What This Means For Payers
As providers suffer from unprocessed claims payments and payers are being pressured to output advanced payments and relax prior authorizations, payers should pay close attention to cybersecurity budgets and initiatives. Payers have been reluctant to cooperate with these items, particularly the relaxing or removing of prior authorizations, which they claim could lead to increased fraud. While increased cybersecurity would help every organization, it could be especially beneficial to payers to not only protect their providers and health systems, but to avoid fraud and keep their bottom line steady.
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