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DOJ sues UnitedHealth over Amedisys deal + more · Becker’s Payer Issues Podcast

• 0:00
  This is Jacob Emerson with the Becker's Payer
• 0:02
  Issues podcast.
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  Here is your biweekly industry news briefing for
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  November 18th.
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  The US Justice Department is suing UnitedHealth Group
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  and home health company Amedisys over the company's
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  planned $3,300,000,000
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  merger.
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  The lawsuit was filed in a Maryland federal
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  court on November 12 and comes over concerns
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  of lessened competition in the home health market
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  because the 2 companies are direct competitors
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  per the DOJ.
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  UnitedHealth representatives have met with the government in
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  recent weeks to make the case for the
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  acquisition.
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  The lawsuit claims that the purchase could increase
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  home health care prices across 23 states and
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  in Washington DC. The attorneys general of Maryland,
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  Illinois, New Jersey, and New York have also
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  joined the complaint.
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  UnitedHealth's Optum first announced its plans to merge
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  with Amedisys in June of 2023.
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  The company is based in Baton Rouge, Louisiana.
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  It was founded in 1982, and it provides
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  home health, hospice, and high acuity care services
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  across more than 500 care centers in 37
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  states and DC.
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  The proposed merger has been under an antitrust
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  review by the DOJ since August of last
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  year. This March, Oregon regulators opened their own
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  review after a preliminary report in the state
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  found that the deal could hurt competition in
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  Oregon's home health markets.
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  Amedisys shareholders approved the acquisition internally in September
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  of last year.
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  UnitedHealth has rapidly grown its home care capabilities
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  in recent years. Last year, the company closed
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  on a $5,400,000,000
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  acquisition of home health firm LHC Group, which
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  operates more than 900 facilities nationwide.
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  If the company's acquisition of Amedisys is approved,
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  then UnitedHealth would own around 10% of the
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  home health market with significant overlap in some
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  southern states. Also, this June, Nemetasys and UnitedHealth
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  agreed to sell an unknown number of care
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  centers to Vital Caring Group to make the
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  deal more palatable to regulators.
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  Well, Centene's president, Ken Fasola, plans to retire
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  in July of 2025.
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  He will end his duties as president by
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  the end of this year and transition
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  to a strategic adviser role for the first
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  half of next year. He was previously the
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  CEO of Magellan Health, which was acquired by
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  Centene in 2022.
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  The company named him president in
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  December of 2022.
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  Well, CMS will give less weight to call
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  center metrics in future Medicare Advantage star ratings.
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  Speaking at the Milken Institute Future of Health
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  Summit on November
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  13th, doctor Meena Shashami,
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  an a deputy CMS administrator and director of
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  the Center For Medicare,
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  said that the agency will wait call centers.
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  His direct quote was we have already put
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  in place that call centers will have a
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  smaller weighting on star ratings moving forward. It
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  takes time for these things to work their
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  way through because of constantly looking at the
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  methodology.
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  According to CMS documents, for plan year 2026,
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  the agency will decrease the weighting of measures
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  capturing access, including call center availability.
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  The agency will add 3 new patient care
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  measures to its weightings.
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  The comments from CMS come after several major
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  insurers have sued the agency to dispute their
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  star ratings for 2025.
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  Some insurers
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  won lawsuits over that issue last year. Centene
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  and UnitedHealthcare
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  have disputed the inclusion of secret shopper phone
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  calls that they say hurt their star ratings.
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  Well, payer executives have expressed confidence in the
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  continuation
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  of enhanced subsidies in some form past 2025.
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  Enhanced subsidies, which help individuals with incomes up
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  to 400% above the federal poverty line afford
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  ACA coverage, will expire at the end of
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  2025 without congressional action.
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  Subsidies have spurred record enrollment in 20 ACA
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  plans.
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  Republicans will control the presidency and both chambers
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  of congress in 2025
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  and that and they could let the enhanced
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  subsidies a sunset.
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  But on earlier this month in November,
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  executives
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  such as Oscar Health CEO, Mark Bertolini, said
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  that his company believes both parties have an
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  incentive to extend the subsidies. He said we're
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  currently at a historic low in the US
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  of below 8% of uninsured.
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  Going the other way would only confound the
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  inflationary impacts that the current race focused around
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  and resulted in the former president Trump being
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  reelected.
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  He also said that there will be likely
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  some changes to subsidies under a Republican administration.
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  More than 60% of Oscar's membership is in
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  Republican led state, he said, indicating the durability
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  of the program across party lines. He said
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  this is a product that's here to stay,
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  and there is every intention to make sure
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  that we don't create an inflationary pressure as
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  a result of pulling back subsidies and pushing
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  people out of health care and into uncompensated
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  care.
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  Last month, in October, Centene's CEO, Sarah London,
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  said the ACA marketplace serves as a strong
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  bipartisan base and is a powerful platform to
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  expand affordable health care coverage and access to
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  individuals
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  across the country.
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  Payer executives have also said they remain committed
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  to the marketplace whether subsidies are extended or
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  not.
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  Well, Blue Cross and Blue Shield of Massachusetts
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  has reported a $114,000,000
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  operating loss in the 1st 9 months of
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  the year partly due to skyrocketing claims for
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  GLP 1 medications.
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  The company's after tax 3rd quarter net income
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  of $29,200,000,
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  that was on revenue of $2,400,000,000,
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  again, in the Q3.
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  Year to date, the company has reported a
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  net income of $27,100,000
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  on revenue of 7,200,000,000.
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  The company's operating loss in the Q3 was
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  $19,800,000.
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  Compared to a year ago, q three operating
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  income is down a $145,000,000,
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  and net income is down a 135,000,000.
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  2000 members are starting GLP 1 medications with
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  the insurer every month, and spending on that
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  drug class has risen by 250%
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  since last year, putting the company on track
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  to spend nearly $200,000,000
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  on the medications
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  in 2024.
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  And finally, WPS Health Solutions is laying off
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  313
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  employees in Wisconsin due to competitive industry pressures
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  and federal contract losses. The layoffs will begin
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  to take place in Monona and Madison, Wisconsin
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  on January 21st next year according to regulatory
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  documents the insurer filed with the state.
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  WPS is based in Madison, and it has
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  around 4,000 total employees.
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  If you'd like the latest health insurance industry
• 6:22
  news delivered straight to your inbox every morning,
• 6:24
  subscribe to the Becker's payer issues enewsletter
• 6:27
  on our website at beckerspayer.com.