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Tag: Aetna

  • CVS profits from manufacturing its own generic drugs

    CVS profits from manufacturing its own generic drugs

    CVS has become the sixth largest corporation in America, owning not only a chain of pharmacies, but health insurance company Aetna, and Pharmacy Benefit Manager (PBM), Caremark, among other big businesses. To maximize profits, CVS offers many private label products. To increase those profits further, CVS has begun to sell its own prescription drugs, reports David Wainer for the Wall Street Journal.

    Bottom line, CVS believes that selling its own biosimilars will generate handsome profits. CVS can steer its customers to these generic drugs through its Pharmacy Benefit Manager or PBM, which determines the drugs on many insurance companies’ formularies, including Aetna’s. In the process, CVS can put competitor manufacturers with lower-cost biosimilars out of business.

    The Cordavis unit of CVS Health – lord knows how CVS came up with the name—works with drug manufacturers to create the biosimilars CVS sells. Biosimilars are the generic version of biologicals, prescription drugs made from living cells. The biosimilar market is booming as more blockbuster biologicals, such as Humira, lose their patents.

    Beginning shortly, Humira will no longer be available on CVS formularies. CVS will offer its biosimilar. Similarly, Cigna, which has its own PBM, Express Scripts, will take Humira off its formulary and instead offer its private label biosimilar. For now, the cost will be low for patients, 85 percent lower than Humira’s list price, with no out-of-pocket costs to patients.

    CVS projects that the biosimilar market will grow exponentially in the next five years to $100 million. It was not even $10 million just two years ago. CVS will steer its customers away from brand-name biologicals to its biosimilars and profit big time in the process. Over time, will patients save money and how much? That’s largely up to CVS, an untenable truth.

    The bigger question is how will patients fare as biologicals are replaced by biosimilars? It’s not at all clear; at least for now, it is out of government hands. PBMs, such as CVS Caremark, can and will use their power to determine which drugs people use and at what cost in order to maximize their profits. Before long, some say it’s likely that there will be no prescription drug price competition, only strategies among the PBMs and insurers to maximize profits.

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  • What happens when Medicare Advantage overpayments end?

    What happens when Medicare Advantage overpayments end?

    Tens of billions of dollars a year in Medicare Advantage overpayments are taking a huge toll on the Medicare Trust Fund and driving up Medicare Part B premiums. They also are not deterring Medicare Advantage plans from inappropriately delaying and denying care and coverage. So, what happens when the administration or Congress ends these overpayments?

    Becker’s Payer Issues reports that Aetna Medicare Advantage plans are losing as much as $2 billion in 2024, in part because many fewer of them will receive a four-star rating or better. As it is, the stars are a joke and do not reflect, for example, whether a Medicare Advantage plan engages in widespread inappropriate delays and denials of care. But, a four or five-star rating means real money to the Medicare Advantage plans. Without that money, these Medicare Advantage plans might look for other ways to maximize profits. Will inappropriate delays and denials increase? Will the quality of the provider networks suffer?

    CVS Health owns Aetna. It is losing money because of the reduction in number of its four and five-star Medicare Advantage plans. It is also losing money because of a contract it lost with Centene, a Medicare Advantage plan. CVS Health has been providing pharmacy benefits to Centene Medicare Advantage members.

    Here, you should take note: If you are in a Medicare Advantage plan and get prescription drug coverage, don’t assume you are getting the lowest price. Always check for other ways to get your drugs that could possibly save you more money, such as through Costco mail-order or CostPlus Pharmacy. The full cost of the drug without insurance could be less than your Medicare Part D copay.

    CVS Health continues to invest heavily in getting more Medicare Advantage enrollees. The flawed Medicare payment system pays their Medicare Advantage plans more when their enrollees have more diagnosis codes, even when they do not cost their Medicare Advantage plans more to treat.

    Today, CVS Health has 3.4 million Medicare Advantage members. And, it expects a 12 percent increase next year. UnitedHealth and Humana are the two insurers with the highest Medicare Advantage enrollment.

    CVS Health recently purchased Oak Street Health, a primary care provider group, which will help ensure that they have more control over the diagnosis codes providers give to their patients. CVS Health also says it will enable them to improve their star ratings.

    [This post has been edited to correct a factual error regarding the relationship between Centene and CVS Health.]

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  • Corporate health insurers profit by condoning fraud

    Corporate health insurers profit by condoning fraud

    Here’s another reason to support Medicare for All, a single public health insurance system, as well as to beware of Medicare Advantage plans, corporate health plans that contract with the federal government to offer Medicare benefits. A Pro Publica investigation by Marshall Allen reveals that corporate health insurers profit by condoning health care fraud, undermining the health and financial well-being of their members.

    It’s projected that we could bring health care costs down by as much as 10 percent if we could eliminate health care  fraud. It would mean a savings of as much as $120 billion a year in private health insurance spending, not chump change.

    Pro Publica found that one personal trainer in Texas, who was not a medical doctor, billed four big health insurers for his completely fabricated “services” and received $4 million. He billed the insurers as an out-of-network provider.

    The US Department of Justice files thousands of criminal and civil fraud cases each year. But, private health insurers rarely file fraud cases even though they have the data to identify scammers.

    Aetna, Cigna and UnitedHealthcare would not permit Allen to speak with the people on their staff who investigate fraud, most likely because they do so little to combat it on behalf of their members. During 2017 and 2018, in California, which has 14.4 million people with commercial health insurance, private insurers referred just 22 criminal cases to prosecutors. And, the insurers brought just one civil lawsuit over fraud. In stark contrast, in that same time period, California Medicaid, which covers 13 million Californians, filed criminal charges against 321 medical providers and recovered $93 million.

    UnitedHealth provided Pro Publica with a list of just four lawsuits it had brought, where it had won tens of millions of dollars. That’s a pittance given that it had $226 billion in revenue in 2018 alone. What’s more, UnitedHealth and other corporate health insurers do not appear to be willing to provide assistance–not even basic information–as to the frequency with which their patients are treated at a site–to government fraud investigators.  A fraud prosecutor in Los Angeles told Allen that “It suggests we are not on the same page in terms of enforcement and protecting the integrity of the system.”

    Minnesota law requires corporate insurers to refer all cases where there is a “reasonable belief” of fraud. Yet, in 2017, a fraud prosecutor received just two referrals and, in 2018, he received five.The state’s Medicaid unit investigated nearly 600 incidents of fraud and issued 134 indictments. Interestingly, auto insurers made well over 1,000 referrals to the state’s fraud bureau.

    The state fraud reporting law seems to work no differently in the 35 other states that have it. In Georgia, only three of the ten biggest health insurers reported any fraud. Arizona received just 32 referrals in one year.

    The fraud reporting law applies to fully insured health plans, ones where the insurers bear the risk and pay all the bills. It does not apply to self-funded plans, where employers pay the bills with the help of an insurance company administrator. The Department of Labor regulates these plans. Unfortunately, fraud is not one of its priorities.

    Some believe that insurers don’t want to take the time and expend the resources necessary for a fraud investigation. Moreover, going after health care fraud could undermine their network adequacy. If the only specialist in the network is providing poor unnecessary care, the insurer cannot risk losing the specialist. Corporate health insurers might also worry that fraud investigations could have reputational risks for them. What if the prosecutor found the insurer was at fault? Former insurer fraud investigators confirm that insurers don’t want to root out fraud because it hurts their profits.

    The takeaway: Don’t count on commercial health insurers to ensure the integrity of our health care system.

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  • Insurers donate to Democrats in attempt to undermine support for Medicare for all

    Insurers donate to Democrats in attempt to undermine support for Medicare for all

    Tarbell reports that commercial health insurers are supporting Democrats with larger campaign contributions as a way to undermine their support for a government-administered Medicare for all health care system that does away with commercial insurance.

    An increasing number of people are supporting Medicare for all, which would do away with for-profit insurance in the US. The latest Kaiser/Washington Post poll shows that a little more than fifty percent of Americans (51 percent) support government-administered Medicare for all. Only 43 percent of Americans are against it. And, many members of Congress are following the public’s lead.

    To cover their bases and protect their industry, the five largest for-profit health insurers—Aetna, Anthem, Humana, Cigna and UnitedHealth—are using their political action committees to support members of Congress on both sides of the political aisle. They have given more than $1.6 million to House campaigns alone. One member of Congress, Joseph Crowley, whom the insurers believed would be their ally, lost his primary race to Alexandria Ocasio-Cortez, who supports Medicare for all.

    Other House Democrats who are recipients of the health insurers’ financial support are Cheri Bustos of Illinois, Jim Hines of Connecticut, Ron Kind of Wisconsin, Ann McLane Kuster of New Hampshire, John Larson of Connecticut and Richard Neal of Massachusetts.

    The health insurers would likely be very happy with Medicare Advantage for all, doing away with government-administered traditional Medicare. Of course, what they and their allies do not explain and what the public needs to understand is that Medicare Advantage would look very different if it were not competing with traditional Medicare. Costs would skyrocket; today, traditional Medicare holds doctor and hospital costs down for the Medicare Advantage plans. And, Medicare Advantage networks would shrink; today, Medicare Advantage plans need rich networks in order to compete with traditional Medicare. Moreover, Congress would have the ability to cut payments to Medicare Advantage plans and shift more costs to older Americans and people with disabilities with Medicare.

    The health insurers are giving considerable support to the New Democrat Coalition, a pro-business, more centrist body of 68 House members than the Congressional Progressive Caucus, with 76 members.

    If you support Medicare for all, please let Congress know. Sign this petition.

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  • CVS Caremark accused of $1 billion in Medicare drug fraud

    CVS Caremark accused of $1 billion in Medicare drug fraud

    Pharmacy benefits managers (PBMs)–middlemen who determine the list of approved drugs for health insurers and pay pharmacy claims– argue that they drive down drug prices. But, they also can drive drug prices up in a host of ways. StatNews reports on a whistleblower lawsuit that charges CVS Caremark, a pharmacy benefit manager, of reporting higher than actual generic drug prices to the federal government, defrauding taxpayers, Medicare and older adults and people with disabilities.

    According to the Aetna actuary who filed the lawsuit, CVS Caremark overcharged people with Medicare enrolled in a Part D drug plan and the federal government for generic prescription drugs. Put differently, the price CVS Caremark paid pharmacies for generic drugs allegedly was less than it charged Aetna’s Medicare Part D plans. CVS Caremark pocketed the overpayments.

    CVS Health claims the allegations of fraud are “without merit,” but, the whistleblower in this lawsuit discovered that people with Medicare in other Part D plans were paying less for generics than CVS Caremark was charging Aetna Part D plan members. Why would CVS Caremark not have been able to achieve the same low generic prices for Aetna’s Part D plan members as other Part D plans were able to get for their members? And, CVS Caremark charged Aetna Part D plan members significantly more–25 to 40 percent more.

    CVS is currently in the process of buying Aetna. Had it owned Aetna at the time the lawsuit was filed, in 2014, Aetna’s actuary likely would have had no reason to look into the price discrepancy between what its members paid for generics and what other Part D plan members paid. Aetna would have benefited from the overcharges.

    If Congress stepped in and allowed the federal government to negotiate prescription drug prices for everyone–effectively to set drug prices no higher than the average price of the seven wealthiest countries in the world–not only would it bring down drug prices for everyone by nearly 60 percent, but these types of taxpayer and consumer fraud would not be possible.

    If you want Congress to rein in drug prices, please sign this petition. 

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  • Aetna under investigation for denying care without appropriate review of medical records

    Aetna under investigation for denying care without appropriate review of medical records

    Several states are investigating Aetna, the nation’s third largest health insurance company, for denying care without appropriate review of medical records. CNN reports that a former Aetna medical director testified under oath that he never looked at patients’ medical records when determining whether to approve or deny a claim. The former medical director’s testimony speaks volumes about the failings of our commercial health insurance system.

    In the case of a California patient needing treatment for a rare immune disorder, Aetna’s former medical director testified in a deposition that he relied exclusively on nurses’ notes to decide not to approve medical care. The patient is suing Aetna for breach of contract and bad faith.

    Aetna has pushed back, claiming that its former medical director did review parts of the patient’s medical records and that his testimony was taken out of context. But, the former medical director failed to even acknowledge the value of having a medical doctor review medical records before deciding whether to deny what could be a life-saving treatment. Moreover, what is perhaps most troubling in this case, is that Aetna’s protocols appear not to require its medical director to have training on a particular condition or to speak to a specialist with training on that condition before deciding whether to deny coverage.

    The former medical director testified that he knew almost nothing about the patient’s condition and how he might be affected if he were denied coverage for his treatment. The former medical director was clearly not equipped to make a determination on treatment even had he reviewed the patient’s medical records.

    California’s insurance commissioner, on seeing Aetna’s former medical director’s deposition testimony, said that Aetna may have violated the law. In certain instances, he said, Aetna’s medical director should be reviewing patients’ medical records, not nurses.  It is not clear where the California insurance commissioner stands on the propriety of a medical director making a coverage determination about a life-saving treatment for a condition about which he knows little, without first seeking advice from a specialist with expertise on the condition.

    The California Department of Insurance is investigating Aetna.  Colorado, Washington and Connecticut are also investigating Aetna’s medical review practices.

    Aetna has more than 23 million subscribers and is in the midst of being acquired by CVS.

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  • CVS plans to buy Aetna: Will consumers pay more?

    CVS plans to buy Aetna: Will consumers pay more?

    CVS Health, a chain of retail pharmacies, plans to buy Aetna for $69 billion in an effort to compete against Amazon in the health care space. CVS further plans to build a network of medical clinics providing a range of primary care health care services inside its pharmacies.

    According to NPR, with the purchase of Aetna, CVS wants to transform itself from a pharmacy chain to a health care company. Today, CVS provides drug benefits to 90 million people in the US, and it has MinuteClinics in 1,100 CVS and Target stores. As it expands further into providing health care, CVS pharmacists and nurse practitioners will assist people with diabetes, high blood pressure and asthma at these clinics and monitor them remotely in some instances.

    CVS hopes that people will be attracted to these health hubs because of their convenience. Without a doubt, it looks forward to greater profits as a result of the merger. As a general rule, these large mergers of health care companies give them more market power, reduce competition and drive up health care costs, with little if any public benefit.

    As CVS builds its market share, experts believe it will have more power to increase prices with little fear of losing business. Aetna can create incentives for its members to use CVS pharmacies and clinics. Patients who choose not to use the CVS clinics could be left paying more for medical care at the doctor’s office.

    CVS’ ownership of Caremark, a pharmacy benefit manager (PBM), is likely already driving up your drug costs. Caremark gets rebates from pharmaceutical companies to put their drugs on insurers’ formularies. They are not required to disclose the amount of these rebates. They are pocketing a lot of this money rather than passing along the lower prices to patients needing prescriptions. And, in some cases, PBMs are responsible for copays on your drugs that are higher than the drugs’ price if you bought them without your insurance. It’s no wonder that, to save money, millions of people are buying drugs online from certified international pharmacies through Pharmacy Checker, or buying their drugs while they are abroad.

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  • Aetna, for-profit insurers do not serve public good

    Aetna, for-profit insurers do not serve public good

    The U.S. Department of Justice is trying to block Aetna’s merger with Humana. And, Aetna, along with other for-profit insurers, are pulling out of most of the Obamacare state exchanges, claiming that they are losing too much money. We must recognize and address the reality that for-profit insurers are not in the business of serving the public good.

    Let’s be clear. Obamacare has served the for-profit insurers extraordinarily well. Aetna alone has made nearly $7 billion in profits since the launch of Obamacare in 2014, and its stock price has soared. Aetna’s stock price is more than six times higher than it was when debate began over the Affordable Care Act in 2009.

    Aetna’s contention that it’s not viable for it to continue offering coverage in the exchanges, that they are getting too many enrollees with high health care costs, rings hollow. The non-profit insurers, such as Kaiser and Blue Cross, are managing to balance risk in the state health exchanges.

    It is indeed true that the majority of people enrolling in the state exchanges are poor and in poor health and that there are not as many young, healthy people to enroll as the insurance industry would like in order to balance risk. But, it is also true that for-profit insurers feel obligated to exceed Wall Street’s expectations every quarter in order to drive up their stock prices. Any business unit that is not doing well jeopardizes their ability to do so. That motivates Aetna’s CEO to close down its line of business in the state health insurance exchanges.

    What’s disturbing and makes the case for a public health insurance option in the state exchanges is that Aetna has no obligation to the public, no obligation to continue serving sicker poorer people in the state exchanges, even when its operating earnings are growing and the federal government’s Medicare and Medicaid programs are major growth areas. Indeed, its thanks to Obamacare that Aetna has so many more Medicaid enrollees.

    The non-profit insurers are remaining in the state exchanges because they can take a long-term view. They do not need to please Wall Street every quarter. But, they alone cannot meet the needs of people in the state exchanges. In order to give people the choice of a health plan they can rely on, we need a public health insurance option like Medicare or an expansion of Medicare for people under 65.

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