Regulatory roundup: BLUE KC plans to exit MA market in 2025; OIG reports it expects to recoup $3B in misspent Medicare and Medicaid funds; and more

BLUE KC plans to exit MA market in 2025

Blue Cross and Blue Shield of Kansas City (Blue KC) announced plans to exit the Medicare Advantage (MA) market at the end of 2024 due to heightened regulatory demands and rising market and financial pressures.

The not-for-profit organization, which insures roughly one million individuals across the Kansas City region, said it will focus on its employer-sponsored health plans, Medicare Supplement offerings, and a range of individual and family plans for those under 65, including Affordable Care Act (ACA) plans.

While Blue KC is the largest not-for-profit health insurer in Missouri, the organization said its relatively small MA membership of 30,000 individuals does not provide the scale required to successfully compete in today’s complex and continuously changing market. Blue KC’s decision to exit MA will allow the company to accelerate innovation in other market segments so it can continue to deliver affordable, high-quality health care coverage to its commercial employer groups and individual members, including ACA and Medicare Supplement plans.

“We explored every alternative path for our Medicare Advantage members and are disappointed we must exit this line of business,” said Erin Stucky, Blue KC president and CEO, in the announcement. “We value our MA members and are committed to providing uninterrupted, quality service to our current Medicare Advantage membership through the end of 2024.”

OIG reports $3B in expected recoveries

A new Department of Health and Human Services (HHS) Office of Inspector General (OIG) report reveals that its work may recoup billions of dollars in misspent Medicare, Medicaid, and other health and human services funds.

The Spring 2024 Semiannual Report to Congress(SAR) highlights over $2.76 billion in expected recoveries resulting from HHS-OIG audits and investigations conducted during reporting period of October 1, 2023, through March 31, 2024. The watchdog reported 712 criminal and civil enforcement actions against individuals and entities suspected of engaging in crimes targeting HHS programs and the people they serve, including false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalty settlements, and administrative recoveries related to provider self-disclosure matters. It also excluded 1,795 individuals and entities from participation in federal health care programs.

The report highlights work that found that fewer than one in five Medicare enrollees with opioid use disorder received medication to treat their disorder; states face ongoing challenges in meeting third-party liability requirements for ensuring that Medicaid functions as the payer of last resort; and lessons learned during the pandemic to improve care in nursing homes.


Chronic disease management provider to pay $14.9M to resolve alleged false claims

The Department of Justice announced that  Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A., and Bluestone National LLC, operating in Florida, Minnesota, and Wisconsin, respectively, will pay $14.9 million  to resolve allegations that they knowingly submitted claims for certain Evaluation and Management (E&M) codes for services related to the management of chronic care patients in assisted living and other care facilities that were not provided in conformity with applicable Medicare, Medicaid, and TRICARE requirements. 

“Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in the announcement. “We will pursue health care providers that defraud the taxpayers by knowingly submitting inflated claims.”

The settlement resolves allegations that from Jan. 1, 2015, through Dec. 31, 2019, Bluestone knowingly submitted claims for two E&M codes, the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490), that did not support the level of service provided. The federal government’s share of the settlement is $13.8 million and $1 million will be paid to the states of Florida and Minnesota.

As part of the settlement, Bluestone has entered into a five-year Corporate Integrity Agreement with HHS-OIG, which requires Bluestone to establish and maintain a compliance program meeting certain requirements and to submit to an Independent Review Organization’s review of Bluestone’s Medicare claims to determine whether such claims were medically necessary, appropriately documented, and correctly coded. In addition, the settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Lisa Loscalzo, the former general manager for Bluestone’s Florida market. She will receive $2.8 million in connection with the settlement.

Wyden pushes HHS to require mandatory health care cybersecurity rules

In a letter to HHS, Senate Finance Committee Chair Ron Wyden, D-Ore., urged the agency to immediately mandate health care organizations improve their cybersecurity practices and to protect against cyberattacks that can shut down medical centers for weeks and leave patients’ personal medical information exposed to criminals and foreign spies. 

The letter was sent in the wake of the Change Healthcare cyberattack, which disrupted systems across the country for months.

The current approach, which allows the health care sector to self-regulate cybersecurity practices, is insufficient and fails to protect patients’ personal information, Wyden says.

He urged HHS to immediately put in place new security rules, including establishing minimum technical cybersecurity and resiliency standards, performing periodic audits, and providing technical assistance to providers, particularly those with low resources. 

“The current epidemic of successful cyberattacks against the health care sector is a direct result of HHS’s failure to appropriately regulate and oversee this industry, harming patients, providers, and our national security,” wrote Wyden.

Report: Dropping ACA coverage firewall” could reduce uninsured by 1.4M

A new report by the Commonwealth Fund finds that removing the Affordable Care Act (ACA) “firewall” between the employer and individual insurance markets would likely reduce the uninsured population by 1.4 million and save households $4.4 billion in health care spending by allowing a switch to more affordable coverage.

The brief used the Urban Institute’s Health Insurance Policy Simulation Model to estimate the effects of
dropping the firewall on health insurance coverage and spending by households, states, and the federal government.

Researchers found that eliminating the firewall would lead 1.8 million people to shift out of employer-sponsored insurance and find more affordable coverage in the marketplace and a reduction of 1.4 million uninsured people. In addition, the removal of the firewall would save households $4.4 billion in premiums and other health care spending. However, the federal government would increase spending by $17.8 billion, primarily for marketplace premium tax credits. Researchers said the amount represents an increase of 18 percent in federal spending on premium tax credits.