Elevance Health, the nation's second-largest health insurer, announced plans to reduce its Medicaid managed care footprint over the next year as medical costs remain elevated. The exit comes as states prepare to implement Medicaid work requirements. Elevance operates Medicaid plans in multiple states under its Anthem and Wellpoint brands. The decision reflects ongoing profitability challenges in Medicaid managed care following the end of pandemic-era continuous enrollment provisions.
Why it mattersElevance's continued retreat from Medicaid signals persistent margin pressure across major national plans and may trigger network disruption and procurement opportunities as states seek replacement contractors.
Managed Care · Finance
The Federal Trade Commission has settled a lawsuit against CVS Caremark over allegations the company artificially inflated insulin prices and restricted access to diabetes treatment. The settlement resolves FTC charges related to the pharmacy benefit manager's pricing practices for insulin products. The action follows broader federal scrutiny of PBM practices affecting drug pricing and access. Terms of the settlement were not disclosed in the initial report.
Why it mattersMedicaid MCOs contracting with CVS Caremark or other PBMs for pharmacy services face potential operational changes and heightened regulatory attention to insulin pricing transparency and formulary access requirements.
Pharmacy · Managed Care
CVS Caremark reached a settlement with the Federal Trade Commission over insulin pricing practices. The terms mirror the FTC's earlier settlement with Express Scripts and prohibit the pharmacy benefit manager from favoring higher-cost drug versions on standard formularies based on rebate arrangements. The settlement takes effect immediately upon court approval. For Medicaid managed care plans that contract with CVS Caremark or operate integrated PBM arrangements, this settlement signals continued federal scrutiny of rebate-driven formulary design and may preview future enforcement against similar practices affecting Medicaid populations.
Why it mattersMedicaid MCOs using CVS Caremark or similar PBM structures face heightened regulatory attention on rebate arrangements that may inflate drug costs, particularly for insulin and other high-cost therapeutics covered under managed care contracts.
Pharmacy · Managed Care
Pediatric drugs represent the therapeutic category most affected by active drug shortages, with 16 ongoing shortages including six involving IV fluids and additives. Children's hospitals face unique challenges managing these shortages compared to adult health systems due to weight-based dosing, limited alternative formulations, and smaller patient volumes that reduce purchasing leverage. The article examines operational strategies pediatric hospitals use to manage supply disruptions, though specific policy interventions or effective dates are not detailed.
Why it mattersMedicaid managed care organizations with pediatric or CHIP populations must address formulary disruptions, prior authorization protocols, and care continuity when contracted children's hospitals face drug shortages affecting covered services.
CHIP · Pharmacy · Managed Care
A Center for Healthcare Quality and Payment Reform report finds that roughly one-third of rural hospitals — 720 facilities — face closure risk, raising questions about surgical access in underserved areas. As rural hospitals retreat from operating room services, the analysis highlights growing surgical care deserts. The report does not specify a timeline for closures but underscores ongoing financial instability in rural provider markets. For Medicaid managed care organizations with rural network obligations, this trend signals potential network adequacy challenges and increased need for alternative surgical access strategies.
Why it mattersMCOs serving rural counties may face network adequacy compliance gaps as hospitals close ORs, requiring investment in alternative surgical access points or transportation supports to meet state contract requirements.
Managed Care
Health systems have invested heavily in revenue cycle automation over two decades, with the 2025 CAQH Index estimating $258 billion in avoided administrative costs in 2024. Despite these efficiency gains, denial rates continue to climb, with 41 percent of providers now reporting at least one in ten claims denied—a figure that has increased annually. The trend suggests automation alone has not resolved underlying issues driving claim denials, including prior authorization requirements, documentation standards, and payer policies.
Why it mattersRising denial rates directly affect Medicaid MCO provider networks and administrative costs, as plans face increased appeals, disputes, and potential adequacy concerns when contracted providers struggle with claim rejections.
Managed Care · Finance