|
Twice-Weekly Briefing
Friday, August 14, 2026
Issue 260814-54
|
|
|
|
The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
|
|
In This Edition
| 1. |
The full Fifth Circuit vacates two parts of the federal rule that sets the Qualifying Payment Amount for out-of-network claims. | | 2. |
The National Alliance finds employers with full claim level access use 11.9 cost strategies on average against 7.9 for those without. | | 3. |
KFF publishes the first federally required prior authorization metrics, with insurers overturning two thirds of denied Medicare Advantage requests on appeal. | | 4. |
Ten pharmacy benefit managers bid on Delaware's state employee contract and none of them met all 25 of the committee's requirements. | | 5. |
Veloxis pays more than $46 million over kickbacks to transplant providers and specialty pharmacies, including a record Sunshine Act penalty. |
Five developments from the past week, each one pointing at a document your plan already has the right to read.
|
|
|
|
01
|
OUT-OF-NETWORK COSTS
|
August 11, 2026
A Federal Court Strikes Down Two Parts of the Formula That Prices Out-of-Network Claims
The full Fifth Circuit ruled on August 11 in Texas Medical Association v. HHS that two pieces of the federal rule governing the Qualifying Payment Amount are unlawful. The court vacated the requirement that plans fold ghost rates, meaning contracted rates for services a provider never actually performs, into the QPA median. It also vacated the exclusion of bonus, incentive, and risk sharing payments from the calculation. The exclusion of one off single case agreements survived, including for air ambulance claims. The opinion cites the numbers that drove it. Arbitration volume has run 84 times higher than the agencies projected. Providers prevail in more than 80 percent of independent dispute resolution cases, and arbitrators pick a rate above the QPA in 85 percent of them. Survey evidence in the record shows 57 percent of respondents held contracted rates for services they never provide, and 68 percent of primary care professionals held rates for services performed fewer than twice a year.
|
|
MOC Perspective
Your plan pays those awards. Not your administrator, not your rented network, and not your stop loss carrier until a claim clears the attachment point. The QPA is the number your administrator puts in front of an arbitrator on your behalf, and a court has now found the government built it too low in two specific ways. When the agencies rewrite the calculation, the median moves up, and awards that already beat the QPA in 85 percent of cases move with it. That cost lands in your 2027 claims whether or not anyone labels it. Most administrators do not break out arbitration results at all, so the increase arrives inside medical trend with nothing attached to explain it. Ask for the segmentation before the rewrite does. Every arbitration filed against your plan, the QPA you offered, the final award, the specialty, and the facility the claim came from. Once you can read that layer, you can decide whether the answer is a direct contract with the anesthesia or radiology group generating most of it.
What To Do Now
| ▪ |
Require quarterly arbitration reporting from your administrator, broken out by case, offered QPA, final award, specialty, and originating facility. | | ▪ |
Identify the in-network facilities where your members are routinely treated by out-of-network anesthesiologists, radiologists, and pathologists. | | ▪ |
Ask your administrator in writing how it will recalculate the QPA once the agencies issue revised guidance, and who absorbs the difference. | | ▪ |
Build a 2027 claims budget that carries a higher out-of-network layer rather than assuming the current one holds. |
|
|
|
Source: U.S. Court of Appeals for the Fifth Circuit
|
|
|
02
|
EMPLOYER PURCHASING
|
August 12, 2026
Employers With Full Claims Access Run Four More Cost Strategies Than Those Without
The National Alliance of Healthcare Purchaser Coalitions released its 2026 Pulse of the Purchaser survey on August 12, covering 408 employers and fielded in May and June. Employers with full claim level access reported using 11.9 high value purchasing strategies on average. Employers with limited, no, or uncertain access reported 7.9. The survey also records a pharmacy market in motion. The three largest PBMs now hold 54.3 percent of respondents' primary contracts, down from 63.4 percent a year earlier, and 55.7 percent of the employers still with them are weighing a change within one to three years, against 31.1 percent of employers using other PBMs. Respondents project a 7.7 percent cost increase before plan design changes, with 33 percent expecting 9 percent or more. Hospital and facility care takes 30.5 percent of their spending and prescription drugs take 21.1 percent. Support for PBM reform runs to 87.6 percent and for hospital price transparency to 84.6 percent.
|
|
MOC Perspective
Four strategies is not a rounding error. It is the distance between a plan that can price its own network and one that takes a summary report on faith. Read the finding in the order that matters for your renewal, because access came first. The employers running more cost strategies are not smarter than you. They are the ones whose contracts let them read the claim line. Everything downstream needs that file to even begin: direct contracting, site of care steerage, reference pricing, a PBM audit with teeth. ERISA already requires you to spend plan money prudently, and the Consolidated Appropriations Act already gives you the right to the data that makes prudence provable. So if your administrative services agreement narrows that right through a confidentiality clause, a per extract fee, or a limit on who may analyze the file, the clause is the finding. Fix it at renewal. A contract you signed is a decision you made, and it will be read that way later.
What To Do Now
| ▪ |
Read your administrative services agreement for every clause that limits claim level access, third party analysis, or audit frequency. | | ▪ |
Request your full paid claims file, medical and pharmacy together, in a machine readable format with no aggregation. | | ▪ |
Count your own active cost strategies against the 11.9 figure and document the gap in your committee minutes. | | ▪ |
Put unrestricted data access and audit rights on the table before any 2027 administrator or PBM contract is signed. |
|
|
|
Source: National Alliance of Healthcare Purchaser Coalitions
|
|
|
03
|
PRIOR AUTHORIZATION
|
August 13, 2026
Insurers Overturn Two Thirds of Denied Medicare Advantage Prior Authorizations on Appeal
KFF published the first look at federally required prior authorization metrics on August 13, covering 2025 data for roughly 71 million enrollees. Insurers denied 12 percent of standard prior authorization requests in Medicare Advantage, 14 percent in Medicaid managed care, and 18 percent in the ACA marketplace. The spread between carriers is wide. Standard denials in Medicare Advantage ran from 5 percent at Elevance to 17 percent at UnitedHealth Group, and marketplace denials ran from 3 percent at GuideWell to 25 percent at Centene. When members appealed, plans reversed themselves often. Insurers overturned 67 percent of denied standard requests in Medicare Advantage, 47 percent in Medicaid managed care, and 43 percent in the marketplace. KFF names the gap plainly. No comparable public data exists for self-funded plans, which cover most people with employer coverage.
|
|
MOC Perspective
None of those numbers describe your plan, and that is the problem worth sitting with. The carriers posting 5 percent and 17 percent denial rates in the same market are the same companies administering self-funded employer plans, frequently applying the same clinical criteria through the same utilization review vendors. The only real difference is that nobody publishes your version. And a 67 percent overturn rate is not a story about members who appeal. It is a measurement of how often the first decision was wrong, and every one of those decisions cost your plan an appeal cycle, a delayed procedure, and a member who now expects the benefit to fight them. You do not need a federal reporting rule to see this. The record already sits in your administrator's system. Ask for your own denial and overturn rates by service category and by reviewer, then stop treating the answer as a report you receive and start treating it as a number your vendor is paid to hit.
What To Do Now
| ▪ |
Request 2025 and 2026 prior authorization denial rates for your own members, split by service category, standard versus expedited, and reason code. | | ▪ |
Ask what share of your plan's denials were overturned on internal appeal and how many days each appeal took. | | ▪ |
Confirm in writing whether your administrator or its utilization review vendor uses an algorithm to make or recommend denials, and who reviews the output. | | ▪ |
Write denial accuracy and appeal turnaround into the 2027 agreement as a performance guarantee with fees at risk. |
|
|
|
Source: KFF
|
|
|
04
|
PBM CONTRACTING
|
August 11, 2026
Delaware Set 25 PBM Requirements and Not One of Ten Bidders Met Them All
Delaware's State Employee Benefits Committee reported on a pharmacy benefit procurement ordered by a 2025 Senate joint resolution, and Delaware Public Media covered the findings on August 11. The committee set 25 requirements for bidders. Ten pharmacy benefit managers submitted bids. None of them met all 25. The committee's proposed response is to extend the state's existing contract with CVS Caremark another year into 2027. State Senator Ray Seigfried, who pushed for the review, called the report a reflection of an unwillingness to look beyond the current process and a blueprint for bureaucratic inertia, and says he will introduce transparency legislation next session. Pharmacy remains one of Delaware's largest single expenditures.
|
|
MOC Perspective
Ten bidders read the same 25 requirements and every one of them declined at least one. Treat that as market intelligence you did not have to pay for. A public plan with real purchasing weight wrote down what transparency looks like in contract language, put it out to bid, and the market said no. Which tells you something uncomfortable about your own agreement. The terms your PBM accepted without argument were probably not the demanding ones. The useful move is not to copy Delaware's list. It is to find out which of your requirements got quietly traded away, and when. Pull the requirements matrix from your last pharmacy procurement and set it against the executed contract and every amendment since. Definitions of generic, brand, and specialty. Rebate pass through, including any fee paid to an aggregator you hold no contract with. Audit scope, who selects the auditor, and how many days you get. The distance between what you asked for and what you signed is your 2027 negotiating agenda, already written down.
What To Do Now
| ▪ |
Compare your last pharmacy request for proposal against the executed contract and every amendment, and list what was dropped. | | ▪ |
Demand written disclosure of all rebate and administrative revenue retained by your PBM and by any rebate aggregator in the chain. | | ▪ |
Confirm your audit rights name an independent auditor of your choosing, with no cap on claim volume and no redactions. | | ▪ |
Set your renewal decision date early enough that walking away is a real option rather than a bluff. |
|
|
|
Source: Delaware Public Media
|
|
|
05
|
PROGRAM INTEGRITY
|
August 10, 2026
A Drug Maker Pays $46 Million for Paying Specialty Pharmacies to Push Its Product
The Justice Department announced on August 10 that Veloxis Pharmaceuticals will pay more than $46 million to resolve criminal and civil kickback liability tied to Envarsus XR, a transplant immunosuppressant. The company pays a criminal penalty above $10 million, $21,211,251 to the United States and $13,238,749 to state Medicaid programs under the False Claims Act, and a $1.55 million civil penalty under the Physician Payments Sunshine Act, which the department calls the largest Sunshine Act recovery since the law passed in 2010. The conduct ran from October 2016 through June 2023. Veloxis paid transplant providers through dinners, trips, retreats, gifts, and consulting fees, and paid specialty pharmacies per patient and per month amounts labeled as enhanced services. The company also entered a five year corporate integrity agreement with the HHS Office of Inspector General.
|
|
MOC Perspective
Kickback cases read like someone else's problem until you look at where the money landed. Specialty pharmacies were paid per patient and per month to move one product. Those same pharmacies dispense to commercial members, and your plan paid the resulting claims at the contracted rate without ever seeing the arrangement behind them. The detectable signal was never on the pharmacy claim itself. It was in the pattern. One product holding a share of its therapeutic class that no clinical guideline supports, concentrated in a small number of dispensing sites, written by a short list of prescribers whose public payment records show consulting income from the same manufacturer. Catching that means putting your pharmacy file, your medical file, and the Open Payments database in one place and asking whether the three agree. Most plans keep them in three systems owned by three vendors who never compare notes, which is a fair part of why this arrangement ran for nearly seven years.
What To Do Now
| ▪ |
Match your highest volume specialty prescribers against the CMS Open Payments database and flag manufacturer payments tied to drugs they prescribe heavily. | | ▪ |
Analyze specialty dispensing by pharmacy and identify any single site holding an outsized share of one product. | | ▪ |
Require your PBM to disclose every payment it or its affiliated specialty pharmacy receives from manufacturers, by drug. | | ▪ |
Run your pharmacy and medical claims against each other quarterly instead of reviewing them as two separate reports. |
|
|
|
Source: U.S. Department of Justice
|
|
|
The Bottom Line
Every story in this issue turns on a document somebody else is holding. The formula that prices your out-of-network claims. The claim level file your contract may or may not let you read. The prior authorization log carrying your own denial and overturn rates. The requirements list you wrote for your PBM and the contract you actually signed. The payment records connecting a prescriber to a manufacturer. None of it is secret, and none of it waits on new legislation. What it takes is someone with authority to ask, a date the answer is due, and a renewal still open enough that no costs the vendor something. You have roughly ten weeks before most 2027 contracts close. Ask while the asking still carries weight.
|
|
|
Thanks for reading.
Jude Odu
Founder and Principal, Model Optimal Care
Author, Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
|
|
|
|
|
