Blue Cross Blue Shield sues AllianzGI over investment strategies

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https://www.pionline.com/courts/blue-cross-blue-shield-sues-allianzgi-over-investment-strategies

Blue Cross Blue Shield’s national employee benefits committee filed a lawsuit against Allianz Global Investors and its investment consultant Aon Investments USA, charging both with breaches of fiduciary responsibilities and breach of contract regarding more than $2 billion in losses in the insurer’s defined benefit plan trust.

The lawsuit, filed Wednesday in U.S. District Court in New York, alleges that AllianzGI took “reckless actions” in the management of three funds the manager had said offered downside protection against market declines and volatility, according to the court filing.

As of Jan. 31, the National Retirement Trust of the Blue Cross and Blue Shield Association had a total of $2.9 billion invested in the AllianzGI Structured Alpha Multi-Beta Series LLC I, AllianzGI Structured Alpha Emerging Markets Equity 350 LLC, and the AllianzGI Structured Alpha 1000 LLC, according to the filing.

The numerical values in the strategy names correspond to the amount of alpha in basis points above a corresponding index the strategy is expected to achieve.

After the funds experienced heavy losses in February and March, the investments were liquidated and redeemed, and the committee received about $540 million, according to the filing.

As of Dec. 31, 2018, the Blue Cross and Blue Shield Association National Retirement Trust had $4.6 billion in assets, according to its most recent Form 5500 filing.

The lawsuit, which includes claims breach of fiduciary duty and breach of contract against both AllianzGI and Aon, alleges that AllianzGI “caused the (benefits) committee to believe that structured alpha’s risk profile was consistent with Allianz’s stated investment strategy rather than the actual risk profile, either by making false or misleading representations about structured alpha or failing to disclose information necessary to correct prior representations that were inconsistent with how Allianz was actually managing the strategy.”

The suit alleges Aon breached its obligations by “failing to monitor and inform the committee of breakdowns in Allianz’s risk management protocols, learning only after the catastrophic events of March 2020 that Allianz had inadequate risk management in place.”

AllianzGI’s structured alpha strategies have historically been designed to be both long and short volatility, according to a September 2016 presentation: Taking range-bound spread positions, to sell options that were most likely to expire worthless (short volatility); hedged positions designed to protect against market crashes (long volatility); and directional spread positions designed to generate returns when equity indexes rise or fall more than usual during multiweek periods (long/short volatility).

The lawsuit alleges that “when equity markets declined, volatility spiked and the funds’ option positions were exposed to a heightened risk of loss in February and March 2020, those promised protections were absent.”

The lawsuit seeks relief including restoration of all losses, actual damages and accounting and disgorgement of fees and profits.

John Wallace, AllianzGI spokesman, said in an email: “While the losses sustained by the Structured Alpha portfolio during the market downturn in late February and March were disappointing, AllianzGI believes the allegations made by Blue Cross Blue Shield are legally and factually flawed. We will defend ourselves vigorously against these claims. Blue Cross Blue Shield was advised by a sophisticated investment consultant to evaluate the Structured Alpha strategy. These funds sought to deliver substantial returns of as much as 10% above, net of fees, the returns of the fund’s benchmark, an index like the S&P 500. As was fully disclosed to Blue Cross Blue Shield, the Structured Alpha strategy involved risks commensurate with those higher returns. Blue Cross Blue Shield and their consultant determined that the Structured Alpha Portfolio fit with their overall investment goals and risk tolerances.”

The $15.3 billion Arkansas Teacher Retirement System, Little Rock, filed its own lawsuit against Allianz Global Investors and subsidiaries in July, regarding its own losses in structured alpha strategies.

Robert Elfinger, Aon spokesman, said the company does not comment on pending litigation.

Sean W. Gallagher, Adam L. Hoeflich, Nicolas L. Martinez, Abby M. Mollen and Mark S. Ouweleen, partners at Bartlit Beck, attorney for the plaintiffs, could also not be immediately reached for comment.

 

 

 

 

Sam’s Club launches $1 telehealth visits for members: 7 details

Posted on by • Posted in Consumer Focus, Consumer Preferences, Consumerism, Disruption, Disruptive Technology, Laboratory, Physician, Prescription Drugs, Price Transparency, Pricing, Primary Care, Primary Care Delivery Model, Telemedicine, Virtual Care Strategy, Virtual Healthcare, Virtual Visit • Leave a comment

https://www.beckershospitalreview.com/telehealth/sam-s-club-launches-1-telehealth-visits-for-members-7-details.html?utm_medium=email

On-Demand Text-Based Primary Care App | 98point6

Sam’s Club partnered with primary care telehealth provider 98point6 to offer members virtual visits.

Seven details:

1. Sam’s Club now offers members access to telehealth visits through a text-based app run by 98point6.

2. Members can purchase a $20 quarterly subscription for the first three months; the regular sign-up fee is $30 per person. After the first three months, members pay $33.50 every three months.

3. The subscription gives members unlimited telehealth visits for $1 per visit. The service has board-certified physicians available 24 hours per day, seven days a week.

4. Members can also subscribe for pediatric care.

5. Physicians can diagnose and treat 400 conditions including cold and flu-like symptoms as well as allergies. They can also monitor chronic conditions including diabetes, depression and anxiety.

6. Members can use the app to obtain prescriptions and lab orders as well.

7. Sam’s Club has around 600 stores in the U.S. and Puerto Rico and millions of members.

“Offering access to telemedicine was on our roadmap in the pre-COVID world, but the current environment expedited the need for this service to be easily accessible, readily available and most of all, affordable,” said John McDowell, vice president of pharmacy operations and divisional merchandise at Sam’s Club. “Through providing access to the 98point6 app in a pilot, we quickly realized that our members were eager to have mobile telehealth options and we wanted to provide this healthcare solution to all of our members as a standalone option.”

 

 

 

10 states where private insurers pay the most, least relative to Medicare

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https://www.beckershospitalreview.com/finance/10-states-where-private-insurers-pay-the-most-least-relative-to-medicare.html?utm_medium=email

Market Muscle: Study Uncovers Differences Between Medicare And Private Insurers | Kaiser Health News

Nationwide, private insurers pay an average of 247 percent more than what Medicare pays for similar services, according to a RAND Corp. study published Sept. 18. 

The study examined 750,000 claims for inpatient hospital stays and 40.2 million claims for outpatient services between 2016 and 2018. The sample included data from 3,112 hospitals across 49 states.

The Advisory Board mapped where private insurers pay hospitals the most and least relative to Medicare. Data for Hawaii, North Dakota, Maryland and South Dakota were unavailable. 

Here are the 10 states where private insurers pay the most relative to Medicare:

1. West Virginia: 349.2 percent
2. South Carolina: 349.1 percent
3. Florida: 340 percent
4. Tennessee: 329.5 percent
5. Alaska: 327.5 percent
6. Indiana: 304.1 percent
7. Georgia: 299 percent
8. Minnesota: 295.7 percent
9. Wisconsin: 290.3 percent
10. Virginia: 288.3 percent

Here are the 10 states where private insurers pay the least relative to Medicare:

1. Arkansas: 186.1 percent
2. Michigan: 193.6 percent
3. Rhode Island: 195.9 percent
4. Nevada: 207.9 percent
5. Pennsylvania: 208.8 percent
6. Kentucky: 214.2 percent
7. Connecticut: 214.6 percent
8. Utah: 216.1 percent
9. Kansas: 225.9 percent
10. Massachusetts: 227.7 percent

 

 

Medicare won’t cover coronavirus vaccines approved under emergency use authorization

Posted on by • Posted in Coronavirus, Dept of Health and Human Services (HHS), Food and Drug Administration (FDA), Health Insurance Coverage Adequacy, Health Policy, Medicare, Out of Pocket Expenses, Pandemic, Vaccine, Vaccine Distribution, Vaccine Efficacy • Leave a comment

https://www.beckershospitalreview.com/pharmacy/medicare-won-t-cover-coronavirus-vaccines-approved-under-emergency-use-authorization.html?utm_medium=email

Medicare Wouldn't Cover Costs of Administering Coronavirus Vaccine Approved Under Emergency-Use Authorization - WSJ

Medicare won’t cover the cost of a COVID-19 vaccine if it is approved under an emergency use authorization, according to The Wall Street Journal. 

The White House recently concluded that Medicare’s exclusion of emergency-use drug costs could mean 44 million Americans, or 15 percent of the U.S. population, may have to pay out-of-pocket for a vaccine if it is approved under an emergency use authorization, the Journal reported.

HHS is now exploring coverage options, and a spokesperson told the Journal any vaccine doses bought by the government will be provided free.

The administration of President Donald Trump has pushed for a COVID-19 vaccine to be approved and distributed before the presidential election, which would likely only come with an emergency use authorization, since FDA approvals take more time.

In March, lawmakers passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which ensures no out-of-pocket costs for COVID-19 vaccines for people on Medicare.

HHS also said in August that government health insurance programs, including Medicare and Medicaid, would cover the costs of administering a COVID-19 vaccine. 

 

 

 

 

Ascension records $1B annual loss

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https://www.beckershospitalreview.com/finance/ascension-records-1b-annual-loss.html?utm_medium=email

Ascension, Google working on 'secret' patient data project, says WSJ | Healthcare IT News

Ascension’s revenue remained mostly flat year over year in fiscal 2020, but the St. Louis-based health system ended the period with a loss, according to financial documents. 

The 150-hospital system reported operating revenue of $25.3 billion in fiscal year 2020, down less than 1 percent from a year earlier. Net patient service revenue declined in the most recent fiscal year due to a drop in patient volume attributed to the COVID-19 pandemic.

“COVID-19 has been encountered across all Ascension markets, to varying degrees, and has had a negative impact on the system’s revenues and operating margin,” the health system said.

Total admissions, emergency room visits, inpatient and outpatient surgeries, clinic and urgent care visits were down year over year in fiscal 2020. However, patient volume began to bounce back in the fourth quarter. The system said patient discharges in June were at 90 percent of their June 2019 levels.

The health system’s expenses climbed 2.7 percent to $25.7 billion in fiscal 2020. The increase was primarily due to expanded service lines, merit raises and IT costs, Ascension said. Total salaries, wages and benefits increased 2.5 percent year over year.

Ascension ended the most recent fiscal year with an operating loss of $639.4 million, compared to operating income of $130.6 million a year earlier. 

After factoring in nonoperating items, including losses from investments of $410.2 million, Ascension reported a net loss of $1.04 billion in fiscal 2020. A year earlier, the health system reported investment gains of $1.1 billion and net income of $1.23 billion. 

The health system said its charity care costs climbed 9.8 percent year over year to $665 million. The increase was primarily attributable to more patients qualifying for financial assistance, Ascension said.

 

Cartoon – State of the Union on Integrity

Posted on by • Posted in 2020 Election Issues, Cartoon, Core Values, Credibility, Ethics, Evasive, Honesty, Integrity, Leadership Culture, Leadership Integrity, Leadership Intent, Leadership Trust, Meeting, Meetings, State of the Union, Transparency, Trust, Truth • Leave a comment

Cartoon – Leadership Integrity on the Line | HENRY KOTULA

Cartoon – Coronavirus Projections

Posted on by • Posted in 2020 Election Issues, Cartoon, Centers for Disease Control & Prevention (CDC), Coronavirus, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, False Hope, False Narrative, Infection Control, Infection Control Plan, Infectious Virus, Leadership Decentralized, Misinformation, Misinterpret, Mislead, Misleading, Mistake, Mistrust, Mixed Message, Mortality, National Strategy, Pandemic, Partisanship, Projections, Public Health, Public Opinion, Public Perception, Public Safety, Public Schools, Public Trust, Quarantine, School Reopening, Scientists, Social Distancing, Transparency, Trust, Truth, Wishful Thinking • Leave a comment

Cartoon – Coronavirus Projections | HENRY KOTULA