GLP-1 drugs are almost single-handedly forcing employers to reconsider workers’ health care

Another hospital system sues CVS Health, how Medicaid cuts will change everything, and more from Health Care Inc.

STAT News

By Bob Herman

Aug. 31, 2026

Are GLP-1s breaking employers?

GLP-1 drugs are almost single-handedly forcing employers to reconsider how they pay for their workers’ care.

A handful of major corporations have recently said they are ending coverage of GLP-1s specifically for obesity, including PepsiCo, Starbucks, PwC, and HCA Healthcare. Large health insurers, state Medicaid plans, and public-sector employers have been cutting GLP-1 coverage for weight loss since 2024.

These pullbacks line up with the latest survey data: 14% of the nation’s largest employers have dropped coverage of GLP-1s for weight loss, or will do so for 2027, according to the Business Group on Health’s employer survey released last week.

340B stressful for CVS

Another hospital system has sued CVS Health over the money swirling around the federal 340B drug discount program.

A hospital that is part of Froedtert Health in Wisconsin is alleging CVS’ pharmacy benefit manager and pharmacies illegally diverted $18 million toward itself since 2020 — money that it says should have gone to the Froedtert hospital. Under the 340B program, hospitals buy drugs at a steep discount and then are reimbursed at higher market rates by PBMs and insurers. The resulting profits are supposed to help nonprofits care for the poor, but we know that’s not always the case.

CVS spokesperson David Whitrap pushed back against the lawsuit in a statement, saying: “Froedtert’s legal complaint is riddled with erroneous accusations. We’ll defend against the lawsuit vigorously.”

Four other hospital systems have filed identical lawsuits against CVS Health this year, with varying degrees of alleged damages since 2020: Mount Sinai Health System in New York ($121 million), University of Michigan Health ($66 million), University of Kansas Health System ($61 million), and Henry Ford Health System ($29 million). Combined, the five systems allege they’ve been shorted almost $300 million by CVS over the past five years.

This isn’t the only way that the 340B program is a “headwind” for the company right now, executives said in the second-quarter earnings call. Drug companies are also making it more difficult for hospitals and contract pharmacies to get the discounts.

A casual half-billion-dollar upcoding settlement

The Villages Health — the network of physicians treating seniors in The Villages, Fla. — has agreed to pay $541.5 million to settle allegations of fraudulent coding practices among its Medicare Advantage patients. The allegations were self-disclosed to the government.

A reminder that TVH went through bankruptcy last year, and Humana bought it for a meager $50 million. Humana also fully knew TVH had these “coding issues,” and bought it anyway. There is still so much money in Medicare Advantage plans that a large health insurance company can willingly stomach a half-billion-dollar settlement if it means it can have full control of a large group of prospective patients and health plan members.

The behavior of the decision-makers

We know the arbitration process created by the No Surprises Act has created an ecosystem of bloat unlike anything anyone had predicted. A lot of attention has been paid to the provider groups getting rich off the process and the insurers complaining about the providers.

But less attention has been paid to the actual entities making the final decisions — the companies that, more often than not, are siding with providers. A new paper by researchers at Georgetown University highlights one particularly questionable outlier.

Take, for instance, IPRO. That arbiter ruled in favor of doctors and providers in 99.4% of its disputes during the last quarter of 2025 — and gave out a median payout that was six times what the average in-network rate was. In other words, providers are popping champagne with IPRO as their arbitration entity. In a statement, IPRO spokesperson Theresa Jacobellis said the company “stand[s] by the determinations we have made, which have been reached by our reviewers who strictly follow CMS guidelines.” Notably, many of the others are ruling in favor of providers more than 70% of the time.

“This new data from federal officials really presents an opportunity for additional scrutiny and investigation into the different arbiters’ behavior,” Kennah Watts, a research fellow at Georgetown and co-author of the study, told reporters last week.

How Medicaid cuts will change everything

My colleague Daniel Payne is an ambitious fellow. He has launched a five-part series called “Unraveled,” which documents and analyzes how the Medicaid cuts passed by Republicans and President Trump will pressure the nation’s health care system — particularly for the true safety net and rural providers living on the bleeding edge.

The first part plants the flag. Daniel went to Maine, where he talked to a bunch of people who are already trying to plan for the Medicaid cuts, which go into effect this January. The sourcing was wide-ranging.

The second part reveals how the hospital industry’s staunch lobbying forces are laying the groundwork to delay, roll back, or mitigate those cuts. But hospitals don’t have as many receptive ears. As Max Seltzer, the health policy director for Sen. Roger Marshall (R-Kan.), said at an event in July: “The hospital side is impossible to ignore. I can go look at your 990 form and see that your CEO got paid $6 million — not a lot of sympathy.” Make sure to check them out.

Industry odds and ends

·   This KFF Bill of the Month from Lauren Sausser hits a lot of the issues with commercial health insurance: Not all “preventive” care, like a breast MRI, is covered for free. And even state laws requiring things like breast MRIs be covered at no cost don’t matter if you’re in a plan offered by a self-insured employer.

·   The Food and Drug Administration has approved the highly touted drug made by Revolution Medicines that extends the life of pancreatic cancer patients, my colleagues Adam Feuerstein and Angus Chen report. Revolution set the list price of the drug, which will be marketed as Rasonque, at $39,800 per month.

·   Individual Affordable Care Act plans and Medicare Advantage plans drove most of the underwriting losses at health insurers in 2025, an analysis from Mark Farrah Associates shows.

·   Maryland is suing UnitedHealth Group and its Optum subsidiary for $380 million, alleging the company provided “a defective computer system to Maryland Medicaid’s behavioral health program that crashed on its first day of use and never functioned properly.”

·   Disney told its employees that their spouses can no longer enroll on the company’s health plan if spouses have access to health insurance through their own employer, Matthew Belloni of Puck reports.