Managed Care Outlook 2025

Business and management - briefcase icon

Read time: 4 minutes

As we step into 2025, managed care organizations (MCOs) face a dynamic and multifaceted landscape that demands strategic foresight and adaptability. The evolving regulatory environment, technological advancements, and shifting societal expectations are reshaping the managed care sector. This year's Managed Care Outlook delves into the critical issues and emerging trends that MCOs must navigate to thrive in this complex ecosystem. From regulatory compliance and litigation trends to innovations in care delivery and fraud prevention, this report provides a comprehensive overview of what lies ahead.

Authors: Martin J. Bishop

Regulatory and legal challenges

The regulatory landscape for MCOs continues to evolve, with significant implications for compliance and operational strategies. The U.S. Supreme Court's 2023 decision in Students for Fair Admissions v. Harvard has prompted organizations to reassess their diversity, equity, and inclusion strategies. MCOs must balance legal compliance with the imperative to foster inclusive environments that improve health outcomes and innovation.

Moreover, the implementation of the No Surprises Act and its independent dispute resolution process has led to a surge in litigation as providers seek to enforce independent dispute resolution awards. MCOs must enhance their payment processes and ensure timely compliance to mitigate legal risks. Additionally, the Mental Health Parity and Addiction Equity Act (MHPAEA) final rule introduces new requirements for 2025 and 2026, necessitating thorough preparation and data-driven approaches to ensure compliance and equitable access to mental health services.

With the recent change in administration, there is an anticipated shift in regulatory priorities and enforcement strategies. This transition is expected to bring about new regulatory frameworks and policies that MCOs will need to navigate carefully to maintain compliance and operational efficiency.

Litigation trends

Litigation remains a significant concern for MCOs, with several key trends emerging. The rise in class actions alleging disability discrimination because of the exclusion of weight loss medications highlights the need for careful consideration of coverage policies. Behavioral health litigation under ERISA and MHPAEA is also on the rise, with courts increasingly scrutinizing the adequacy of denial letters and requiring detailed explanations and references to medical records.

The Ninth Circuit's decision in Bristol SL Holdings, Inc. v. Cigna Health & Life Insurance Co. underscores the importance of ERISA preemption in protecting MCOs from state-law claims by out-of-network providers seeking additional reimbursement. MCOs must stay vigilant and proactive in addressing these and other litigation trends to minimize legal exposure and ensure compliance with evolving standards.

Key takeaways
  • MCOs must navigate evolving regulations, including the No Surprises Act and MHPAEA, to ensure compliance and mitigate legal risks
  • Robust AI governance programs are essential for MCOs to manage risks and align with regulatory frameworks
  • Vigilant oversight and robust policies are crucial to curb improper practices in emergency services, molecular panels, and remote neuromonitoring
Download full report
Download full report
Download