Aetna reports 52% surge in second quarter profit

http://www.healthcarefinancenews.com/news/aetna-reports-52-surge-second-quarter-profits?mkt_tok=eyJpIjoiWVdGallqTTBZVGRoTVdKaSIsInQiOiI4UXRNZDB6VUZ2MEtTbGhNbm9zZ3dnQys3Z2dkS2VYWDQyZlwvbkxtNEIxRlwvT085a056VlwvbjhweFlxOEFWUktZOGVMeWRTMm5BbCtCaE44T0VlOUNDdkRIQ1ZCRFpBd2NhK1NjZTJOaGFteHJjWEZDOTN5R2pDK3oxb2w4d0xvZSJ9

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CEO Mark Bertolini credits Medicare market, which he wants to expand in 2018.

Aetna’s government business in Medicare and Medicaid, and its exit from numerous Affordable Care Act exchange markets helped propel the insurer’s second quarter profits by 52 percent over last year.

Aetna reported second quarter profits of $1.2 million, compared to $791,000 for the same period in 2016.

“Specifically, operating results in our government business remain robust with government premiums representing more than half of the total healthcare premiums,” CEO Mark Bertolini said during the August 3 earnings call. “Medical cost trends remain moderate and we experienced favorable development of prior period healthcare cost estimates across all of our core products in the quarter.”

Helping to cut medical claims costs was a decision by the Hartford, Connecticut-based insurer to cut its participation in the ACA market from 15 states last year to a current four states.

In June, Aetna submitted bids to the Center for Medicare and Medicaid Services to expand Aetna’s reach from 56 percent of the Medicare population to 60 percent in 2018, according to Bertolini.

“As we discussed previously, our goal is to accelerate our geographic expansion in 2019 and beyond to serve more of this growing population,” Bertolini said. “Continuing on with our government business. Medicaid delivered another solid quarter, including stable revenue and underwriting results compared to the prior-year period, despite the exit from Missouri during the quarter.”

Aetna serves approximately 2.1 million Medicaid members, a decrease of approximately 250,000 compared to last year, due to its exit from the Missouri Medicaid program.

“Based on our continued outperformance, we are once again increasing our full-year 2017 earnings projections,” Bertolini said.

CMS Finalizes 2018 Meaningful Use Requirement Flexibilities

https://ehrintelligence.com/news/cms-finalizes-2018-meaningful-use-requirement-flexibilities?elqTrackId=8c2c1a1e8db84c7ca8e1b67ce5b14336&elq=2d2e530ff2ce491481cadbe37c8b232e&elqaid=3157&elqat=1&elqCampaignId=2929

CMS revises 2018 meaningful use requirements

Revisions include a 90-day reporting period, exceptions for decertified EHR technology, and acceptable versions of certified EHR technology.

As part of a final rule for hospital inpatient reimbursement for 2018, CMS has also finalized a host of revision to the meaningful use requirements for eligible providers participating in the EHR Incentive Programs next year.

Chief among the revisions is the reduction of the EHR reporting period next year to 90 days for “new and returning participants attesting to CMS or their Stage Medicaid agency,” states the final rule to be published on August 14. The revised reporting period must comprise a continuous 90 days between Jan. 1, 2018 and Dec. 31, 2018.

According to the final rule, the motivation for finalizing revisions to meaningful use requirements in 2018 is “to continue advanced of certified EHR technology utilization, focusing on interoperability and data sharing.”

Many of the other finalized changes owe much to mandates included in the 21st Century Cures Act, such as an exception for Medicare payments adjustments for eligible professionals and hospitals affected by EHR decertification. For those providers unable to satisfy meaningful use requirements because their certified EHR technology is now or becomes decertify, they will be able to avoid meaningful use penalties (but also miss out on EHR incentives). EPs will have until Oct. 1, 2017 to submit their applications; hospitals, July 1, 2017 — barring further changes made by CMS.

Additionally, EPs who provide “substantially all” of their services in ambulatory surgical centers (ASC) will avoid Medicare payment adjustments in 2017 and 2018:

We proposed to define an ASC-based EP under § 495.4 as an EP who furnishes 75 percent or more (or alternatively, 90 percent or more) of his or her covered professional services in sites of service identified by the codes used in the HIPAA standard transaction as an ASC setting in the calendar year that is two years before the payment adjustment year. In addition, we proposed to use Place of Service (POS) Code 24 to identify services furnished in an ASC and requested public comment on whether other POS codes or mechanisms should be used to identify sites of service in addition to or in lieu of POS code 24. For the reasons discussed in section IX.G.4. of the preamble of this final rule, we are finalizing the definition of an ASC-based EP as an EP who furnishes 75 percent or more of his or her covered professional services in sites of service identified by POS 24.

As for the type of CEHRT required for meaningful use attestation, CMS has finalized a policy that allows eligible professionals to use 2014 Edition, 2015 Edition, of a combination of the two for the purposes of EHR reporting in 2018.

That being said, the federal agency determined that calls to revise meaningful use objectives and measures, meaningful use audits, the Merit-Based Incentive Payment System (MIPS), and CEHRT grant funding were beyond the scope of the final rule and therefore not met.

The federal agency faced considerable pushback from industry groups advocating for significant change to the EHR Incentive Programs. Last month, the American Hospital Association (AHA) called for the cancellation of Stage 3 Meaningful Use, which is set to begin in 2018. The association claimed that the phase’s meaningful use requirements were overly burdensome.

“These excessive requirements are set to become even more onerous when Stage 3 begins in 2018,” AHA stated in a letter to CMS. “They also will raise costs by forcing hospitals to spend large sums upgrading their EHRs solely for the purpose of meeting regulatory requirements.

Based on this final rule, the EHR Incentive Programs will carry on as planned.

Most Significant Epic, Cerner Health IT Achievements of 2017

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Epic EHR, Cerner EHR

 

Epic and Cerner continue to dominate the healthcare industry and this year the two health IT companies have made key additions to their portfolios.

Epic Systems and Cerner Corporation solidified their status as top dogs in the health IT industry in 2017.

Both health IT companies scored massive contracts this year, with Epic continuing to gain popularity among the private sector and Cerner expanding its presence in the public sphere.

Cerner and Epic have also found success expanding their health IT offerings into other areas of care management, including population health and revenue cycle management. The companies have proven their ability to stay ahead of the curve by continuing to add more products and technologies to their arsenal in keeping with developments in the industry.

Over midway through 2017, here are a few of the most significant achievements of the year by the biggest players in health IT:

Florida Medicaid managed care demonstration gets 5-year extension

http://www.healthcaredive.com/news/florida-medicaid-managed-care-demonstration-gets-5-year-extension/448610/

Dive Brief:

  • CMS approved a five-year extension of Florida’s section 1115 demonstration of a capitated Medicaid managed care program and low-income pool to support uncompensated care.
  • The uncompensated care pool will receive about $1.5 billion annually, based on the most current data on hospitals’ charity care costs, according to an Aug. 3 letter from CMS Administrator Seema Verma to Justin Senior, secretary of the Florida Agency for Health Care Administration.
  • The Managed Medical Assistance (MMA) demonstration, which now runs until June 2022, is the first to include simplified reporting requirements. CMS said it will monitor progress toward state-selected benchmarks and partner with the state to develop a meaningful program evaluation.

Dive Insight:

The modifications are in line with President Donald Trump’s administration’s pledge to reduce what it sees as burdensome or duplicative state reporting activities and with the CMS’ commitment to partner with states to improve their Medicaid programs.

In a March 14 letter, HHS Secretary Tom Price and Verma reminded states they can apply for waivers that would allow for significant changes to their Medicaid programs. States must show their waiver promotes the objectives of the Medicaid program, but HHS has broad authority for approval and Price has indicated he intends to broaden their use.

The CMS had been winding down funding for the Florida program under President Barack Obama’s administration. Officials at the time said the state should expand Medicaid under the Affordable Care Act to help with uncompensated care costs. They gave Florida $600 million for the final year of the program, far less than the about $2 billion requested.

The amount of funding now being provided offers a pretty clear indication the CMS under Trump thinks Florida is on the right track without expansion.

More than 30 states currently have waivers. Alabama received CMS approval in February for a section 1115 demonstration waiver to shift a majority of its Medicaid beneficiaries into regional care organizations, akin to accountable care organizations. While there are other states using this strategy, Alabama is unique in that it’s being administered by provider-run nonprofit organizations rather than a major insurer.

Patient advocacy groups have voiced alarm at potential steep cuts to Medicaid. Trump’s proposed $4.1 trillion budget would slash $610 billion from Medicaid plus 20% of funding for the Children’s Health Insurance Program. Robert Greenstein, president of the Center on Budget and Policy Priorities, said Trump’s budget would increase the number of uninsured and narrow Medicaid benefits and eligibility. This would lead to higher uncompensated care costs for hospitals.

Cigna latest major payer to post strong Q2

http://www.healthcaredive.com/news/cigna-latest-major-payer-to-post-strong-q2/448675/

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Dive Brief:

  • Cigna reported strong second-quarter earnings Friday, which included a 4% increase in total revenues compared to a year ago to $10.3 billion.
  • In announcing its earnings, Cigna also raised its 2017 earnings forecastfrom between $9.35 and $9.85 to between $9.75 and $10.05 per share. Experts had predicted $9.77.
  • With Cigna’s announcement, six major health insurers have beaten Wall Street expectations in the second quarter, despite the healthcare debate in Washington and uneasiness in the Affordable Care Act exchanges.

Dive Insight:

Cigna’s positive results are yet another second-quarter success for payers. In recent days, Aetna raised its outlook after a strong quarter, Humana beat its earnings predictions, Anthem posted strong results and UnitedHealth announced that its revenue grew 8% from last year.

For Cigna, the payer’s adjusted income from operations increased to $750 million compared to $515 million last year, which Cigna said “reflects significantly increased earnings contributions from each of our business segments.”

Premiums and fees increased 3% compared to a year ago, which was “driven by customer growth and specialty contributions in our commercial business.” Cigna reported that its financial results for its commercial insurance projects more than offset a drop in revenue from government products because of lower enrollments in those programs.

Cigna’s positive second-quarter numbers may lead to M&A activity, especially regarding Medicare Advantage (MA). Cigna Chief Executive David Cordani said in June the payer has between $7 billion and $14 billion that it may use on mergers and acquisitions this year. That money may go to expanding its MA offerings. Corandi declined to say in June whether Cigna is looking to buy Humana, which is the second-largest MA payer, or whether it may acquire or merge with other companies.

Regardless, you can expect Cigna to grow its MA market in the coming months after the CMS lifted Cigna’s suspension to sell MA and Medicare Part D plans in June. The suspension came after CMS found issues with Cigna’s appeals and grievances processes, Part D, formulary and benefits administration. The CMS restricted Cigna for 18 months, which the company said cost them at least $500 million.

Also, earlier this year, a proposed $54 billion merger proposal with Anthem  failed. Despite the failed merger, Humana reported $1.1 billion net income in the first quarter compared to $254 million last year. At the time, Humana officials pointed to the failed merger with Anthem as a major reason for the net income increase and Bruce D. Broussard, Humana’s president and chief executive officer, especially highlighted MA as a positive.

After the merger failed, Cigna filed a lawsuit against Anthem that seeks more than $13 billion in damages and a $1.85 billion contractual breakup fee. Anthem is protesting both payments.

HHS general counsel candidate vows to uphold ACA

http://www.healthcaredive.com/news/hhs-general-counsel-candidate-vows-to-uphold-aca/448682/

Dive Brief:

  • During his nomination hearing in front of the Senate Finance Committee, Robert Charrow, who is a candidate for general counsel to the HHS, told senators he will resist changes to the Affordable Care Act (ACA) as long as it is law.
  • Charrow, who is an attorney with the international law firm of Greenberg Traurig, said he is a “firm believer in applying the law as written and passed by Congress. And if an action is inconsistent with the law, I will not approve it.”
  • The hearing, which also included the nominee for HHS assistant secretary for legislative affairs, Matthew Bassett, comes as the Government Accountability Office is looking into the use of official HHS communication channels to promote ACA repeal legislation.

Dive Insight:

While all of the Republican attempts to repeal the ACA have thus far failed, its supporters are still worried about threats, including from President Donald Trump, to sabotage the exchange markets. Trump said he wanted the ACA to “implode” and force senators to the negotiating table.

Charrow’s expressed willingness to defend the ACA could certainly come into play if he is approved. His boss would be HHS Secretary Tom Price, who is a vocal opponent of the ACA. If confirmed, Charrow may need to stand up to both his boss and the president.

The most immediate concern for the ACA is cost-sharing reduction (CSR) payments to payers, which Trump called a “bailout” for insurance companies. Payers say that without those subsidies they will need to raise rates or leave the ACA market. Because of the uncertainty, some payers have increased rates by more than 20% for 2018, dropped out of the market or cut down on their footprint.

The issue appears to be in limbo for now, with Congress out for its annual summer break and Trump beginning a 17-day vacation.

The Senate Finance Committee didn’t vote on the Charrow’s nomination, but we’ll soon know whether his statements were enough to quell Democratic fears.