Tag Archives: Health Insurance Industry

Anthem loses Cigna takeover appeal

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http://www.healthcaredive.com/news/anthem-cigna-merger-over/441551/

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Dive Brief:

  • The U.S. Court of Appeals on Friday upheld a decision to block the $54 billion merger between insurance giants Anthem and Cigna.
  • A federal judge ruled in February that the combined company would result in reduced competition in the national health insurance market, agreeing with the U.S. Department of Justice, which brought the antitrust case last July. Anthem filed an appeal to reverse the decision later that month.
  • In a 2-1 decision, the court ruled Anthem had failed to “show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger.”

Dive Insight:

Unless Anthem takes it to the Supreme Court, this is the end of the deal after several months of contentious debates and infighting among the two health insurance giants.

The healthcare industry has been closely watching the case. The American Medical Association was quick to issue a statement applauding the decision from the Court of Appeals. “The appellate court sent a clear message to the health insurance industry: a merger that smothers competition and choice, raises premiums and reduces quality and innovation is inherently harmful to patients and physicians,” said AMA President Andrew W. Gurman.

Cigna has been wanting to end the merger plans for months. After the merger was first blocked, Cigna filed a lawsuit against Anthem seeking at least $14 billion in damages, which is a lot more than the $1.85 billion contractual breakup fee. It also asked for a statement that Cigna had lawfully terminated the deal.

Anthem was granted a temporary restraining order against Cigna shortly thereafter. The infighting certainly did not help support Anthem-Cigna’s argument that it would effectively implement the claimed efficiencies that would benefit consumers.

Earlier this week, Anthem filed a motion with the Delaware Court of Chancery for a preliminary injunction that would block Cigna from terminating the deal on April 30, which is the contractual deadline.

Anthem and Cigna could soon end their plan to merge. Once it’s over, it will be “harder for either Anthem or Cigna to do another deal that involves a combination of another large insurer,” Mitchell Raup, an antitrust attorney from Polsinelli, told Healthcare Dive. “They would have to convince the Department of Justice or perhaps a court that the next deal is not like this deal, that the judge’s opinion about this deal doesn’t apply to the next deal.”

Also this week, Anthem released first quarter 2017 earnings showing it beat projections with $1 billion in net income. It also said it would cautiously begin work on 2018 rates for the Affordable Care Act exchanges. Anthem and other payers, however, are still anxiously awaiting word from the President Donald Trump administration on whether it will continue the cost-sharing reduction subsidies.

Healthcare Dive requested comments from both payers. Anthem has not yet sent a statement. Cigna, through a company lawyer, said it has no comment at this time. An 8-K Cigna filed earlier today just states that it “continues to work through the litigation process in the pending Delaware Court of Chancery matter involving Cigna and Anthem, including the preliminary injunction hearing scheduled for May 8, 2017.”

UnitedHealth Group’s operating earnings rise 15% in Q1: 6 things to know

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http://www.beckershospitalreview.com/payer-issues/unitedhealth-group-s-operating-earnings-rise-15-in-q1-6-things-to-know.html

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Minnetonka, Minn.-based UnitedHealth Group saw revenue and earnings from operations increase in the first quarter of fiscal year 2017 despite its widespread withdrawal from the ACA individual marketplace this year.

Here are six highlights from the payer’s financials for the quarter ended March 31.

1. UnitedHealth reported first quarter revenues of $48.7 billion, reflecting a 9.4 percent year-over-year increase.

2. The payer’s consolidated first quarter revenues were reduced by $1.6 billion due to its large-scale exit from 34 of the ACA individual markets it participated in 2016 and the 2017 health insurance tax deferral.

3. UnitedHealth recorded a 15 percent year-over-year increase of earnings from operations, from $2.96 billion in the first quarter of  FY 2016 to $3.4 billion in the first quarter of FY 2017.

4. UnitedHealthcare, the health insurance arm of UnitedHealth, recorded $40.1 billion in revenues for the first quarter, up 11.8 percent from the first quarter of FY 2016. Its membership grew by 730,000 policyholders during the same period. The health insurer also saw its first quarter earnings from operations increase 15 percent year-over-year to $2.1 billion. UnitedHealthcare attributed the growth to increased operating margins.

5. UnitedHealth’s health services platform Optum saw earnings from operations increase 15.6 percent year-over-year to $1.3 billion on revenue of $21.2 billion. Of Optum’s three segments, its advisory consulting arm OptumInsight reported the largest revenue growth at 10.6 percent year-over-year due to increases in revenue management, business process and technology services.

6. UnitedHealth Group raised its full-year 2017 financial outlook and now expects about $200 billion in revenue and adjusted net earnings of $9.65 to $9.85 per share.

 

Aetna, UnitedHealth show increasing appetite for value-based care contracts

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http://www.healthcarefinancenews.com/news/wisconsin-hospitals-slash-readmission-rates-penalties-through-partnerships-hospital-association

Aetna has long held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020.

The biggest health insurers are moving quickly towards to value-based care arrangements, their recent earnings reports show.

While Aetna has long-held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020, Aetna’s medical spend is now 45 percent tied to value, CEO Mark Bertolini said during last week’s fourth quarter earnings call.

“One way we measure our success is by how well we are able to keep our members out of the hospital and in their homes and communities,” Bertolini said. “For example, in 2016, we reduced total acute admissions by approximately 4 percent, and we deployed predictive modeling to target members at the greatest risk of readmission.”

Aetna has achieved a 27 percent reduction in readmission rates using multidisciplinary care teams that engage facilities to develop effective discharge plans, he said.

DOJ joins whistleblower lawsuit against UnitedHealth Group, WellMed

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http://www.healthcarefinancenews.com/news/doj-joins-whistleblower-lawsuit-against-unitedhealth-group?mkt_tok=eyJpIjoiWXpVMk16RXlNV00zTm1OayIsInQiOiIzS3NXdllRRU1HNHZlb0Q1aVBYV0hFazRSbGk4dWc3S0FvZERGbHJDeW53Z2ZTb0xCdFhhWEVPcHBBUlVcLytBR1dkTTF0cElHTDRxU0NMSXJ0bWhQUUNvSzl1TVFtaVh2SUhiYkxNTVozNW54SmJCRXhCWDhZT2VGcGNGNlZSdXYifQ%3D%3D

The Department of Justice has joined a whistleblower lawsuit against UnitedHealth Group and subsidiary WellMed Medical Management, claiming the insurer allegedly defrauded Medicare of hundreds of millions in risk adjustment payments.

UnitedHealth Group is accused of improperly inflating risk scores for Medicare Part C managed care and Part D prescription drug payments by claiming its members were treated for conditions they either did not have or were not treated for, according to the lawsuit.

The suit was originally brought in 2011 by a whistleblower through attorney Constantine Cannon in San Francisco.

The civil case names UnitedHealth Group, WellMed Medical Management, Health Net, Arcadian Management Services, Tufts Associated Health Plans, Aetna, Blue Cross and Blue Shield of Florida, Blue Cross Blue Shield of Michigan, Health, Inc., EmblemHealth, Inc., Managed Health dba Healthfirst New York, Humana, Medica Holding Company, WellCare Health Plans and MedAssurant.

All of the organizations are still named as defendants in the civil case, according to Jessica Moore, co-lead counsel on the case. The DOJ intervened only in the case against UnitedHealth Group and WellMed.

 

A bleak week for Obamacare

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http://www.politico.com/story/2017/02/obamacare-trump-congress-repeal-replace-235074

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Aetna’s CEO sees a ‘death spiral’ and the Trump administration’s stabilization plan may be too little, too late.

 

Cigna ends merger with Anthem, sues for more than $14B

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http://www.fiercehealthcare.com/payer/cigna-ends-merger-anthem-sues-for-more-than-14b?mkt_tok=eyJpIjoiTm1Nd1lUTXdNRGxsTm1SaCIsInQiOiJqVTFQMklENmVyckE1T0RUUVdJOXlXUmVQS21VY09IR0dcL2VlUnEwd09Fa0tlamZhdUtDM21zc0gwMFZcL01xYmllZmVoWjJib3U4aUFxNU11NDk3YUZNM1J1UndFQ1k3NlE1cTZ4UU5mS0hjMlF0b29mRkZUSldXT1I0QkFQQ0NZIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Lawsuit document

In a move that defies Anthem’s push to fight for their deal, Cigna has terminated its merger agreement with Anthem and filed suit against the larger insurer.

Earlier this month, a federal judge ruled against the two insurers’ planned merger, saying it would violate antitrust law by lessening competition in the national accounts market. Anthem responded by saying it intends to appeal the ruling.

But in a statement issued Tuesday, Cigna said that given the court’s decision, it “believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna’s shareholders.”

Thus, Cigna filed a suit against Anthem in the Delaware Court of Chancery, seeking a declaratory judgment that Cigna has lawfully terminated the merger agreement and that Anthem is not permitted to extend the termination date.

The suit also asked the court to compel Anthem to pay Cigna the $1.85 billion termination fee outlined in the merger agreement, plus additional damages of more than $13 billion. Those damages “include the lost premium value to Cigna’s stockholders caused by Anthem’s willful breaches of the merger agreement,” according to a question-and-answer document filed with the Securities and Exchange Commission.

For its part, Anthem maintains that “under the terms of the merger agreement, Cigna does not have a right to terminate the agreement. Therefore, Cigna’s purported termination of the merger agreement is invalid,” a company spokesperson said in an emailed statement. “Anthem will continue to enforce its rights under the merger agreement and remains committed to closing the transaction.”

Centene to stay on ACA exchanges; WellCare grows Medicaid membership

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http://www.fiercehealthcare.com/payer/centene-to-stay-aca-exchanges-wellcare-adds-medicaid-members?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiTnpFeU1tVmxaV00yWmpRMCIsInQiOiJxQk1keWdtNzdGSUZvT2huUTZiZFJ4SDl4akhmRG1wMGE4ZzV2eGtIUXNmUGJ1TTJjbTRxRTJ4cjNcL3NvVWNZZUZlRWxnMnh2bHJVdiswWmVFR3VcL2l3RmpwWXFaZ3JBUG4ya3oyVGp5bHNoUjl4dU1wUnNNYWpTZmc1TURcL09LbyJ9

finance earnings

Unlike some of the other major for-profit health insurers, Centene has no plans to consider exiting the Affordable Care Act exchanges in 2018.

“I’m not backing off at all,” CEO Michael Neidorff said during the company’s fourth-quarter earnings call Tuesday. In recent discussions with the company’s board members, he said, “everybody is of one mind; you maintain business as usual.”

Recently, the CEOs of Anthem and Cigna both indicated they are still deciding whether to participate on the exchanges in 2018. Aetna, meanwhile, does not plan to re-enter any markets in 2018 after pulling out of many in 2017.

As of Dec. 31, Centene served about 540,000 exchange members, in line with its expectations, and it anticipates having a little more than 1 million paid members in 2017. Indications are that the demographics of these members will be consistent with years past, with 90% of them subsidy-eligible and most on silver-tier plans, Neidorff said.

While Centene is folding an “extra level of conservativism” into its expectations for its exchange products to guard against any uncertainty, it continues to expect that line of business to be profitable this year, he added.

Another ACA provision, Medicaid expansion, has also proved profitable for Centene. At the end of 2016, it had 1,080,500 members in Medicaid expansion programs in 10 states, compared to 449,000 members at the end of 2015, according to the company’s earnings statement.

 

Aetna, UnitedHealth show increasing appetite for value-based care contracts

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http://www.healthcarefinancenews.com/news/aetna-unitedhealth-show-increasing-appetite-value-based-care-contracts?mkt_tok=eyJpIjoiWmpKaE5ETXhZVGc0TkdJNSIsInQiOiJjWXBGUGRYOWwySVVDRnRsdjhpOTJEK09yNSt1dzcyN1d0TmNucCtzN1A4cWlVcGl2NmM3M1wvR0lYQjRUa3ZQdzd2b2g4ZnFQWFRlYVhBMFwvY3I2VFlJaEVkdXhlODhNSGk4VUpVempaVUloZVBmRjRtekZXQ1ZGYVdjNFRJdkZRIn0%3D

Aetna has long held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020.

The biggest health insurers are moving quickly towards to value-based care arrangements, their recent earnings reports show.

While Aetna has long-held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020, Aetna’s medical spend is now 45 percent tied to value, CEO Mark Bertolini said during last week’s fourth quarter earnings call.

“One way we measure our success is by how well we are able to keep our members out of the hospital and in their homes and communities,” Bertolini said. “For example, in 2016, we reduced total acute admissions by approximately 4 percent, and we deployed predictive modeling to target members at the greatest risk of readmission.”

Aetna has achieved a 27 percent reduction in readmission rates using multidisciplinary care teams that engage facilities to develop effective discharge plans, he said.

“Collectively, these clinical programs have driven a best-in-class Stars readmission rate among national competitors,” he said.

Aetna sees more opportunities for reducing utilization over the long-term in readmission rates, and in a reduction in inpatient days. Unit price is still the driver in value-based purchasing, Bertolini said.

“I think value-based contracting is going to continue to be encouraged by even the current administration as a way of getting a handle on healthcare costs,” he said. “We have a healthy pipeline of opportunities. They will not all be joint ventures. I think there are other models emerging.”

UnitedHealthcare is increasingly helping states manage care for their complex, vulnerable and most costly populations, as well as assisting employers with programs to support the needs of retirees and employees with chronic conditions, according to CEO Stephen Hemsley in the insurer’s earnings report.

Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA

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Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA

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Brief

Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten.1  That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. To what extent people with pre-existing health conditions are protected is likely to be a central issue in the debate over repealing and replacing the ACA.

This brief reviews medical underwriting practices by private insurers in the individual health insurance market prior to 2014, and estimates how many American adults could face difficulty obtaining private individual market insurance if the ACA were repealed or amended and such practices resumed.  We examine data from two large government surveys: The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), both of which can be used to estimate rates of various health conditions (NHIS at the national level and BRFSS at the state level). We consulted field underwriting manuals used in the individual market prior to passage of the ACA as a reference for commonly declinable conditions.

Discussion

The Affordable Care Act guarantees access to health insurance in the individual market and ends other underwriting practices that left many people with pre-existing conditions uninsured or with limited coverage before the law. As discussions get underway to repeal and replace the ACA, this analysis quantifies the number of adults who would be at risk of being denied if they were to seek coverage in the individual market under pre-ACA rules. What types of protections are preserved for people with pre-existing conditions will be a key element in the debate over repealing and replacing the ACA.

We estimate that at least 52 million non-elderly adult Americans (27% of those under the age of 65) have a health condition that would leave them uninsurable under medical underwriting practices used in the vast majority of state individual markets prior to the ACA. Results vary from state-to-state, with rates ranging around 22 – 23% in some Northern and Western states to 33% or more in some southern states. Our estimates are conservative and do not account for a number of conditions that were often declinable (but for which data are not available), nor do our estimates account for declinable medications, declinable occupations, and conditions that could lead to other adverse underwriting practices (such as higher premiums or exclusions).

While most people with pre-existing conditions have employer or public coverage at any given time, many people seek individual market coverage at some point in their lives, such as when they are between jobs, retired, or self-employed.

There is bipartisan desire to protect people with pre-existing conditions, but the details of replacement plans have yet to be ironed out, and those details will shape how accessible insurance is for people when they have health conditions.