BREAKING: Anthem Announces Intent to Acquire Cigna

Whenever I hear the notification of an email to my business account after 8pm on a Friday, I know it’ll be something juicy. Nice PR move: release something slightly controversial (or very controversial) on a Friday, hoping it will be forgotten by next Monday’s news cycle.

WELL, I received one such notification last night and to my surprise, the Subject Line says, “Cigna Anthem Announcement.” Cigna Anthem Announcement? But those are two different things? Well, apparently not for long if everything goes as they plan, with a merger deal on the table.  The announcement says they expect finalization of the merger in the second half of 2016. They state that the “combined company” will expand networks for patients and make care more accessible. Anthem already has a strong medicaid network which has become increasingly important with the Affordable Care Act. Cigna will be able to utilize this, while those covered by Anthem will now have access to Cigna’s broad network of specialty care.

Why does this matter and how will things change?

Cigna Anthem Merger

Cigna Anthem Merger

Well, for us here at In Charge Office Solutions and most people who deal with insurance companies daily, you get to know each insurance company and their medical policies, procedures, and authorization processes. Cigna and Anthem have been quite
different companies to deal with to this point, and should the acquisition go through it will be interesting to see how/if those things change.

Beyond this, the insurance industry is already a relatively narrow one with large, recognizable companies covering the majority of people. Small insurance companies are few and far between, and often cannot compete with the larger companies. When a person is offered insurance coverage through their employer, there are usually only two or three options. Does the industry really need to narrow the field even more, taking a major player out? It is doubtful another will rise in its place.

This brings me to the most important point: this is definitely not a done deal.

It faces scrutiny by the Department of Justice and the Federal Trade Commission who have to review the agreement for antitrust issues. It also was not well received in the business world, with shares falling for both companies.

Whether or not it does go through, the agreement is a sign of the changing times in the industry. With such rapid changes in regulations, it is inevitable that insurance companies will restructure and adapt. Adaptation has always been a necessity in our business, so we will continue to do just that.


2014 ACA Implementation: One Month In

Happy New Year!

With 2014 came the roll out of the “ACA compliant” health insurance plans. The Covered Ca website is up and running with enrollment far exceeding projections; the most recent figures released  show enrollment of 500,108 in 2013.

The new plans’ high deductibles and co-payments have been the focus of much discussion, but it looks as if the real issue may be low enrollment rate of Healthcare Providers in the networks. The combination of low provider enrollment with no out-of-network benefits leaves little option for the 500,000+ enrollees when it comes to their healthcare.

Why Not Join?

Providers are reluctant to join the networks for many reasons. When insurance plans shift more out of pocket responsibility to the patient, it becomes more difficult to recoup payment for services. Patients may not understand their benefits and why they have to pay out of pocket, and resistance is met. This is already common in the business of healthcare, but higher deductibles and co-payments will only exacerbate the issue. Putting too much focus on payment with the patient can make some providers feel the focus shift too far from care to business. It is a delicate balance.

In the same vein, many providers are reluctant to join because fee schedules are either unclear or unacceptable. Typically, PPO fee schedules hover near and slightly above Medicare, but many Covered California plans reimburse slightly above Medi-Cal rates. Medi-Cal rates are unsustainable for many practices in California, and many providers have opted out of Medi-Cal participation for years. Why then, would those same providers join networks reimbursing near the same? Without a large enough Provider Network, many patients will find themselves having to switch providers or wait long hours for care.

Affordable Care Act: It’s Here, Now What?

Lately it seems difficult for people to discuss the Affordable Care Act (ACA) without things turning political, but that is what we are going to try to do here. Like it or not, changes are coming and some have already taken place

Insurance companies have had to create new plans that align with the provisions of the ACA, and with those new plans come new provider networks. These networks are generally EPOs – Exclusive Provider Organizations – which carry no out-of-network benefits.  Blue Shield of California recently sent out a “Q&A” about their ACA compliant EPO highlighting the fact that any services provided by a non EPO provider will receive no benefit. If the percentage of EPO plans increases greatly, it will be more important than ever to check a patient’s benefits before they are seen and make sure your practice is a part of their network. Get new patient insurance information over the phone at the time the initial appointment is made, and make it a routine part of your office processes.

Since  many practices are also small businesses, the reform will affect them in multiple ways.  Many of my clients have already received notice that their employee’s health plans will need to be changed to comply with the ACA, and with those new plans come higher premiums. A higher bill is the last thing any business wants, BUT, if there are truly more insured patients (and that is the plan), the increase in patient flow may make up for the increase in cost to your business.

With so much information thrown at those of us in the healthcare industry, it is important to sift through it and stay informed. There will be parts of the ACA that necessitate a change in how your practice is run. Only time will tell how many of these changes will ultimately effect business, and more importantly, patient care.