Health Plans

Datapoint: Regence Partners With MultiCare Health System on New ACO

January 6, 2021

Regence, one of the largest Blues affiliates in the U.S., on Dec. 23 said it has formed a new value-based partnership with MultiCare Health System. The partnership will make use of innovative data-sharing platforms to improve interoperability and patient outcomes. MultiCare’s ACO unit, MultiCare Connected Care, serves 120,000 lives in its 16 value-based partnerships, according to a press release. Regence’s four regional subsidiaries currently serve 1,856,867 members throughout the Pacific Northwest and Rocky Mountain states.

Regence, one of the largest Blues affiliates in the U.S., on Dec. 23 said it has formed a new value-based partnership with MultiCare Health System. The partnership will make use of innovative data-sharing platforms to improve interoperability and patient outcomes. MultiCare’s ACO unit, MultiCare Connected Care, serves 120,000 lives in its 16 value-based partnerships, according to a press release. Regence’s four regional subsidiaries currently serve 1,856,867 members throughout the Pacific Northwest and Rocky Mountain states.

Source: AIS’s Directory of Health Plans

Datapoint: Oscar Plots Initial Public Offering

January 5, 2021

Insurance startup Oscar on Dec. 21 announced it is preparing an initial public offering of its common stock, “expected to commence after the completion of the SEC review process, subject to market and other conditions,” according to a press release. The insurer is undertaking a hefty expansion in 2021, bringing its individual commercial product offerings to 19 new markets. Oscar currently enrolls 416,998 members, with 95.5% enrolled in individual plans.

Insurance startup Oscar on Dec. 21 announced it is preparing an initial public offering of its common stock, “expected to commence after the completion of the SEC review process, subject to market and other conditions,” according to a press release. The insurer is undertaking a hefty expansion in 2021, bringing its individual commercial product offerings to 19 new markets. Oscar currently enrolls 416,998 members, with 95.5% enrolled in individual plans.

Source: AIS’s Directory of Health Plans

Wall Street Is Optimistic About Health Insurance Industry, Expects More M&A in 2021

January 5, 2021

Equities analysts are bullish on the health insurance industry in 2021, despite the challenges caused by the COVID-19 pandemic. Wall Street also expects more mergers and acquisitions will take place in 2021 than the previous year.

“Prior to 2020, the industry had already posted several years of record earnings, leading to higher absolute and risk-adjusted capitalization levels, trends that full-year results are likely to further support,” wrote AM Best analyst Doniella Pliss in the firm’s 2021 outlook for health insurers. “In addition, amid a severe level of economic uncertainty, the industry accumulated substantial cash balances, leading to stronger liquidity metrics. These factors make the industry well prepared to withstand the anticipated challenges and further uncertainties of 2021.”

By Peter Johnson

Equities analysts are bullish on the health insurance industry in 2021, despite the challenges caused by the COVID-19 pandemic. Wall Street also expects more mergers and acquisitions will take place in 2021 than the previous year.

“Prior to 2020, the industry had already posted several years of record earnings, leading to higher absolute and risk-adjusted capitalization levels, trends that full-year results are likely to further support,” wrote AM Best analyst Doniella Pliss in the firm’s 2021 outlook for health insurers. “In addition, amid a severe level of economic uncertainty, the industry accumulated substantial cash balances, leading to stronger liquidity metrics. These factors make the industry well prepared to withstand the anticipated challenges and further uncertainties of 2021.”

“Many of our rated issuers have grown their scale significantly over recent years, taken market share and added capabilities. The evolution of business profiles is credit positive,” wrote Moody’s Investors Service analyst Marc Pinto.

“We expect insurers to continue to acquire non-regulated health service businesses to deepen vertical integration, but large transformative deals are unlikely,” Pinto explained. “Smaller, tuck-in insurance acquisitions to improve geographic diversification or under-scaled businesses are more likely. We expect leverage to improve in the absence of outsized M&A.”

Analysts also projected a more stable political and regulatory environment with the departure of the Trump administration, and they observed that a split Congress is unlikely to pass major health care reform legislation. Further, they expect that the Supreme Court will not strike down the Affordable Care Act in its pending decision on California v. Texas.

However, analysts emphasized that the pandemic is far from over, and no one can say for certain what level of care utilization to expect. When utilization dropped in the second quarter of 2020, carriers’ earnings spiked dramatically. A similar, if smaller, phenomenon could take place early in 2021.

“We expect the COVID pandemic to linger into 2021 with more sluggish utilization in [the first half of the year],” wrote Citi analyst Ralph Giacobbe in his 2021 health care outlook. However, he predicted that the second half of the year was “more likely to show accelerating utilization/spending as individuals gain comfort as we get broader administration of the vaccine.”

Datapoint: UnitedHealthcare, Intermountain Launch ACO

January 4, 2021

Intermountain Healthcare and UnitedHealth Group on Dec. 16 unveiled a new partnership — a Medicare Advantage accountable care organization (ACO) in Utah. United’s Medicare Advantage members who receive care from Intermountain physicians throughout Utah are eligible for the ACO. Intermountain’s physicians will receive outcomes-based payments from United, and United will also provide patient-level data on members’ previous hospital visits and chronic health needs to Intermountain’s value-based care subsidiary, Castell. United currently serves 92,111 MA lives in Utah.

Intermountain Healthcare and UnitedHealth Group on Dec. 16 unveiled a new partnership — a Medicare Advantage accountable care organization (ACO) in Utah. United’s Medicare Advantage members who receive care from Intermountain physicians throughout Utah are eligible for the ACO. Intermountain’s physicians will receive outcomes-based payments from United, and United will also provide patient-level data on members’ previous hospital visits and chronic health needs to Intermountain’s value-based care subsidiary, Castell. United currently serves 92,111 MA lives in Utah.

Source: AIS’s Directory of Health Plans

Surprise Medical Billing Comes to An End, Insurers Oppose Arbitration Mechanism

December 30, 2020

After years of failed attempts, Congress has finally come to an agreement on a measure to end the practice of surprise medical billing.

Surprise billing, also known as balance billing, is the practice of charging patients for out-of-network procedures that insurers refuse to pay for in whole or in part. Often, patients incur these balance bills without their knowledge. The new legislation would ban providers from sending such a bill to patients, and would instead require providers to negotiate reimbursement with the patient’s insurer or submit the dispute to a binding arbitration process.

By Peter Johnson

After years of failed attempts, Congress has finally come to an agreement on a measure to end the practice of surprise medical billing.

Surprise billing, also known as balance billing, is the practice of charging patients for out-of-network procedures that insurers refuse to pay for in whole or in part. Often, patients incur these balance bills without their knowledge. The new legislation would ban providers from sending such a bill to patients, and would instead require providers to negotiate reimbursement with the patient’s insurer or submit the dispute to a binding arbitration process.

Providers will have 30 days from the day of the procedure to negotiate a compromise reimbursement amount with payers. If the parties can’t agree, they must submit their preferred reimbursement amounts to an HHS-approved arbitrator, who will pick one of the two amounts.

Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, praised the legislation as “closer to the ideal, consumer-friendly solution” than previous attempts to address the issue.

“It’s very likely that this bill reduces premiums,” says Adler, who has contributed to research that found surprise billing increases health care costs.

Insurance stakeholders are displeased that surprise bills will be resolved through arbitration. Instead of arbitration, America’s Health Insurance Plans had lobbied for out-of-network reimbursement to be tied to a benchmark rate.

Adler thinks that insurers’ objections to arbitration are overblown, and he argues carriers will gain leverage in balance billing negotiations because of the legislation.

“It seems pretty easy for an insurer or a [plan sponsor] company to call a provider’s bluff,” Adler says, citing rules in the bill that he thinks will prevent providers from abusing the arbitration system.

Dan Mendelson, founder of Avalere Health, is more skeptical about the bill’s potential to reduce costs and slow premium inflation, since it will require new administrative costs.

“There is no question that whenever you force more cost into the system, it’s going to be reflected in consumer cost,” Mendelson explains. “So there will be a premium effect. Will people actually be able to differentiate it from the typical rise in costs? No….I do expect that it will have an effect, just from an economics standpoint.”

Datapoint: Blue Cross Blue Shield of Michigan Partners With Senior-Focused Clinics

December 29, 2020

Blue Cross Blue Shield of Michigan on Dec. 14 unveiled a new value-based partnership with Dedicated Senior Medical Centers, a provider-led group of six primary care centers arriving in Michigan’s Wayne County throughout 2021. Dedicated is a subsidiary of ChenMed. BCBSMI’s Medicare Advantage members will be able to access services at Dedicated’s medical centers, which focus on whole-person health, interdisciplinary care coordination and addressing social needs. BCBSMI is currently the seventh-largest Medicare Advantage insurer in the U.S., with 585,540 members.

Blue Cross Blue Shield of Michigan on Dec. 14 unveiled a new value-based partnership with Dedicated Senior Medical Centers, a provider-led group of six primary care centers arriving in Michigan’s Wayne County throughout 2021. Dedicated is a subsidiary of ChenMed. BCBSMI’s Medicare Advantage members will be able to access services at Dedicated’s medical centers, which focus on whole-person health, interdisciplinary care coordination and addressing social needs. BCBSMI is currently the seventh-largest Medicare Advantage insurer in the U.S., with 585,540 members.

Source: AIS’s Directory of Health Plans