Managed care

With FTC against deal, No. VA system gives up on acquisition

Mon, 09 Jun 2008 06:59:58 -0400

With the Federal Trade Commission coming out against the deal on antitrust grounds, Northern Virginia's five-hospital Inova Health System has given up on its plans to acquire Prince William Health System. The non-profit Inova system said it was giving up because the FTC challenge could easily have delayed the merger by as much as two years, a delay it apparently found unacceptable. In early May, the FTC filed an administrative complaint contending that adding Prince William Hospital would allow the Falls Church, VA-based Inova system to gain too much control of the region's hospital market, giving it enough leverage to force up managed-care reimbursement for inpatient services.

To learn more about the deal:
- read this Modern Healthcare article (reg. req.)

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FTC works to stop VA hospital merger
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FTC uses leverage to step up antitrust scrutiny
Economists call FTC's Evanston solution flawed

Kaiser, Health Net agree to reinstate 1,200 beneficiaries

Fri, 16 May 2008 06:59:58 -0400

Two of California's largest health plans have agreed to reinstate a total of roughly 1,200 patients whose policies were rescinded after they began incurring high medical expenses.

Under the terms of a settlement brokered by the California Department of Managed Health Care, patients whose insurance was rescinded by Kaiser Permanente or Health Net since 2004 will be allowed to buy a new policy regardless of their medical condition. As part of the deal, Kaiser has agreed to pay a $300,000 fine to the state without admitting wrongdoing, as well as making procedural changes which include developing simpler coverage applications to avoid applicant mistakes. The deal follows a $9 million judgment against Health Net won by a hair salon owner when the plan canceled her coverage while she was undergoing chemotherapy.

The Department of Managed Health Care is now trying to reach similar deals with other major health plans, including Anthem Blue Cross, Blue Shield and PacifiCare, which involve about 4,000 canceled policies.

To learn about the health plans' new deal:
- read this Los Angeles Times article

Related Articles:
Health Net fined $1 million for non-disclosure of cancellation bonuses
BC of California fined $1M for cancellations
WellPoint plan cited for cancellations
CA agency mulls review of policy cancellations

FTC resolves high-profile IL hospital antitrust dispute

Tue, 29 Apr 2008 06:59:58 -0400

The FTC has ruled that a pair of healthcare organizations based in Illinois will need to contract with managed care plans separately to win the agency's final approval for their merger. The combined entity, Evanston Northwestern, could have been broken up, but the FTC decided not to take that course. The organizations, Evanston Northwestern Healthcare and Highland Park Hospital, merged in 2000. Last year, the FTC affirmed an administrative law judge's decision that concluded that Evanston's acquisition of Northwestern was anticompetitive.The agency noted that prices rose 50 percent or more in certain cases after the merger, while prices at Highland Park had only risen 4 to 6 percent for many years prior to the merger. Evanston had contended, however, that the price increases occurred only because Highland Park had done poorly in managed care negotiations prior to the deal.

To learn more about the FTC decision:
- read this Chicago Triune piece

Related Articles:
Economists call FTC's Evanston solution flawed
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With cancellations, CA health plans show suicidal persistence

Fri, 18 Apr 2008 06:59:59 -0400

I've said this before, but heaven help me, I feel I need to say it again: What on earth do California's health plans think they're going to accomplish by engaging in all-out war with the state's top insurance industry regulators?

I understand that health plans need to protect their interests, and that they certainly can't afford to pay heavy medical bills for people who deliberately try to game the system. But in this case, the plans have gotten extremely clear direction from the state's Department of Insurance and the Department of Managed Health Care (not to mention the courts) that it's just not OK to routinely rescind policies when patients get sick.

However, that hasn't stopped the state's big players from their suicidal determination to fight the power. In feats of derring-do I can only compare to a Fortune 500 CFO flipping off the SEC, they simply keep doing what they're doing and insist that despite all evidence, they're in the right. It's not unlike the posture my five-year-old takes when he's broken the cookie jar and the crumbs and ceramic shards are all over the floor.

Truth be told, things are so extreme out there that it's almost like reality TV. Watch in amazement as HealthNet lies to regulators! Gasp as Blue Cross of California pays a $1 million penalty! Look on in awe as plan executives insist that retroactive cancellations for innocent mistakes are kosher! This is far more intriguing than "Real Life Housewives of Orange County."

The problem is, reality TV is entertainment, while this is a high-stakes game in which there are many losers--doctors, patients and some ways, the health plans themselves. With any luck, California's health plan executives will come to their senses at some point... though at the moment, I'm not very optimistic. - Anne

CA regulators begin broad review of policy cancellations

Fri, 18 Apr 2008 06:59:57 -0400

In a move that could cost health insurers untold dollars, and possibly change the dynamics of the individual coverage market, the California Department of Managed Health Care has begun reviewing thousands of individual policy cancellations by the state's five major health plans. The DMHC will turn over policies dropped by the plans to an independent arbiter, who will determine whether the policies were inappropriately canceled. If the policies were wrongly canceled, the DMHC will require the health plans to reinstate those patients, and what's more, to pay all of the patient's bills incurred while the patients didn't have coverage. Meanwhile, the DMHC is ordering Anthem Blue Cross, Kaiser Permanente and Blue Shield to immediately reinstate 26 patients whose policy cancellations, in its view, were wrong on their face.

This move is perhaps the boldest in a long string of actions the DMHC has taken to prevent the state's health plans from canceling individual policies when individuals incur high medical bills. The DMHC contends that canceling such plans because of innocent mistakes on applications is unlawful.

To learn more about the DMHC's review:
- read this Los Angeles Times article

Related Articles:
BC of California fined $1M for cancellations
Kaiser forced to reinstate coverage
HealthNet set goals, bonuses based on policy cancellations
Kaiser pushes for policy-cancellation rules

Los Angeles sues Anthem for individual policy cancellations

Thu, 17 Apr 2008 06:59:58 -0400

The Los Angeles city attorney has sued Anthem Blue Cross for allegedly canceling coverage of thousands of members after they filed large medical claims. In doing so, it's following the lead of the state's Department of Managed Health Care, which has conducted an ongoing campaign against such practices. City attorney Rocky Delgadillo contends that Anthem, its parent company WellPoint, and another subsidiary unlawfully revoked the policies of as many as 6,000 members. What's more, he argues that the plans' 500,000 individual policyholders have been defrauded, because their policies won't actually help them if they get sick. Delgadillo is seeking $2,500 per violation, or $5,000 if the victim is disabled or a senior--numbers that could amount to costs of more than $1 billion if the city wins its suit.

To learn more about the suit:
- read this Los Angeles Times piece

Related Articles:
LA files more patient dumping cases
HealthNet set goals, bonuses based on policy cancellations
CA regulators plan limits to health policy cancellations
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CA law would ban balance billing for ED services

Tue, 01 Apr 2008 07:59:55 -0400

California officials are considering new rules that would ban balance billing for ED services, due in part to struggles over the fees charged by emergency department doctors, radiologists and anesthesiologists. These physicians, in particular, haven't been satisfied with what the hospitals' managed care plans pay, and have been billing patients for the difference between what the insurer pays and what they charge. Though patients often pay the bills, legally the insurer is supposed to pay the provider for all but whatever co-pay the patient has agreed to in their contract. On orders from Gov. Arnold Schwarzenegger (R), the state's Department of Managed Health Care has been trying to work out a compromise between insurers and providers on the issue for two years, but has gotten nowhere.

Now, the DMHC has decided to handle the issue on its own terms, issuing new draft regulations prohibiting billing for services that are the responsibility of the health plan. Meanwhile, angry doctors say that this could result in their sending the entire bill to the patient in an attempt to force the patient to deal with the mess.

To learn more about the balance billing issue in California:
- read this Los Angeles Times piece

Related Articles:
Schwarzenegger orders end to balance billing. Report
Aetna, AMA fight over out-of-network payments. Report

ALSO NOTED: TN Medicaid to test e-prescribing program; NIH alerts patients of stolen personal information; and much more...

Tue, 25 Mar 2008 07:59:50 -0400

> Tennessee's Medicaid program and one of its Medicaid managed care providers have announced that they plan to kick off an e-prescribing pilot program in 13 of the state's rural counties. Report

> New calls for old drug data in the U.K. have experts second-guessing big drug-safety scandals. If scientists and regulators had had access to every bit of data on Vioxx from the get-go, for instance, would heart attacks and strokes have been averted? Report

> After waiting for nearly a month, officials at the NIH alerted some 2,500 people that their names, addresses and detailed personal health information gathered from heart scans in a clinical trial were purloined when an unknown person stole a government laptop with the data on it. Report

And Finally... Looks like breakfast really is the most important meal of the day. Article

CA bill requires permission for cancellations

Thu, 14 Feb 2008 06:59:56 -0500

A California legislator has introduced a bill which would require health insurers to get permission before they retroactively cancel one of their beneficiaries' coverage. Under the terms of the bill, health plans would need to get prior approval from the state's tough Department of Managed Health Care before canceling or rescinding a member's policy. The filing follows a firestorm of controversy over letters issued by Blue Cross of California, which asked doctors to search out and report any conditions which might disqualify patients from coverage. (A day after the story broke, Blue Cross stopped sending the letters, but the PR damage was done.)

The bill builds on a related law sponsored by this one's backer, Assemblyman Hector De La Torre (D). De La Torre previously sponsored a measure which requires insurers to pay providers once they authorize treatment--even if the policy is retroactively canceled. That bill was approved, and went into effect Jan. 1.

To learn more about the bill:
- read this San Francisco Chronicle piece

Related Articles:
PacifiCare faces $1.33B fine. Report
BC of California fined $1 million for cancellations. Report
HealthNet fined $1M for non-disclosure of cancellation bonuses. Report

Healthcare M&A likely to keep pace in '08

Wed, 06 Feb 2008 06:59:57 -0500

Though it may be consolidation (rather than major takeovers) which drive healthcare M&A this year, expect to see the transactions keep flowing. That, at least, is the prediction of one investment banking firm which is up to its tailored sleeves in healthcare deals. New York-based Shattuck Hammond of New York completed or announced 12 healthcare M&A deals, valued at a combined $2.1 billion, over the past 12 months. While "blockbuster" deals in the billions may not be as common going forward, given turmoil in the credit markets, Shattuck Hammond's Michael Hammond thinks market conditions aren't likely to impact deals under $500 million. His firm thinks deals may very well maintain at a similar level this year as last year. In particularly, he's predicting that ancillary businesses serving hospitals, pharmaceutical and managed care companies are likely to keep consolidating.

To learn more about this trend:
- read this Healthcare Finance News item

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