California Opposes Anthem-Cigna Merger

Small practice providers might be getting the big win they have been looking for over the past several months. The California Insurance Commissioner, Dave Jones, announced on June 16, 2016, that his recommendation to the U.S. Department of Justice (DOJ) will be to block the giant merger of Anthem and Cigna - stating it will lead to higher premiums and less access to patient care. This would be a very bold move for the DOJ, and finally putting the patient first over insurance company profits. Something we have not seen in a very long time.

As we all know, the Affordable Care Act is not affordable for most people who signed up on the exchanges or even directly with the insurance companies. Patients who are using these plans get a new surprise each year when their premiums continue to rise, resulting in more out-of-pocket costs. In March a group of my colleagues went up to Sacramento and gave presentations to the commissioner, among other high-profile decision makers, and let them know exactly what this merger would do to small- and medium-size private practices. They explained that the cost-cutting measures that Anthem and Cigna are presenting are not going to benefit the patient at all.

Benefit managers

OrthoNet is a large benefit management company for orthopedic care. Anthem has hired this "bulldog" to represent the insurance plan on behalf of patient care. Say you are a physical or occupational therapist and you are referred a patient (insured through Anthem) who just had surgery, resulting in the need for your services. Because Anthem uses OrthoNet for utilization management, you get to ask OrthoNet to approve 12 visits for your patient. There is a specific form you must fill out and immediately show medical necessity. "Hey OrthoNet - the patient just had surgery!" Is this not showing medical necessity? OrthoNet comes back with, "Congratulations, you've been approved for four visits." Really? How about, I've been denied eight visits? It's like following a three-card Monte. After you graciously explain to your patient how his insurance plan works, he looks at you like you have four heads and says he cannot believe this is the healthcare benefit he has paid for each month. OrthoNet may or maynot approve more visits based upon its consideration of "medical necessity." Bottom line, the patient misses out on much-needed care, and OrthoNet "saves" the insurance company money.

Let's move on to Cigna, who uses a similar service called American Specialty Health (ASH). This is a "special" group of people all right, who are involved in a lawsuit with the Chiropractic Association for using tactics similar to those of OrthoNet. ASH also saves the insurance company money by discounting the amount of money that the provider is paid by stepping in and negating your contract with Cigna and creating its own. If you were previously paid $125 from Cigna, you now will most likely get $75, because it uses ASH to regulate the cost of care and number of visits allowed.

Now, think what would happen to private practices if these two companies came together and became one giant organization. According to an article in the Los Angeles Times, "Anthem is now the nation's second-largest insurer, while Cigna is number four. If combined, [Commissioner] Jones said, the resulting company would control more than half the insurance market in 28 California counties." This would mean they (WellPoint) would be able to control the cost of care for millions of people, and force private practices to accept rates below their cost of doing business.

Working with your state insurance commission

I was fortunate enough yesterday to be a part of an amazing group of people who came together to work on solutions for problems like this. Hearing Mary Watanabe, Deputy Director, Health Policy and Stakeholder Relations, California Department of Managed Care, speak about the rules and regulations that insurance companies are required to uphold, but do not, was very eye opening. Her message was that if you are being wrongfully denied (i.e., not medically necessary or experimental coding) and you follow the plans appeal process within 30 days and are still denied, you should take that denial with all of your documentation and send it to the DMHC and they will open a claim against that insurance company. They will do a thorough investigation and provide a result. That may include a fine to the insurance company for not following policy. I'm going to be very busy these next few weeks, sending these claims into the DMHC! If you do not reside in California, please take the time to locate your state's governing entity. She all but begged for these types of scenarios stating, "I can't help you if you don't tell me about the problems. Please send in your claims!" These types of state-level organizations were created for a reason, and that's to protect the consumer.

Your patients don't deserve to be treated poorly because of merger scenarios such as the Anthem-Cigna one. It's a lose-lose scenario for patients and providers, and the only winners are the health insurance executives.