In the News: August 11-17, 2016
Sg2 is dedicated to helping our clients interpret the latest news and trends in health care. Below you’ll find our analysis of this week’s key industry headlines, along with links to related Sg2 resources.
CMS Will Expand Value-Based Model for Chronic Conditions
On August 10, CMS announced that it will expand the 5-year Medicare Advantage Value-Based Insurance Design (MA-VBID) model starting in year 2 (2018) of the program. The MA-VBID model begins on January 1, 2017, and aims to determine whether targeted Medicare Advantage plan benefit designs for enrollees, based on certain clinical categories, can encourage these enrollees to use high-value clinical services and help reduce overall costs. The clinical categories for which Medicare Advantage plans may adjust benefits under the MA-VBID model currently include diabetes, chronic obstructive pulmonary disease, congestive heart failure, past stroke, hypertension, coronary artery disease and mood disorders. Year 1 of the MA-VBID model will only be open to Medicare Advantage plans in 7 states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania and Tennessee. Starting in 2018, the model will include the additional clinical categories of rheumatoid arthritis and dementia, and the model will be expanded to Alabama, Michigan and Texas.
Payers are increasingly emphasizing better management for patients with chronic conditions. The following are Sg2 resources to guide your chronic care strategy:
- Watch: Sg2 On-Demand Webinar: Medicare Advantage—Strategies for Success
- Read: Sg2 Letter June 2016: Chronic Care Strategy—A Cure for What Ails Us?
- Read: Sg2 Report: Developing a Market-Driven Chronic Care Strategy
Trial Date Set for Aetna-Humana Antitrust Lawsuit
According to Modern Healthcare, trial of the US Department of Justice’s antitrust lawsuit against the proposed Aetna and Humana $37 billion merger will begin December 5, with a decision expected in mid-January. This does not fully address Aetna and Humana’s request for a quick turnaround before their contractual December 31 transactional deadline. According to an SEC filing, Humana stands to collect a $1 billion termination fee from Aetna if the deal does not close by December 31. Similarly, Anthem and Cigna’s proposed $54 billion merger has a slightly more flexible transactional deadline of January 31, 2017, which is “subject to extension to April 30, 2017, under certain circumstances,” according to a separate SEC filing. The termination fee is higher, however, with $1.85 billion on the line.
Whether or not these mega health insurance mergers are completed, now may be the time to reevaluate your organization’s market relevance and take steps to ensure that payers and patients continue to include your organization within their networks. The following Sg2 resources can help guide this process:
- Read: Sg2 Letter January 2016: The Fight for Market Relevance
- Read: Sg2 Report: Disrupting Health Care: Part 2—Business Models
- Read: Sg2 Strategic Countdown: Economies of Scale