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:

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:

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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