Becker's Hospital Review

29 CFO / FINANCE Judge: The way BCBS plans operate could automatically violate antitrust laws By Morgan Haefner A federal judge ruled litigation against Blue Cross Blue Shield in- surers showed how they do busi- ness may be an automatic violation of fed- eral antitrust regulations, according to e Wall Street Journal. Here are five things to know about the lit- igation. 1. In an April 5 ruling, U.S. District Judge R. David Proctor said provider- and mem- ber-sponsored litigation claiming the Blue Cross Blue Shield Association and its 36 members worked together under competi- tive restrictions, when considered altogeth- er, may be a "per se" violation of the Sher- man Act. e Sherman Act is the federal law banning unlawful trade restraints. 2. Specifically, the litigation argues the in- surers unlawfully conspire to divide mar- kets and avoid competition with one anoth- er. is, in turn, results in higher consumer prices and lower provider payments, the litigation alleges. 3. While the case faces a long road — the lawsuits against BCBS insurers haven't gained class-action status, and the judge le a potential defense for the payers' op- erations — it establishes legal outlines in a future trial, WSJ reported. Mr. Proctor's ruling of a possible "per se" violation could make it difficult for the BCBS' insurers to prove their practices don't violate law. 4. Tim Greaney, a professor at San Francis- co-based University of California Hastings College of the Law, told the publication the ruling is "a pretty serious blow to the Blues." 5. BCBSA and its 36 companies plan to appeal the decision. Scott Nehs, general counsel for BCBSA, told WSJ the insurers are "confident that we will prevail" and "dis- appointed by the court's ruling with respect to certain aspects of the BCBS system." n Humana launches national value-based hospital incentive program By Morgan Haefner H umana will now reimburse hospitals based on quality improvement and performance metrics under a new program it revealed April 25. The insurer's national Hospital Incentive Program pertains to hospitals treat- ing Humana's commercial members. The program will compensate hospitals based on three key areas: patient experience, patient safety and patient out- comes. It will also use seven measures like healthcare-associated infection rates, care coordination, palliative care and more to determine performance. The metrics incorporate two care certification programs developed by The Joint Commission. Ben Lunsford, vice president of value-based strategies at Humana, told Beck- er's via email "HIP provides hospitals with an opportunity to participate in a value-based program that recognizes a hospital's continuous patient improve- ment efforts via earned annual rate increases." Earned annual rate increases are based on hospital performance across the previously stated three key areas. Humana said it will make a separate announcement about how many hospitals are participating in the program. n UnitedHealth's Q1 profit jumps 30.6%: 4 takeaways By Morgan Haefner U nitedHealth Group reported first quarter revenues of $55.2 billion, up 13.3 percent from $48.7 billion in the first quarter of 2017. Here are four takeaways from the insurer's results for the three months ended March 31. 1. UnitedHealth's insurance arm, UnitedHealthcare, grew to cover 2.2 million more consumers in the first quarter of 2018 compared to the same period last year. This helped grow overall revenues for the segment by 13.3 percent year over year to $45.5 billion. 2. UnitedHealthcare saw large gains in its Medicare and retirement business. Revenues attributable to those segments climbed 14.3 percent year over year to $18.9 billion during the first quarter of 2018. The number of Medicare Ad- vantage plan users increased 10.6 percent in the first quarter of 2018, com- pared to the same period in 2017. 3. Optum, UnitedHealth's health services arm, continued to be a significant source of revenue growth for the company. Optum increased its revenues by 11.1 percent in the first quarter of 2018 to $23.6 billion. OptumHealth, the firm's provider arm, saw first quarter revenues climb 21.7 percent year over year to $5.8 billion. Optum has been steadily expanding its physician work- force, which currently outpaces Oakland, Calif.-based Kaiser Permanente's roughly 22,000 physicians by 8,000. 4. Altogether, UnitedHealth saw profits jump 30.6 percent in the first quarter of 2018 to $2.8 billion. That's compared to $2.2 billion posted in the same period a year prior. n

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