Becker's ASC Review

28 F or the health insurance industry, 2015 was the year of mega mergers. Last July, Anthem announced its $54 billion offer for Cigna, while Aet- na released details of its proposed $37 billion acquisition of Humana. Today, the four major payers insure at least 90 million Americans combined, according to the American Hospital Association. While the deals were not finalized as of press time, if approved, the two new combined companies would join UnitedHealth as the only three major medi- cal payers remaining in the United States, an issue regulators likely will scru- tinize in the coming months. e proposed deals also leave many unanswered questions for ambulatory sur- gery centers: Will provider networks and reimbursement rates remain the same in overlapping markets? Will fewer payers mean more volume for in-network centers? Will mass confusion ensue until well aer the mergers are finalized? It's too early to say for sure. Recently closed deals, however, may provide ASCs with an indication of what's to come: uncertainty and more financial pressures on patients. For example, Aetna completed its acquisition of Cov- entry Health in May 2013—a deal which added 3.8 million to Aetna's then-18 million medical policies. As many of us in the revenue cycle industry readily recall, that 2013 deal— which is tiny by comparison to the pending Anthem-Cigna and Aetna-Hu- man deals—created countless complications for providers and patients alike, as the details were finalized and the combined Aetna-Coventry workforce was brought online. ese deals may also give the new mega payers considerable leverage in the market. e American Medical Association is warning that the Anthem-Cig- na and Aetna-Humana deals may give payers too much negotiating power in certain markets, which may result in higher monthly premiums for patients. In its research, the AMA estimates that premiums increased almost 14 per- cent following the 2008 UnitedHealth and Sierra Health Services merger. AMA research identified 85 metropolitan areas within the following 13 states that "would enhance market power" as a result of the Anthem-Cigna merger: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Mis- souri, Nevada, New Hampshire, New York, Ohio and Virginia. e provider group conducted a similar analysis for the Aetna-Humana merger, predicting that such a deal would have a similar effect in 15 metropolitan areas within seven states: Florida, Georgia, Illinois, Kentucky, Ohio, Texas and Utah. e AHA, too, has come out against the deals, telling federal regulators last fall that the acquisitions "have the very real potential to reduce competition substantially, increase the cost of premiums, and diminish the insurers' will- ingness to be innovative partners with providers and consumers in trans- forming health care." As these deals unfold, ASCs can avoid disruptions to their revenue cycle and maximize their cash flow by focusing on the following three areas: Contracts e biggest issue ASCs are likely to face as these mergers unfold is determin- ing the validity of individual reimbursement contracts when two insurance companies merge. For example, if an ASC has contracts with Anthem and Cigna, how would the terms of those individual agreements apply once the entities combine? Past experiences suggest that the answers to these questions unfold slowly, and oen through trial and error. While company representatives resolved claims issues and fielded other routine questions during the Aetna-Coventry merger, in our experience, contracts were put on hold while the deal was pending, and new agreements were unable to be negotiated until the deal was finalized—creating considerable uncertainty for outpatient facilities in the interim. Insurance cards As a result of the Aetna-Coventry merger, individuals in specific Coventry markets were migrated mid-year to the Aetna brand, while others remained with Coventry. ese moves also did not happen all at once, and were not always well-publicized, which created confusion for ASC staff when indi- viduals presented their insurance cards ahead of their procedures. Similar to the Aetna-Coventry merger, these new deals may create similar problems in the coming months, especially with so many potentially overlapping payer markets. Rates Until the merger dust settles, overlapping payer markets mean ASCs may face cash flow challenges if they have contracts with two merging payers that do not reimburse the same amount for procedures. In our experience, the newly merged payer is unlikely to honor the higher rate in all cases, which could erode the profitability of low margin cases—or even put them in the red. And if there is a discrepancy, whom do you email—the Anthem rep or the Cigna rep? Or both? Choosing the latter is likely to be the best approach for the foreseeable fu- ture. Aggressive, continual communication with representatives from all the relevant payers will mean your facility has the best information available at all times. ASCs should inventory all of their contracts, scour the fine print to identify issues that may arise, and reach out to payers immediately to deter- mine how the mergers will be rolled out and what it means specifically for their ASC. Unsatisfied with the answers you're receiving? Ask to speak with a supervisor. Still uncertain? Ask to speak with the supervisor's supervisor—and all the way up until you get the answer you need. And prepare yourself: As with previous mergers, these issues are likely to take years to resolve completely. n Avoiding ASC Cash Flow Issues During Payer Mergers By Scott Allen, Vice President, Managed Care Contracting, National Medical Billing Services subscribe today free educational up-to-date Visit beckersorthopedicandspine.com or call (800) 417-2035 BECKER'S SPINE REVIEW E-WEEKLY

• Cover