Payer/Provider Relations

Antitrust Regulators Struggle to Keep Up With Hospital M&A

Hospital consolidation has entered a new stage: Large regional hospital systems have finished acquiring most of their smaller local competitors and have begun to combine with large health systems of similar size. Experts say the new phase of market concentration, which also includes large hospital groups acquiring physician groups and outpatient centers, is bound to increase prices for health plans and consumers — and that there’s little regulators can do to stop or reverse it.

Hospital deals are not new: Over the past decade-plus, hundreds of hospital groups have combined, following a trend toward consolidation and vertical integration across the American economy. According to the American Hospital Association, nearly 1,600 hospital transactions took place between 1998 and 2017. Health system market power is now more concentrated than ever: in most regional markets, two or three players control most of the inpatient facilities. In fact, in a majority of U.S. metro areas, one hospital system controls more than half the market.

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Insurers May Not Be Ready to Implement No Surprises Act

Health insurers are struggling to comply with the price and billing transparency requirements of the No Surprises Act (NSA), according to a survey conducted by Change Healthcare, Inc. Meanwhile, insurers are lining up behind the Biden administration as it prepares to defend regulations implementing the NSA from a legal challenge brought by provider trade groups.

The No Surprises Act bans balance billing — when out-of-network providers send patients a bill for the amount an insurer refuses to pay — and requires payers and providers to work out the dispute themselves. If that fails, an HHS-approved independent arbitrator will decide between two payment amounts: one submitted by the provider, and one by the insurer.

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CVS Health Will Spend Up to $25 Billion on Provider M&A

At the firm’s annual investor conference, CVS Health Corp. executives promoted closer vertical integration and promised to move even further into care provision. CVS, which acquired Aetna in 2018, emphasized virtual care and its retail HealthHUB clinics in recent months, and it has indicated it has a strong interest in acquiring providers, particularly in primary care.

Other large carriers have made similar moves in recent years. UnitedHealth Group owns both the U.S.’s largest health insurer, UnitedHealthcare, and a growing provider arm, OptumCare. Humana Inc. has moved to acquire in-home and primary care providers. Meanwhile, CVS’s largest retail pharmacy competitor, Walgreens Boots Alliance Inc., is purchasing clinics with the goal of becoming a major primary and urgent care provider. According to CVS Health CEO Karen Lynch, the firm’s position astride all three businesses — retail, care delivery and benefits management — is why it will perform better than its rivals.

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New Google Maps Tool Shows Providers’ Network Affiliations

Google Maps will show users searching for health care providers which health insurance practitioners will accept — and health care insiders say that the new product could transform how patients access health care. However, they caution that Google, a division of Alphabet Inc., must be diligent about updating and refining the information it displays, especially if it hopes to expand its advertising and data analytics businesses into health care at a large scale.

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TeamHealth Wins One Battle in Ongoing War With UnitedHealth

A jury recently found UnitedHealthcare underpayed Nevada emergency care subsidiaries of TeamHealth Inc. in out-of-network billing scenarios — and it’s the first of several ongoing suits between the two health care firms to wrap up. Experts say that the No Surprises Act, which comes into effect next month, will fix some of the issues raised in the lawsuit, but also point out that settling out-of-network billing disputes remains a matter of leverage.

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