Health insurer Anthem has publicly proposed acquiring competitor Cigna Corp. for $184 per share in a deal valued at $53.8 billion.Anthem’s play to take over Cigna marks the official first step in what observers saw as inevitable consolidation in the health insurance industry. But the transaction is far from a done deal because regulatory approvals and a battle over the CEO chair remain significant hurdles.Anthem’s deal is nonbinding and needs approval from Cigna’s board of directors and shareholders. The two insurers have been in negotiations since August 2014, and this represents the fourth offer since then. Anthem hopes to complete a deal by the end of the month.
Under the latest proposal, Anthem would pay $184 per share in cash and stock, or about $47.4 billion. Cash would represent 68.6% of the deal, and Anthem’s shares would make up the rest. Including debt, the deal would be worth $53.8 billion, Anthem said. Cigna shares closed Friday at $155.30.
“This combination is the absolute best strategy for both organizations to maximize the potential and lead the transformation of the healthcare industry,” Anthem CEO Joseph Swedish said in a statement.
However, Cigna CEO David Cordani has demanded he become CEO of the newly merged company. Anthem has offered for Swedish to stay in his CEO role and make Cordani president and chief operating officer, which Cordani has rebuffed. Swedish hinted that he would step down from his CEO role after two years after the merger, but there would be no guarantee Cordani would take over.
“We were stunned that the Cigna board continues to insist on a guaranteed CEO position for Mr. Cordani over choosing to allow its stockholders to realize the significant premium being offered,” Swedish wrote in a letter dated Saturday. “We therefore are now reaffirming our June 18 proposal for a combination of our companies, which we believe your stockholders will find more compelling.”
Further, Anthem would have to get antitrust approval from the Justice Department and licensure approval from the Blue Cross and Blue Shield Association. Anthem said it was “confident” it would get the OK from the Blues.
If Anthem and Cigna combined, the new company would have expected revenue of $115 billion this year, still a little smaller than UnitedHealth Group. But the giant would also have 53 million covered members, far surpassing UnitedHealth, and would be a leader in the fully insured and self-insured employer markets.
Anthem hired investment bank UBS as its financial adviser.
On June 29th, Coventry Healthcare USA will change it’s name to Aetna Better Health of Missouri. There are a few significant changes to note:
Medical management criteria will change from Mckesson’s Interqual Criteria to Hearst Corporation’s MCG guidelines.
The directprovider.com portal will no longer be updated with information for this membership.
The payer ID and claim submission address will change.
I’ve attached the recently published quick reference guide and provider notice regarding this change. If you’re using an eligibility vendor to get the data, make sure that they will be ready to accommodate this change. Any transactions submitted to the old payer ID beginning 8/1/2015 will be rejected. Also any authorization transactions (278) submitted to either the old payer ID or the new payer ID between 6/23/2015 and 6/28/2015 will receive an error message. The payer is advising that you hold these until 6/29.
Google recently notified me that the site has been hacked. Luckily the hackers didn’t completely hijack the site but I may need to take it down for a couple of days to do some clean up. I’ll try to give you some notice before taking everything offline. Sorry everyone. I’ll keep you posted on the outcome.
Crisis averted. The fix was much easier than I thought and it only took a few minutes.
This weekend I’m planning to replace the existing prefix lists with a brand new list. There are still some changes that need to be made but I didn’t want to hold it up any longer. There are a few things to note about the new list:
1. The pages will be organized a little differently than the current pages. All the prefixes for a particular letter of the alphabet will be on one page. Hopefully this will make it easier to find what you need and it will make it easier for me to update.
2. There were hundreds of prefixes on the new list that are no longer assigned to a plan but were in the past. I’ve left those on the site for now. They’re labeled “unassigned” where the plan name should be. If you think leaving them on the list adds clutter let me know and I can remove them.
CMS posted the following update on Friday and the deadline is coming soon if you’re interested in participating. Sounds like an interesting opportunity.
Volunteers Sought for ICD-10 End-to-End Testing in January: Forms due October 3
January 26-30, 2015
During the week of January 26 through 30, 2015, a sample group of providers will have the opportunity to participate in ICD-10 end-to-end testing with Medicare Administrative Contractors (MACs) and the Common Electronic Data Interchange (CEDI) contractor. The goal of end-to-end testing is to demonstrate that:
Providers and submitters are able to successfully submit claims containing ICD-10 codes to the Medicare Fee-For Service (FFS) claims systems
CMS software changes made to support ICD-10 result in appropriately adjudicated claims
CoventryCares to Aetna Better Health of PA Migration
Coventry Care of Pennsylvania will be migrating their Medicaid business to Aetna Better Health effective 10/1/2014. New cards are being sent out with the new payer ID and claim address. See the top of page two of their newsletter.
I’ve see several member notifications but very little to the providers. I’ll keep you posted as they provide more info.
CMS Date of Service Change
CMS will be changing how far in the past they will allow eligibility requests. Effective 9/28, CMS will begin limiting inquiries to 12 months in the past (vs 27 months which you can do now). Any transactions requesting eligibility through HETS with old dates of service will get rejected.
CMS may end Health Insurance Market Place coverage for thousands due to data inconsistencies.
CMS sent an interesting press release a few weeks ago regarding a letter they sent to 300,000 health exchange members. These members need to provide additional information or clarify information from their original application. If they don’t respond, coverage for these members will end on 9/30/2014.
CMS Offering Payment on Inpatient Claims Pending Appeal
CMS is actively updating this article they posted regarding the measures they’re taking to reduce the number of appeals they have pending for inpatient stays. As I’m writing this, there’s a teleconference to explain the process. Evidently acute care facilities are eligible for a reduced payment of their charges if they withdraw their appeal.
I just added the most recent Medicare Advantage payer lists and I’ve added links to them in the side bar. Please let me know if you have any trouble downloading them.
I’m sure most of you have already seen this but it popped into my inbox three times this week so I thought I would share. This is the article from Modern Healthcare.
Chinese hackers hit Community Health Systems; others vulnerable
An outside group of hackers targeted Community Health Systems’ computer network and stole 4.5 million individuals’ nonmedical patient data, the company disclosed Monday in a regulatory filing.
The Franklin, Tenn.-based chain, which says it has 206 hospitals in 29 states, said a group originating in China used highly sophisticated malware and technology in the criminal attack. It believes the hackers were searching for intellectual property on medical devices and other equipment, but instead stole data on patients who sought care from its physician practices.
It’s been way too long since I’ve done an update. A few interesting things have crossed my desk lately so I thought I would share.
CoventryCares of Nebraska migrates to Aetna Better Health on 8/24/2014.
It looks like Aetna is finally starting to integrate Coventry into their business. We first thought this was just a rebranding to get rid of the Coventry name but this appears to be a true conversion. This is part of the announcement that Emdeon posted yesterday:
The membership of CoventryCares of Nebraska (currently sent using real-time Payer ID 00511) is expected to migrate August 25, 2014 to Aetna Better Health of Nebraska (new real-time Payer ID ABHNE). With this migration, users will no longer have access to the provider look-up functionality unique to the CoventryCares of Nebraska transactions.
Effective on that date, real-time transactions for these plans will need to be submitted using the new plan name and/or real-time payer ID information: Aetna Better Health of Nebraska, real-time payer ID ABHNE. During the time of August 19, 2014 through August 24, 2014, Health Care Services Review – Request for Review and Response 278 transactions submitted to either real-time payer ID, 00511 or ABHNE, will receive an error message indicating the system is unavailable. All Health Care Services Review – Request for Review and Response 278 transactions should be held during this time and resubmitted to real-time payer ID ABHNE beginning August 25, 2014.
Beginning September 25, 2014, Eligibility Inquiry and Response 270/271, Claim Status Inquiry and Response 276/277 and all Health Care Services Review 278 transactions submitted to the legacy plan name (CoventryCares of Nebraska) and/or legacy real-time payer ID (00511) will receive an error message in the response reminding the submitter to re-submit under the new plan name/real-time payer ID.
I expect to see more of these coming soon. I’m hoping Aetna will provide some type of conversion schedule.
Wellpoint Changes Name to Anthem
I’m not sure what this will mean for ID cards and plan names for plans like BCBS of Wisconsin and Empire BCBS. I’m hoping this is just a marketing ploy with very view real world changes.
I’ve heard a rumor that there are issues with therapy claim dollars getting applied to beneficiary therapy cap amounts. My understandings is that neither HETS and DDE are showing the correct amounts and you must call your MAC to get the right amounts. If you’ve heard anything about this or talked to our MAC, please leave a comment below.