On July 21st 2016 the US Department of Justice filed suit attempting to block the Anthem-Cigna and Aetna-Humana mega-mergers. (ANTM, CI, AET, HUM)  The DOJ claims that the combined companies would create an unacceptable reduction in competition within the managed care industry as explored in our event (AET) (HUM) – As DOJ’s Legal Challenge Moves Forward, Aetna Faces Additional Scrutiny on Capitol Hill. As a result of this scrutiny, Aetna and Humana have both decided to fight regulators as they strongly believe the combined company improves coverage options and reduces cost for Medicare beneficiaries.  Aetna’s CEO, Mark Bertolini, has also indicated in a letter to regulators that without a deal the company would in all likelihood drop from the ACA healthcare exchanges due to a lack of economies of scale.This merger activity is compounded by the fact that Healthcare in the US is continuing to go through a fundamental transition, primarily as a result of the Affordable Care Act.  The result is a slow and intractable move away from fee-for-service and towards value-based care.  To further compound the space, physician payments are also going through a massive upheaval given legislation enacted in 2015 to reform Medicare payments to physicians and other health care providers under Part B. The Medicare Access & CHIP Reauthorization Act aims to create a new framework that rewards providers for providing highly quality care to Medicare beneficiaries while requiring additional reporting programs and quality data to validate their services. Our hosted event  MACRA – Understanding the Impact on Providers & Analyzing Recent CMS Performance Data sought to provide our clients with a much deeper understanding of the proposed rule while preparing them with potential changes that could be made to the final regulation set to be released this fall.

To add yet another level of complexity, these managed care mergers are also calling into question pharmacy benefit management (PBM) relationships. Anthem has made very public their dispute with their PBM, Express Scripts (ESRX). After targeting each other with additional law suits, questions arise as to whether or not that relationship will survive, could Anthem create their own PBM, is that PBM strategy driving their acquistion of Cigna, and how does this impact other payers like UnitedHealth Group (UNH) and Aetna.  These complex dynamics have been the focus of a series of Coleman Hosted Events calls and most recently via (ANTM, ESRX, CVS, UNH) – Outlook for the Future State of Health Plan and PBM Relationships.