Insurance giants merge: Providers brace for lower rates, increased competition
YARMOUTH, Maine – A recent flurry of mergers and acquisitions between national health insurance companies has HME providers on edge.
“I think it should be banned,” said Dave Anderson, owner of Anderson’s Medical Products in Terre Haute, Ind. “Letting these companies get so big that they can influence the market unduly is bad.”
On July 24 insurance giant Anthem announced plans to acquire Cigna for $48.3 billion. A few weeks earlier, Aetna announced plans to purchase Humana for $37 billion. If both deals go through, the number of major health insurers would shrink to three.
Chief among the concerns of providers in the fallout of the consolidation: lower reimbursement rates.
“I think the reimbursements are going to decrease because there’s less competition,” said Laura Williard, senior director of regulatory affairs, compliance and contracting for Greensboro, N.C.-based Advanced Home Care. “Providers will have to make a decision: provide at lower rates or come up with a different strategy, such as retail, to stay in business.”
Other providers, like Chip Rice, say the mergers will make it more difficult to become an in-network provider.
“They’re not going to need duplicate services, as far as ancillary services go,” said Rice, owner of CEO of Riverside, Calif.-based Diamond Respiratory Care, who works with all four insurers. “I would expect that that would make it a little more competitive to compete for their contracts.”
Billing consultant Sylvia Toscano says providers who have existing contracts should be proactive to ensure they survive the mergers.
“If they were a contract provider with Cigna, and Cigna is merging into Anthem, they might want to reach out to their provider representative and inquire about maintaining their contract status with Anthem, so that they can remain a contract supplier,” said Toscano, owner of Professional Medical Administrators.
While providers are concerned about the acquisitions, they are not surprised by them.
“I think the industry as a whole has been expecting this,” Williard said. “We have consolidation going on with providers and we expected it from insurance companies, as well.”