Insurer eyes diabetes market

Sunday, October 30, 2011

Another source for diabetes supplies has thrown its hat into the Medicare ring--one that has diabetes providers crying foul.

In August, Humana announced that its mail order pharmacy, RightSource, would offer diabetes supplies to Medicare beneficiaries--both Humana members and non-members.

"I can't think that's right," said one mail order provider who didn't want to be named. "Humana as an insurance company is telling their patients to use Humana's pharmacy, so that money is just going in circles."

Right now, RightSource serves approximately 600,000 plan members in all 50 states and Puerto Rico.

With the rollout of a national mail order program for diabetes, it's not all that surprising that Humana would want to get into the Medicare diabetes market, say providers.

"The managed care plans are not subject to competitive bidding," said Dan Gooch, owner of Columbia, S.C.-based Pal-Med. "They are trying to encourage Medicare patients to dis-enroll in Medicare and enroll in their plans."

That could be attractive to Humana members who want to avoid the hassles of obtaining their supplies under competitive bidding.

"They can say, 'Hey, stick with us for everything,'" said one provider.

Provider Mark Gielniak was surprised that Humana would target beneficiaries for diabetes testing supplies, since the insurer typically contracts companies like his.

In fact, he recently cancelled his contract due to low reimbursement.

"They were only reimbursing us 50% of Medicare's allowable," said Gielniak, vice president of Warren, Mich.-based Diabetes Plus.

At the end of the day, even Humana and other payers who are not directly included in competitive bidding could eventually feel the effects, says Gooch.

"I think in the future we will see fee schedules spill over onto them very quickly, just like the state Medicaids," he said.