Archive for November 22nd, 2010

Humana Buys Concentra – A Move To Workers Compensation Business?

Monday, November 22nd, 2010

LOUISVILLE, Ky.–(BUSINESS WIRE)–Humana Inc. (NYSE: HUM) today announced it has signed a definitive agreement to purchase Concentra Inc., a privately held health care company based in Addison, Texas, for approximately $790 million in cash. Through its affiliated clinicians, Concentra delivers occupational medicine, urgent care, physical therapy and wellness services to workers and the general public from more than 300 medical centers in 42 states. Nearly 3 million Humana medical members live near a Concentra center. In addition to its medical center locations, Concentra serves employer customers by providing a broad range of health advisory services and operating more than 240 worksite medical facilities.

“Concentra’s focus on evidence-based, cost-effective medical care and a service-driven culture parallels that of Humana and ultimately results in tremendous opportunity across the combined enterprise.”

“Concentra brings solid experience across a number of fronts that fit well with our consumer-focused strategy and will allow both organizations to provide a wide array of services to individuals needing access to convenient and affordable high-quality health care,” said Michael B. McCallister, Humana’s chairman of the board and chief executive officer. “We are excited about the opportunity to acquire a strong stand-alone business that reinforces our core businesses while providing both revenue diversification and opportunities for strategic expansion longer term.”

“This combination with Humana is an excellent opportunity to expand service to patients and employers, as well as enhance access to convenient medical care for patients in communities nationwide,” said James M. Greenwood, Concentra’s chief executive officer. “Concentra’s focus on evidence-based, cost-effective medical care and a service-driven culture parallels that of Humana and ultimately results in tremendous opportunity across the combined enterprise.”

Annual revenues for Concentra approximate $800 million. The transaction is subject to certain regulatory approvals and is anticipated to close in December 2010. Humana’s financial guidance for the years ending December 31, 2010 and December 31, 2011 exclude the impact of this pending transaction. Concentra is expected to be slightly accretive to Humana’s earnings for the year ending December 31, 2011.

Editor’s Note: American health insurance companies are seeking new opportunities – some are focusing on health insurance markets in China, India and other countries where free enterprise offers economic gain. The Humana purchase of Concentra signals entry into the Workers Compensation market in the United States, in our opinion. A good business decision it seems.

Health Insurance Agents Doomed – Carriers To Go Direct?

Monday, November 22nd, 2010

WASHINGTON, D.C., Nov. 22, 2010 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) expressed disappointment with the interim final rule on Medical Loss Ratios (MLRs) released by the U.S. Department of Health and Human Services (HHS) today. The rule includes agent and broker commissions as ‘non-claims costs’ when calculating an insurer’s MLR as part of the new health care reform law.

“The Big ‘I’ is disappointed with the interim final MLR rule, and we are extremely concerned that this rule will lead to severe market disruption, especially in the individual and small group markets,” says Robert Rusbuldt, Big “I” president and CEO.

Throughout the process, the Big “I” has urged the National Association of Insurance Commissioners (NAIC) and the HHS to exclude agent commissions from the MLR calculation. The Big “I” has argued that these agent commissions are passed 100% to third parties and are therefore pass-through payments that should not be included in the formula. While acknowledging the potential impact of the MLR standard on agents and brokers and including that impact as a factor in considering whether a particular individual market would be destabilized, HHS did not appropriately exclude agent commissions and fees from the MLR calculations.

“The Big ‘I’ is very concerned that the MLR provision of the new health care reform law will have a devastating effect on the private marketplace and that consumers will be negatively impacted,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs. “After hearing from various interested parties if HHS does not fix this language before the rule is final, we hope that Congress will step in and revise the MLR formula through the legislative process.”

Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20101122/NEWS01/101129994

Major Texas Hospital System Agrees to Transparent Contract

Monday, November 22nd, 2010

A major Texas hospital system has agreed to a fully transparent hospital contract using Medicare base rates as the benchmark for all in-patient and out-patient claims. Payers (self-funded employers), for the first time,  will have direct access for full disclosure.

Competing payers such as the BUCA’s will continue to tout their “superior” discounts. However their continued refusal to show their clients actual contracts they have negotiatated with area hospitals will preclude payers from knowing the real truth about hospital costs.

Participating employers will be able to forecast their group health costs with a greater degree of accuracy as well as retain full audit rights.

For more information contact RiskManager@sbcglobal.net .