Is there a bigger move being planned at Cigna?

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The crushing weight of ambulance bills

Over the summer, Precious Mae Clark (in the photo above) emailed me with a desperate plea: She was staring down the barrel of a $7,370 (I repeat, $7,370!) ambulance bill and needed help fighting it. “I am frustrated,” she wrote. “I hope and pray that you will notice this email.”

The amount of Clark’s bill was shocking. But her predicament wasn’t. Every day, people in America are getting surprise ambulance bills and feel completely powerless to deal with them. The problem is, people really don’t have a lot of recourse because Congress didn’t address ambulances when it outlawed most types of surprise billing in 2020.

So, Tara Bannow and I partnered with our pals at Tradeoffs to dig into these unexpected bills, and a federal committee’s plan to end them. The good news: Committee members endorsed the idea of capping patients’ out-of-pocket costs for emergency rides to $100. The bad news: That’s still just an idea. Congress needs to act.

Make sure you listen to the Tradeoffs podcast where Dan Gorenstein interviews Precious (and talks about how her bill was resolved), Leslie Walker does a ride-along with an ambulance crew in California, and Tara and I talk about the different forms of rate-setting that are viewed as the main solutions to this problem. Read the STAT story, which lays out more of the ambulance committee’s recommendations on rate-setting and includes a map of where commercial insurance rates for ambulances are highest and lowest. And, as always, let us know what you think: [email protected].

Is there a bigger move being planned at Cigna?

A report from Reuters last week said Cigna is looking to sell its Medicare Advantage business, which covered 600,000 people as of September. A Cigna spokesperson said the company does “not comment on rumors or speculation.”

Cigna is a very small player in Medicare Advantage, and its MA plans have been messy and controversial since it bought HealthSpring in 2012. But Cigna’s MA business is still sizable, growing, and profitable — a highly desirable asset for an insurance company willing to spend billions. There could be a bigger move being planned, though. At least that’s what Scott Fidel, a health care stock analyst at Stephens, is thinking.

“We would see this action being one component of a potential pursuit of [Humana] as acquisition target, with the divestiture being a proactive move to reduce antitrust risk,” Fidel wrote in a note to investors last week. In other words, Cigna (which is mostly employer and commercial health insurance) and Humana (almost entirely Medicare Advantage) would have no insurance overlap that would immediately trigger antitrust review.

There’s one issue: A combined Cigna-Humana would still have a lot of overlap with their pharmacy benefit managers. Cigna owns Express Scripts (second-largest PBM, according to Adam Fein of Drug Channels), and Humana owns the fourth-largest PBM. Given how Lina Khan’s Federal Trade Commission already is scrutinizing PBM market power, it seems like that kind of deal would be an insta-block.

This weekend’s CMS meeting (no, not that CMS)

My colleague Brittany Trang spent Saturday reporting from the American Medical Association’s interim meeting in National Harbor, Md. The AMA’s Council on Medical Service discussed whether the doctors’ lobby should support policies such as universal insurance coverage for anti-obesity medicines and outlawing the ability to pay physicians via virtual credit cards.

In one of the more inflammatory proposals, the group spent almost 45 minutes of the six-hour meeting arguing about whether the AMA should be able to discuss all health reform proposals, or continue to categorically oppose any single-payer models.

“If we emerge from this meeting with the headline, ‘AMA supports single-payer health care,’ we will jeopardize our bipartisan efforts to [reform Medicare],” one opponent said.

The other big flash point was whether the RUC — the secretive AMA committee that tells Medicare what physicians should get paid for each service — should be “modernized” to “incorporate evidence-based data” so that physician compensation becomes more equitable. This is a big deal, as the AMA is currently campaigning to overhaul how Medicare pays physicians, and as doctors fight, amongst themselves, over their 2024 Medicare pay cut (more on this below).

HCA eyes large-scale outsourcing

The country’s biggest hospital chain is looking to save up to $800 million a year over the next five years in part by sending jobs overseas, Tara reports.

HCA Healthcare plans to build a “global capacity center” in India next year that will house information technology workers. HCA won’t say whether this will involve layoffs in the U.S. It certainly did for HCA’s closest competitor, Tenet Healthcare.

Tenet’s former CEO told the Dallas Morning News in 2019 the company would cut north of 1,000 domestic jobs and move them overseas. Around the same time, the company opened a “global business center” in the Philippines that employed about 500 people.

Mike Marks, HCA’s SVP of finance, said last week on stage at HCA’s investor day that IT roles are hard to fill, and the office in India will draw “really talented professionals.” Other ways HCA plans to meet its cost savings goal, according to Marks: reduce lengths of stay, boost oversight of patient discharges, and leverage its laboratory scale.

Mom, the doctors are fighting again

Doctors across the board are mad about Medicare’s cuts to their payments, but the payment updates also continue to drive a rift between primary care doctors and specialists, Brittany reports.

The current controversy centers on a bump up to a new payment code that is used by primary care doctors rather than specialists. Surgeons have flat-out said there is no “valid justification” for that increase for their primary care colleagues. It’s all part of the broader physician anger toward Medicare’s payment system, which again has to be fixed by Congress. Read more about it from Brittany.

Industry odds and ends

• The government wants to place firmer caps on payments to brokers who sell Medicare Advantage plans. Read my story from last week.
• Congress is getting closer to some kind of package that involves reforms to pharmacy benefit managers, my colleague Rachel Cohrs reports.
• Tax-exempt hospitals like Indiana University Health and Sutter Health are starting to release their Q3 financial reports. An early observation: The markets slumped in the third quarter, and that appears to have dragged down their investment income.
• Mass General Brigham plans to issue $470 million in tax-exempt debt, most of which will go toward “certain capital projects.” For those looking ahead: The hospital system also plans on presenting at the J.P. Morgan Healthcare Conference in January.
• DaVita’s stock soared last week after the dialysis chain blew the doors off profit expectations. DaVita and its competitors have been under pressure since Novo Nordisk said its GLP-1 drug slowed the progression of kidney disease, but DaVita came out with a detailed, long-winded analysis to allay Wall Street’s concerns. “Strong adoption of these drugs will not prevent us from achieving our long-term operating income growth target in the next 10 years,” DaVita CEO Javier Rodriguez told investors.
• Molina Healthcare and its new Medicare Advantage hire Vinod Mohan have reached a settlement with Elevance Health. Terms were not disclosed. If you want a refresher of this battle, it’s in the Sept. 18 edition of this newsletter.
• Officials working in Pennsylvania’s attorney general office want the state to adopt some kind of antitrust law that would allow for closer scrutiny of hospital mergers, according to a local Allied News report.

The Meme Ward

Meme is courtesy of my witty colleague Elaine Chen, who also wrote about the FDA approving Eli Lilly’s drug for weight loss.