Innovation and Disruption

Feb. 22—Congress will take a look this week at one of the new breed of mergers that are shaking up the healthcare industry.

February 22, 2018 3:28 pm

Feb. 22—Congress will take a look next week at one of the new breed of mergers that are shaking up the healthcare industry.

The House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold a hearing titled “Competition in the Pharmaceutical Supply Chain: The Proposed Merger of CVS Health and Aetna.”

The hearing follows calls in December by Rep. Frank Pallone (D-N.J.) for Congress to review CVS Health’s plan to purchase Aetna for $69 billion. Pallone cited concerns that the merger would open a new frontier for the healthcare industry that could harm consumers and providers.

“In recent years, various types of mergers and acquisitions in the healthcare system have become more common, especially across traditionally separate lines of business,” Pallone wrote in a letterto the Energy and Commerce Committee’s chairman. “The newly proposed merger of CVS Health and Aetna is the most recent example, and perhaps the largest.”

Pallone said Congress needed to track ways that the deal could impact the delivery of health care.

“Due to the scale of the CVS Health-Aetna merger, these changes should be thoroughly scrutinized and understood by members of the committee,” Pallone said.

Leslie Norwalk, strategic counsel for Epstein Becker Green and former acting administrator for the Centers for Medicare & Medicaid Services (CMS), said the Aetna-CVS deal might change the “competition paradigm” and move traditional insurers from merely paying claims to managing delivery and more directly contracting with employers.

“Is it sufficient to be a paradigm shift? I’m not sure,” Norwalk said at a media briefing this week.

In an analysis this week on hospital impacts from emerging healthcare deals, Moody’s Investor Service noted “hospitals will face the risk that Aetna members will get their primary care services from CVS’s retail health clinics instead of hospital outpatient settings.”

CVS has about 1,100 Minute Clinics within its retail pharmacies but said it would expand healthcare services if the deal closes, the Moody’s analysis noted. Some Minute Clinics already provide diagnostic and primary care services, such as blood draws and diabetes care, that are typically offered during physician office or clinic visits.

Public comments on the transaction from the American Hospital Association (AHA) have been limited to noting the deal as the latest evidence that the healthcare landscape is changing dramatically.

“The hospital field has long anticipated this disruption and has sought to participate by replacing an outdated ’siloed’ health care system with a continuum of care to improve coordination and quality and reduce costs for patients,” Tom Nickels, executive vice president for AHA, noted in a Feb. 14 letter to Congress.

Norwalk noted that CVS previously acquired Highmark, a pharmacy benefit management company with an insurance component, so it was not surprising that they subsequently moved to join with an insurer.

She said it is far more likely that the Trump administration approves the CVS-Aetna deal than was the case with other high-profile insurance mega-mergers of recent years.

The upcoming congressional review will follow a Feb. 14 hearing by the House Energy and Commerce Committee’s Oversight and Investigations Subcommittee on hospital combinations with other hospitals and physician practices, as well as M&A activity by physician practices and insurers.

Monday, Feb. 26

The deadline for HFMA’s MAP Award applications. Learn more.

Tuesday, Feb. 27

The Senate Health, Education, Labor and Pensions Committee holds a hearing titled “The Opioid Crisis: The Role of Technology and Data in Preventing and Treating Addiction.” Learn more.

The House Oversight and Investigations Committee’s Subcommittee on Healthcare, Benefits, and Administrative Rules holds a hearing titled “An Obamacare Failure: The Multi-State Plan Program.” Learn more.

CMS holds its Hospital/Quality Initiative Open Door Forum. Call 1-800-837-1935 and reference conference ID: 31627179

CMS holds an outreach and education webinar for participants in the Hospital Inpatient Quality Reporting (IQR) Program. The webinar is titled “SEP-1 Early Management Bundle, Severe Sepsis/Septic Shock: v5.3a.” Register.

The 11th Annual Medicaid Managed Care Summit begins and runs through March 1 in Washington, D.C.

Wednesday, Feb. 28

The House Energy and Commerce Committee Health Subcommittee holds a 10 a.m. ET hearing titled “Combating the Opioid Crisis: Helping Communities Balance Enforcement and Patient Safety.” Learn more.

CMS holds a long-term services and supports webinar, the “New Medicare Card Project.” Register.

CMS holds a MIPS quality data submission webinar to answer commonly asked questions about the submission feature. Register.

The 13th National Value-Based Payment and Pay for Performance Summit begins in San Francisco and runs through March 2. More information.

Friday, March 2

Deadline to review Outpatient Hospital Compare preview reports available through the QualityNet Secure Portal for participating hospitals. Preview reports can be accessed via the public website for QualityNet.

Deadline for public comments on CMS proposed changes to the risk adjustment model for aged and disabled beneficiaries enrolled in Medicare Part C plans beginning in CY19, as required by the 21st Century Cures Act. Learn more.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare



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