Change Healthcare and UnitedHealth Group’s diversified health services company, Optum, have announced that they will extend their healthcare merger agreement to December 31, 2022.

UnitedHealth Group first announced plans for Optum to acquire Change Healthcare in January 2021.

In a proposed transaction valued at $8 billion, the merger aimed to combine Change Healthcare’s revenue cycle management technologies with Optum’s services to ease clinician workflow, improve provider access to clinical data, and streamline payment processes.

The companies had expected to finalize the deal in the second half of 2021, but the transaction hit a series of roadblocks.

Most recently, the Antitrust Division of the Department of Justice (DOJ) filed a civil lawsuit to block the merger deal. The complaint stated that the transaction would hurt competition in the commercial health insurance and healthcare technology markets.

DOJ claimed that UnitedHealth Group would gain access to rival payer information, giving the health plan an unfair market advantage. Additionally, the merger would eliminate UnitedHealth Group’s only significant rival for first-pass claims editing technology, allowing the payer to develop a monopoly share in the market.

Change Healthcare and Optum said that DOJ’s attempt to block the merger is “without merit and serves only to delay improving the experience and outcomes for all participants in the health system.”

Since the initial merger announcement, the companies had pushed the deadline to April 2022, but have now extended it to December 2022.

“The extended agreement reflects our firm belief in the potential of our combination to improve healthcare and in our commitment to contesting the meritless legal challenge to this merger,” the companies said in a joint statement.

Change Healthcare and Optum plan to detail the benefits of the merger deal at a two-week trial scheduled to begin on August 1.

Should the court block the merger from advancing, Optum will pay a $650 million fee to Change Healthcare, the press release noted. If the merger is allowed to continue, Change Healthcare plans to pay a cash dividend of $2 per share to its shareholders at or around the closing.

The merger deal has faced scrutiny since its announcement.

First, DOJ filed a review of the deal in March 2021 to gather additional information on the proposed acquisition, following concerns from the American Hospital Association (AHA) that the merger would hurt competition.

AHA again expressed its worries about the deal in an August 2021 letter to DOJ. The trade organization insisted that the healthcare merger would lead to higher prices and negatively impact patient care, claims processing, and denials.

However, Change Healthcare and Optum stated in the announcement that the combination would lead to lower costs and better experiences for its stakeholders

In January 2022, anonymous Bloomberg sources claimed that Change Healthcare was considering selling assets, including its payment integrity business, to prepare for the merger with UnitedHealth Group.

AHA and other hospital groups applauded DOJ for its recent challenge of the proposed healthcare merger.

Source: Revcycle Intelligence

From lawsuits to new partnerships, here are six recent headlines about Hartford, Conn.-based Aetna:

1. Aetna sued by plastic surgery provider: The payer is being sued in Florida by Vanguard Aesthetic and Plastic Surgery for an alleged “unreasonably low” reimbursement rate. Vanguard claims Aetna entered a contract by granting an in-network exception for all care for a particular patient, but the payer only reimbursed 3.7 percent of the claim.

2. Allina Health | Aetna names new CEO: Former Chief Medical Officer Robert Wieland, MD, is now CEO of the joint-venture health plan that combines Allina Health’s providers and Aetna’s national benefits.

3. Aetna facing class action over physical therapy coverage: The payer allegedly used a restrictive definition of “medically necessary” to avoid covering a patient’s physical therapy. It must argue in Connecticut federal court it did not violate the Employment Income Retirement Security Act.

4. Supreme Court declines to toss ‘dummy code’ suit against Aetna, Optum: The nation’s highest court upheld a class-action lawsuit that alleges the company worked with Aetna and used “dummy code” to make administrative fees appear as billable medical charges. The class-action is awaiting a final decision in the Fourth Circuit Court of Appeals.

5. Aetna, Grow Therapy partner to cover mental healthcare for members: The move provides in-network coverage to all 87 million Aetna members for Grow Therapy’s thousands of therapy and psychiatry providers, regardless of location.

6. Aetna sued over spinal surgery coverage: An Aetna Life Insurance member is suing the payer for not covering his lumbar artificial disk replacement surgery, arguing the move violates the Employee Retirement Income Security Act.

Source: Beckers Payer

CMS has released its proposed Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) rule for FY 2023, which included an increase in IRF payment rates and updates on the IRF Quality Reporting Program (QRP).

The rule publishing complies with legal requirements for CMS to update Medicare payment policies for IRFs on an annual basis.

CMS proposed a 2.8 percent increase in IRF PPS payment rates for FY 2023. This reflects the 3.2 percent update to the inpatient rehabilitation facility market basket and a 0.4 percent reduction for productivity adjustment.

The agency said that if more recent estimates of market basket updates or productivity adjustments become available, it will use this data to update the payment rate in the final rule.

The proposed rule also includes a modification to the outlier threshold, which will maintain outlier payments at 3.0 percent of total payments, the press release stated. This modification will lead to a 0.8 percent decrease in outlier payments.

Outlier payments from Medicare aim to protect hospitals from significant financial losses that result from patient cases that incur extraordinarily high costs.

After the outlier payment reduction, the overall IRF payments in FY 2023 will increase by 2.0 percent, or $170 million, CMS said.

In the FY 2022 IRF PPS proposed rule, CMS increased IRF payment rates by 2.2 percent and implemented a 0.3 percent reduction in outlier payments.

Like the recently proposed rule on hospice payment rates, CMS proposed a permanent 5 percent cap on annual IRF wage index decreases. With this cap, the agency aims to limit year-to-year changes in provider wage index payments associated with wage index changes.

The proposed rule also provided potential updates to the IRF Quality Reporting Program. IRFs that fail to meet reporting requirements may face a 2.0 percent reduction in their annual increase factor.

CMS plans to expand the IRF quality data reporting requirements, which currently apply to admitted patients with Medicare Part A fee-for-service and Medicare Part C.

The expansion would require inpatient rehab facilities to collect data on all IRF patients, regardless of their health plan. According to CMS, this proposed change would help ensure IRF patients receive the same quality of care and verify that provider metrics reflect performance across all IRF patients and not just those on Medicare Parts A and C.

IRF providers would have to start collecting patient assessment data for all admitted patients beginning on October 1, 2023, for the quality reporting requirement to take effect in FY 2025.

In addition to the QRP modification, CMS has requested stakeholder feedback on several changes to the program.

First, the agency requested information on including the National Healthcare Safety Network (NHSN) Healthcare-associated Clostridioides difficile Infection (HA-CDI) Outcome Measure as a digital measure in the IRF QRP. The measure tracks the development of C. difficile infections in IRF patients and would be the first digital measure in the IRF program.

CMS is also seeking feedback on how to go about developing and including health equity quality measures in the IRF QRP.

“We believe that a focused health equity measure would provide specific equity data that will help providers develop innovative and targeted interventions for impacted groups and would additionally provide transparency for beneficiaries,” the press release stated. “We also believe that by leveraging measures to give providers access to disparity information, they would be able to use this data to make informed decisions about their quality improvement initiatives.”

Apart from the IRF QRP, CMS requested stakeholder feedback on including discharge to home health in the IRF transfer payment policy following a recommendation from the Office of Inspector General.

In addition, the proposed rule is seeking comments about the methodology used to update facility-level adjustment factors, including rural, low-income, and teaching status adjustments. CMS plans to codify its IRF teaching status adjustment policy, aligning the IRF policies with the updated Inpatient PPS and Inpatient Psychiatric Facility PPS policies, the agency said.

Source: Revcycle Intelligence