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June 15, 2005
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MHMR June 15, 2005; Volume 13, Number 11
SPECIAL REPORT: Medicare Drug Benefit Forum...Health Net, Aetna, Horizon-NJ...Walgreens sees opportunity...MCOs likely to win big...United, AARP to co-brand...WPS to acquire Prevea HP...Excellus settles physician suit...CareFirst to buy local plan...MHN to launch Medicare HMOs...UCare expands Medicare HMOs...Aetna, UnitedHealth, WellPoint affirm ’05 profit outlook...BCBS-NC 1Q05 net falls 13%...BCBS-MA 1Q05 net soars 73%...HAP, Cigna form alliance...Amerigroup taps Dunlap, Fox...HMO stocks rise 4%...Services stocks rise 6%...Medco wins SC renewal...Drug costs to rise 12% in 2006...BCBS plans win Mylan verdict...Priority buys SpectraCare...and more...
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AT PART D FORUM: OPTIMISM, CHALLENGES
Healthcare organizations presenting at the first annual Medicare Drug Benefit Forum, June 16, 2005, at the Hilton New York, were optimistic about the opportunities afforded by the Part D legislation; however, most speakers remained cautious and realistic about the challenges to success.
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WPS TO ACQUIRE PREVEA HEALTH PLAN
WPS Health Insurance (Madison, WI) has acquired the assets of Prevea Health Plan (Green Bay, WI), a nine-year-old provider-owned HMO with about 33,000 lives.
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EXCELLUS SETTLES DOC SUITS FOR $7 MM
Excellus Blue Cross Blue Shield (Rochester, NY) has agreed to pay a total of $7 million to settle class action litigation brought by physicians in upstate New York over fee schedules, timetables for claims payments and inadequate guidelines for payment denials.
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CAREFIRST TO BUY MID-ATLANTIC PLAN
CareFirst (Bethesda, MD) has agreed to acquire provider-owned Mid-Atlantic Health Plan, with 31,000 members, from Christiana Care Health System. About 15,000 of MAHP’s members are Christiana Care employees.
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WALGREENS SEES OPPORTUNITY IN MEDICARE PART D
“We’ve done a very poor job with cash customers. We’ve basically kicked them out of our stores and given them to Wal-Mart and Costco,” said George Flaherty, vice president of managed care services for Walgreens Health Services, a unit of Walgreen Co. (Deerfield, IL).
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MCOs PART D SHARE TO MIRROR MEDICAL, MERCURIO SAYS
Managed care organizations will grab the bulk of the Medicare Part D market, with the share levels likely to mirror their penetration in the medical market, according to Carl Mercurio, president and publisher of Corporate Research Group Inc. (New Rochelle, NY).
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SC TO RENEW PBM CONTRACT WITH MEDCO
Medco Health Solutions (Franklin Lakes, NJ) said it expects to win a three-year extension to provide pharmacy benefit management services to the state of South Carolina’s 356,000 employees, retirees and dependents. Annual drug spend is $388 million.
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DRUG COSTS TO RISE 12% IN 2006, EXPRESS SCRIPTS SAYS
Express Scripts (St. Louis) said in its ninth annual Drug Trend Report that drug costs are projected to rise 12% in 2006 among organizations that don’t work to increase generic use through programs such as tiered copays, step-therapy, or consumer-directed benefit designs.
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BCBS PLANS WIN ANTITRUST VERDICT AGAINST MYLAN
A group of four health plans led by Blue Cross Blue Shield of Minnesota (St. Paul, MN) won a $12 million jury verdict in a four-year-old antitrust lawsuit against generic drug maker Mylan Laboratories Inc. (Canonsburg, OH).
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METROPOLITAN TO BEGIN MEDICARE HMO PUSH IN JULY
Metropolitan Health Networks (West Palm Beach, FL), which provides health benefits to nearly 30,000 Medicare Advantage members through risk contracts with Humana, will begin marketing its own Medicare HMO in six counties in Florida in July: Martin, St. Lucie, Okeechobee, Sarasota, Charlotte and Lee counties.
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AETNA, UNITED, WELLPOINT TO AFFIRM EARNINGS OUTLOOK
Aetna Inc. (Hartford, CT) will reaffirm its previously disclosed 2005 earnings projections of $4.52 to $4.57 per share ($1.374 billion to $1.389 billion based on 304 million diluted shares), the company said in a filing with the Securities & Exchange Commission.
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BCBS-NC 1Q05 NET FALLS 13%
Blue Cross Blue Shield of North Carolina (Chapel Hill, NC) reported first-quarter 2005 net income of $45.9 million, down 13% compared to the same period a year earlier, which the company blamed on increased medical costs, decreased investment income, and investment in technology and staff to serve a growing customer base.
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BCBS-MA 1Q05 NET SOARS 73%; COMPANY REORGANIZES
Blue Cross Blue Shield of Massachusetts (Boston) had first-quarter 2005 net income of $56.1 million, up 73% from the same period a year earlier, on premiums and investment income of $1.37 billion, up 13%.
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HAP, CIGNA FORM NATIONAL MARKETING ALLIANCE
Health Alliance Plan (Detroit) and Cigna Corp. (Philadelphia) will jointly market national, open-access health plans to mid-sized and large groups, giving employers that sign up access to HAP’s southeast Michigan provider network and Cigna’s national network. Coverage will be effective beginning the fourth quarter of 2005.
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AMERIGROUP TAPS DUNLAP, FOX
Amerigroup Corp. (Virginia Beach, VA) has named Frederick Dunlap to the newly created position of senior vice president of health plan operations, overseeing health plans in Texas, Florida and Illinois—three of the company’s seven state health plan operations.
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MAGELLAN EXTENDS PACT WITH WELLPOINT IN KY, OH, IN
Magellan Health Services (Farmington, CT) has won a two-year extension through 2007 to provide managed behavioral health benefits to WellPoint’s Anthem Blue Cross Blue Shield plans in Indiana, Kentucky and Ohio, a contract that generates about $96 million in annual revenues.
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