Archive for the ‘Highmark’ Category

I don’t think I’ve seen this one yet.  The state Department of Insurance put out a “Notice” this past Friday (see notice below), warning insurance agents that, “. . .producers offering this product [Highmark Community Blue Medicare Advantage HMO], which may be inconsistent with the Consent Decree, may run the risk of violating Pennsylvania’s Unfair Insurance Practices Act (40P.S. 1171.1) et seq., and its prohibition of making false or fraudulent statements, or misrepresentations in the context of the sale of an insurance product.”

Although the product has been approved by CMS for sale in certain Western PA counties, CMS does not preempt state insurance law.  This puts agents in an odd position of (possibly) violating state insurance law by selling a product that CMS approved.  What’s more, the notice came out on 10/10/14, five days before the Annual Enrollment Period starts.

We are hoping that this gets resolved quickly, however, in the meantime, our position is that insurance agents heed the warning from the PA Department of Insurance and not offer the product until a determination can be made as to whether this is a “legal” or “illegal” insurance product.

Click Here to Read the Notice:  PA DOI NOTICE

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Highmark Replaces CEO

This just came out this morning from the Pittsburgh Tribune:




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Currently, there are 4 Blue Cross Blue Shield affiliates in Pennsylvania.  Assuming the closing of this recently announced merger, there will be 3.  Blue Cross of Northeastern PA (BCNEPA) has about 500,000 insurance subscribers and about $750 million in annual revenue.  Their stated surplus is $258 million at the end of 2012.

As a part of the merger, Highmark and BCNEPA will donate $100 million to a charity to promote the health and economic development in BCNEPA’s subscriber area.

In the past, Highmark and BCNEPA had collaborated on some products, including Medicare advantage.  BCNEPA’s desire to merge had more to do with their need to achieve economies of scale to effectively compete in light of the Affordable Care Act.

The primary remaining competitor in Northeastern PA is Geisinger Health Plan.

The merged companies will have approximately 5 million members, revenues of $16 Billion, and will cover 62 of the 67 counties in Pennsylvania.  The remaining Blue Cross affiliates in PA are Independence Blue Cross and Capital Blue Cross.

More details on the story can be found on the Insurance News Net website.

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Here is the story from the Pittsburgh Tribune-Review.  Highmark is the largest health insurer in Pennsylvania and an affiliate of the BlueCross and BlueShield Association.  The closing of the deal with Jefferson, valued at $350 million, gives Highmark an anchor hospital in the South Hills of Pittsburgh.  Highmark is also trying to finalize an approximately $1.1 billion acquisition of the West Penn Allegheny health system.  The West Penn deal is pending regulatory approval of the PA State DOI.

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Highmark CEO Fired

This goes into the “stranger than fiction” file.  Highmark is one of the largest health insurers in Pennsylvania.  The CEO of Highmark was fired by the board in an emergency meeting when a police report was released which alleged that the CEO was arrested for trespassing onto the property of his mistress (and her husband) and assaulting the husband of his mistress after an altercation.

Here is the story from Business Week.

Here is a version from the Philadelphia Inquirer.

At this point, I don’t believe Highmark has announced a permanent replacement.  According to the Wall Street Journal, the company is being led by J. Robert Baum until a permanent replacement is selected.

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Highmark is selling off their Medicare claims processing business in order to clear a regulatory path regarding their acquisition of West Penn Allegheny.  It appears that Highmark is more interested in vertical expansion within the health care space than growing horizontally with ancillary Medicare service businesses.  A Highmark EVP is quoted as saying that they plan to expand more into the medical provider business.

I’ve noted the vertical expansion into the health care space by managed care companies in prior posts, for example, Humana and United Healthcare.

Here is an article from the Pittsburgh Tribune.

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The story is from the Pittsburgh Tribune-Review.  Highmark is looking for injunctive relief to block University of Pittsburgh Medical Centers (UPMC) from airing ads which talk about the termination of portions of their contract with Highmark in June of 2012.

UPMC is considered a very important medical provider in the Pittsburgh market.

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