UNITED HEALTHCARE: Health Plan to Shift Members to Blue Shield
UnitedHealth Group, the nation's second-largest health plan, announced last week its plan to shift nearly one million California members to Blue Shield of California, the Los Angeles Times reports. Under the deal, 225,000 members who are employees of small to mid-size businesses will be transferred to Blue Shield. On paper, Blue Shield is paying UnitedHealth Group $40 million. But instead of offering cash, Blue Shield will allow United to access its provider and hospital networks until the fees total $40 million. After that amount is reached, the two sides will renegotiate the deal, according to Blue Shield Senior Vice President and General Counsel Seth Jacobs. An additional 700,000 members, mostly employees of larger, national companies, will remain under UnitedHealth Group subsidiary Uniprise, but will receive care from physicians and hospitals in the Blue Shield network. The announcement comes shortly after United's decision to pull out of the Medicare HMO market in the state (Bernstein, 7/15). Health plan officials anticipated that the transfers would not affect access to care for members. Jacobs said, "The overlap between their network and our network is greater that 95%. So there should be very few instances where someone's physician with United isn't also a physician with Blue Shield" (Wolfson, Orange County Register, 7/15). The deal still needs approval from the newly created Department of Managed Care (Fong, San Diego Union-Tribune, 7/15). DMC Director Daniel Zingale said, "We will review the proposal to make sure there is not disruption of care" (Los Angeles Times, 7/15). If the deal goes through, the transfer will begin at the end of the year (San Diego Union-Tribune, 7/15).
The Old Bait-and-Switch?
Expressing their concern with the deal, consumer advocates called on Zingale to establish rules for transferring patients and urged the HMO czar to consider an antitrust investigation. Helen Schauffler, director of the Center for Health and Public Policy Studies at UC-Berkeley, said, "The state needs to look at the need for regulating this kind of huge transfer of patients. This opens a door into a whole new area where there hasn't been much attention" (Los Angeles Times, 7/15). Consumer advocate Jamie Court said that the deal could disrupt care and change the terms of coverage that United members already had agreed to. "Giant HMOs should not be allowed to trade patients like they're trading in used cars," he said (Orange County Register, 7/15). Court added, "United Healthcare has aggressively advertised that it was unique because doctors are in control of care. Clearly United Healthcare's promises will be broken if the company is allowed to push patients into Blue Shield, which has different corporate policies." Court concluded, "This could be a very dangerous national phenomenon and have serious ramifications for the continuity of care of HMO patients" (Foundation for Taxpayer and Consumer Rights release, 7/14). United's Pacific region CEO Emory Dameron defended the deal: "It was a business decision that we could more appropriately serve certain market segments without trying to be all things to everyone in California" (Los Angeles Times, 7/15).