Payer-provider M&As face 'challenging' regulatory environment
Insurers will continue to face a "challenging" regulatory environment, requiring them to make critical decisions this year--particularly when it comes to merging with and acquiring providers, according to a new report from Deloitte.
The Affordable Care Act brought widespread change to the healthcare industry, and some insurers look to gain a competitive advantage by aligning with providers. For example, Minnesota's HealthPartners merged with health system Park Nicollet Health Services in a deal that included five hospitals and created a payer-provider powerhouse, FierceHealthPayer previously reported.
Meanwhile, some large hospital systems launch their own health plans, including Atlanta's Piedmont Healthcare, Detroit's Ford Health System and New York's North Shore-LIJ Health System, in an effort to create seamless care and save costs.
Deloitte advised insurers that they'll see ongoing changes in healthcare regulations. "Given the turbulent state of the healthcare industry, both health plans and providers can anticipate continuous change and evolution of regulations," the report said.
As such, Deloitte recommended that insurers make certain they clearly understand the risks and benefits of merging with or acquiring providers, as well as determine whether the relationship will truly be beneficial. "For organizations that are combining these different types of entities, attention should be paid to new forms of risk that will arise," Deloitte added.
Deloitte also warned that insurers must be "mindful of compliance implications." Since they generally aren't familiar with provider regulatory requirements, they risk violating various laws and regulations. "Given the highly regulated space, due diligence would be required across the spectrum of services," including claim submission and reimbursement conditions as well as anti-kickback and self-referral statues, the report said.
To learn more:
- here's the Deloitte report
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