For Medicare Advantage insurers, health systems, and investors weighing acquisitions in a volatile managed care market, a policy shift from CMS could reshape how and when deals get done.
"CMS Eases Path for Medicare Advantage Takeovers," published by Modern Healthcare, reported on new CMS guidance allowing Medicare Advantage insurers to expand their service areas midyear when acquiring a struggling competitor, rather than waiting for the annual June bid cycle. Helaine I. Fingold, Member of the Firm of Epstein Becker Green and counsel to Medicare Advantage, Medicaid, and other managed care plans on federal compliance and program oversight, explained how the prior rules constrained the pool of potential buyers for distressed plans.
Fingold described how CMS previously required buyers to shut down any acquired plans located outside their existing market and wait until the next bid cycle to request expansion, a rule that discouraged acquisitions of struggling insurers altogether. The new flexibility is intended to help preserve enrollee coverage when a plan is at risk of exiting the market entirely.
"If a plan that's currently out there is having issues or struggling, it's better to have another entity come in and pick that up to maintain coverage, rather than for the entity to go out of business," Fingold said.
Get in Touch
To discuss how this new CMS flexibility may affect your organization's Medicare Advantage acquisition strategy and compliance obligations, contact Helaine Fingold at hfingold@ebglaw.com.
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