At the behest of readers and clients, I’ve been working to get some answers from Aetna on what exactly the ‘restructuring’ of their workers comp business division means for customers and prospects. I’m not having much luck.
I’d note that many AWCA customers learned of the restructuring of AWCA from my post earlier this week. That’s not to blow my own horn (well, perhaps a modest toot) but rather to point out that Aetna did not make any external announcement – and still has not made any public statement – about the changes. Nor has any there been any attempt on the part of the new management to reach out to (at least some and perhaps all of) the largest users of AWCA. AWCA Account management staff has been calling their customers, but beyond the “it’s business as usual, I’m your contact”, they don’t have much to report.
Here’s the text of a recent email from an Aetna communications staffer in response to a blog post re the changes. The author is Dr. Dan Bernstein, the head of the New Product Businesses unit. (Bernstein graduated from medical school but never practiced medicine)
“We would like to take the opportunity to clarify a few of the points you made in today’s posting [referring to this post]. We want your readers to understand that the New Product Businesses network and operations areas have not been merged with Aetna’s Group Health network and operations organizations. We have brought together the network and operations teams for the Cofinity, AWCA and Aetna Signature Administrators businesses under two leaders because these businesses all serve business partners, including other Insurers, TPAs and Bill Review companies, that are outside of Aetna’s traditional business channels. [ok, but the markets are completely different, with different providers, different ‘quality’ measures, different buyers, different reimbursement methodologies] Importantly, the network and operations functions described are still separate for AWCA.
[sources indicate the comp network staff now report up to an exec in Maine, sales reports to Denver, operations staff to personnel in the PPOM business (now called Cofinity) in Michigan, and account management to a different person in Maine; Bernstein is located in Maine as well]
The changes we announced this week will help us maximize our resources to create better value for our customers. We see these changes as benefiting our customers by allowing us to concentrate on building our network, providing consistently superior customer service and offering our customers innovative solutions to address their business needs.”
This left me, and others, looking for just a bit more depth and detail. So, I emailed the quite-helpful PR staffer; here’s the ‘conversation’:
Paduda question
Does he [Bernstein] mean there are staff dedicated to WC within each unit? If so, what is their relationship with the larger Aetna provider relations units? Do they work together? Who decides on negotiation strategy and tactics? If not, how does Aetna leverage it’s group health buying power to benefit WC customers?
Aetna response
The AWCA Operations and Network teams are still distinct, dedicated units. They simply report up to new managers, alongside other similar units.
The AWCA Network team has always worked collaboratively with the larger Aetna provider contracting teams, and will continue to do so. The negotiation strategy is jointly developed. The combined size and strength of the relationship with providers across all businesses benefits all customers, including Workers Comp customers.
Paduda question
How will this change affect the network development process? Florida has been an ongoing challenge for awca; is the new structure going to help Aetna address FL?
Aetna response
We are always striving to improve the network development process and strategy. The new leadership team is focused on both strategic and process improvements for our network activities.
So, no answer to the Florida question, nor any sense for how this change will affect network development. A good bit of corporate-speak, and no specifics. I tried one more time to get more specific answers, and got this back: “at this point, we can’t share additional information.”
Either they haven’t thought this through (my bet), or they have and haven’t finished telling the affected parties (doubtful), or they just don’t want to tell me (possible). If the latter is the case, they aren’t telling some of their biggest customers, either.
Here’s a bit of background. Despite the conjecture of several, myself included, that Aetna would get out of this business, Aetna has stuck by its work comp unit for five years (to date). Reports indicate the business has been financially successful, profitable, and achieving success defined as “aspiring to be a rounding error” at mother Aetna (remember Aetna’s annual revenues exceed $24 billion). This success has occurred despite the unit being bounced around the org structure at Aetna, with former AWCA president Pat Scullion reporting up to (at least) five bosses over the last four years.
I’m from Missouri on this. Many health plans/insurers that got into work comp (United Healthcare in FL, with Focus and MetraComp, Travelers with Conservco, UNUM with Genex) got out. Some, such as UPMC, Wellpoint and Horizon, have done pretty well. The ones that have succeeded have almost always had WC as a separate business unit with P&L responsibility reporting up to a ‘special products’ department (that likely had dental, vision, etc). They also had a strong executive sponsor, someone who could, and would, go to bat for the WC network development staff when the group health folks (understandably) started to cave on WC rates to get a better discount for their group health business.
But that’s not the most important reason to have a separate WC division. The most important reason is simple – WC is so fundamentally different from group health that the network development/provider relations, operations, compliance/legal, customer service, and sales staff will find themselves spending most of their time explaining WC basics to their support staff/management/peers – first dollar every dollar coverage; treatment is limited to procedures related to the disabling condition; focus on return to work; and the primacy of fee schedules, that they won’t have much time to resolve issues related to California cascading rules for PT, Florida limits on chiro visits, pre-cert requirements in MA and NY, MPN access requirements in California, EDI requirements in Texas and the gazillion other small but critical-for-compliance comp rules.
The ones who should be the most nervous/interested in this have “Coventry Workers Comp” on their business cards. Coventry has essentially turned network development and management in more than a few states over to AWCA. If Aetna decides to get out of the comp network business (again, I doubt this will happen), Coventry is going to have to scramble.
Aetna’s a good company. Even good companies make mistakes, and they’ve made a few here. This has not been handled well; from here it looks like AWCA management was ousted in a cost-cutting move, replaced by folks who don’t know much, if anything, about workers comp, or about managing a transition.
What does this mean for you?
Be careful and have a Plan B.
Sep
26
Joe,
I only found out about this development through your post and was quite
upset that AWCA did not notify me directly. As you know, AWCA already
has many problems in PA that we are currently suffering through. First
and foremost, they are applying discounts to bills for which they have
no signed contracts. Worst yet, they are applying discounts to
providers’ bills who cancelled with them years ago. They issued “opt
out” letters to a slew of providers earlier this year and if the
providers did not respond, they were automatically entered into AWCA’s
discounted network on May 1. We receive phone calls from irate
providers on a daily basis contesting these discounts and we and our
clients are left in the dust as AWCA has no signed contract with the
provider to defend the discounts. AWCA has had a major problem applying
discounts incorrectly when multiple service units are billed resulting
in greater discounts than allowed. Providers are contesting the
discounts and we have had to issue reconsideration EORs and refund our
clients access fees. It’s has been a nightmare of epic purportions.
One of our large panel development clients requires that we only list
AWCA providers on their WC panels. A mistake in my opinion for various
reasons, but nonetheless, one of their requirements.
Most importantly, we have to personally verify the demographic
information as AWCA’s network information is highly inaccurate. There
are hospitals listed in their network database that have been closed for
5 or more years, practices that have closed years ago, deceased
providers, incorrect address and telephone info, incorrect specialties,
etc. Their clients sadly have to pay us to “clean the data” and
maintain the current info and it is unreliable and cannot be used to
create functional provider panel listings.
Before Tom Shivers came to ACWA from Concentra, AWCA’s network was not
operational. It was due to Tom’s exceptional sales efforts and WC
knowledge, that carriers and repricing companies like ours decided to
use AWCA in lieu of FOCUS. I have no doubt that AWCA would have tanked
without Tom’s aggressive and persuasive sales efforts.
The FOCUS network could not compete with the AWCA hospital discounts as
they had no group health insurance purchasing power to obtain the
exceptional hospital discounts that AWCA has been able to achieve. Thus
the reason Conventry has discontinued using their own FOCUS/First Health
networks in favor of leasing AWCA’s network.
Now, where does this leave all of us AWCA’s customers? Well, quite
frankly, they have us by the short hairs. There is no Plan “B” and
AWCA knows this. They have Coventry’s customers through Tom’s efforts
and they have all of us who have no other options as there are literally
no networks, other than the very ineffective ones to access. They are
now effectively a monopoly.
They no longer have to invest any time and effort in marketing or
providing a quality service to their customers. They have the “take it
or leave it approach” and until some entity with group health purchasing
power such as Highmark in PA moves into this WC PPO network business, we
have no choice but to stomach them.
This change also allows them to save the salaries of Tom and the others
who single-handledly built this business sector for them into what it is
today. Shrewd, but factual.
Corporate America at it’s worst. No loyalty to their staff or
customers.
So, what is really our Plan “B”? It’s to convince Highmark to enter
this business and compete with AWCA so that we can treat AWCA the same
way they have treated us and tell them to go fly a kite!