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Anthem is paying $594 million to settle Blues antitrust settlement

Non-COVID-19 utilization is back to 95% of baseline, and, when coupled with the cost of COVID-19 care, overall utilization is above baseline.

Susan Morse, Managing Editor

Anthem is paying $594 million as its share of an antitrust settlement involving Blue Cross Blue Shield plans.

Blue Cross Blue Shield reached a tentative $2.7 billion antitrust settlement to resolve claims that the insurer's group member companies conspired to limit competition and boost prices by dividing up market areas, according to Reuters. Anthem operates Blue Cross and Blue Shield plans in 14 states.

Anthem CEO and President Gail Boudreaux said during the company's third quarter earnings call last week that the agreement went beyond monetary terms. Anthem is allowing for some larger national employers with self-funded benefits to be able to request to bid for insurance coverage from a second Blues plan, in addition to the local Blues plan.

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Boudreaux reported third quarter earnings per share were down 14% over the prior year quarter. 

"Our results in the quarter reflect the impacts of ongoing COVID-19 treatment costs, the continued return of a more traditional utilization environment, as well as our ongoing commitment to address financial imbalances to our customers and members."


As many companies have done during the pandemic, Anthem has transitioned the majority of its workforce to home and is assessing its real estate footprint.

"With the insights from this experience, we are reimagining our workplace to the reduced real estate footprint, more selectable work practices and evolving our offices to serve as collaboration spaces when safely able to do so," CFO John Gallina said.

High growth and high impact areas for the company include AI and digital, Gallina said. 

At Investor Day last year, Anthem shared its vision for modernizing its business by consolidating systems platforms, automating and reimagining processes, and embedding digital and AIs across the enterprise to simplify and improve the customer experience, Gallina said.

"The charge this quarter enables us to enhance our speed to market as an enterprise to streamline our operations, accelerate our digital journey and ultimately deliver a better experience for those we serve," he said.


Since the end of the first quarter, enrollment in Medicaid has more than doubled. Anthem's Medicaid membership growth is approximately ten times that of the decline in its commercial risk-based members. 

Medicaid growth is up 4.8% quarter-over-quarter and almost $389,000 over the second quarter. 

Overall membership trends are outperforming internal expectations. Anthem's commercial membership declined 0.9% sequentially, which beat expectations in both its risk and fee-based businesses.

Anthem is also experiencing double-digit growth, year-over-year, in its Medicare Advantage business. Medicare business growth has increased more than 16% year-to-date and is outperforming the market average. Anthem expects another year of mid-double-digit growth in 2021, the company said. 

For 2021, Anthem expects to see nearly 90% of its members in $0 premium plans for 2021 as it continues to the fourth quarter.

The recently released star scores for payment year 2022, however, were disappointing, executives said, with its pharmacy scores being the single largest driver of underperformance.

Anthem Medicare Advantage members transitioned to IngenioRx on January 1, which limited the company's ability to improve its pharmacy scores in the latest measurement period.


Since the onset of the health crisis, telehealth now comprises 40% to 50% of all behavioral health services compared to low-single-digit utilization pre-COVID-19.

Non-COVID-19 utilization in the third quarter largely returned to normal levels or roughly 95% of historical baseline. When coupled with the cost of COVID-19 care, overall utilization was above baseline.


On October 28, after Anthem's earnings call, Centers for Medicare and Medicaid Services Administrator Seema Verma said private insurers must cover the cost of a COVID-19 vaccine at no expense to beneficiaries. This includes administrative costs.

Executives were asked about vaccine coverage during the Q3 call. 

"I think, while you are focused on vaccines, no one really has the ultimate answer at this stage, where we are watching the situation very closely and learning about the potential," Boudreaux said. "We've modeled a lot of scenarios into our pricing."

Anthem also said it knows this year's flu season is going to be particularly challenging in combination with the rising spread of COVID-19. Anthem has launched its fall flu campaign, partnering with over 100 community-based organizations to stand up more than 500 pop-up and drive-thru clinics providing free flu shots in underserved neighborhoods.

Twitter: @SusanJMorse
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