California agency approves Aetna’s purchase of Humana

“The Department’s primary focus in reviewing mergers is to ensure compliance with the strong consumer protections and financial solvency requirements of the Knox-Keene Act,” said Director Shelley Rouillard. “The Department’s conditions on this merger will help control health care costs, increase access to care and improve quality of care. Aetna also has committed to help improve California’s health care infrastructure, and invest in programs that will serve the vulnerable populations enrolled in these plans.”

The DMHC examines proposed health plan mergers to ensure enrollee health care rights are protected and that enrollees have continued access to appropriate health care services.

As a condition of approving the acquisition, the DMHC successfully negotiated several commitments, referred to as undertakings, that will help control health care costs, expand access to care and improve quality of care. The undertakings include:

• Aetna has agreed to keep HMO Small Group premium rate increases to a minimum and to increased oversight in the DMHC rate review program.
• Aetna will keep key functions and operations such as medical decision making and enrollee grievance and appeals systems in the state.
• Aetna will improve quality of care measured through rating and oversight programs under the National Committee for Quality Assurance and Office of the Patient Advocate.
• Aetna will make several community investments over the next three years to educate at-risk populations on their health care rights, increase access to care for low-income and underserved communities, and improve California’s health care infrastructure. These investments are:
  • $6 million to support consumer assistance programs to help seniors and persons with disabilities understand their health care rights.
  • $3 million to provide dental services in low-income and/or underserved communities and scholarships for dentists to be trained to serve young children (ages 0-3).
  • $23 million to strengthen and support the health care industry in the economically distressed community of Fresno through the expansion of a service center.
  • $1 million to expand telehealth services to increase access to mental health care and reduce unnecessary emergency room visits.
  • $16.5 million in California’s health care infrastructure to support accountable care organizations and pay for performance programs.