New York physicians want possible Health Net deal scrutinized

The reaction comes as a report circulates about the fate of insurer's northeastern U.S. operations.

By Emily Berry — Posted June 25, 2009

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After a news report indicated that New York City-based EmblemHealth was set to buy Health Net's business in the Northeast, the Medical Society of the State of New York sent letters to state regulators raising objections to the takeover.

Citing an already-concentrated market where EmblemHealth's Group Health Inc. and HIP Health Plan of New York are already large players, medical society executives asked New York Attorney General Andrew M. Cuomo and Eric R. Dinallo, superintendent of the state insurance department, to "closely scrutinize" the deal, first reported May 28 by the Hartford Courant.

EmblemHealth spokeswoman Ilene Margolin declined to comment on the potential purchase. Health Net spokeswoman Amy Sheyer said the company doesn't comment on market speculation. But she did say the company was still in the midst of its "strategic review," the company's term for its efforts to sell off business outside of California. Health Net, a for-profit, publicly traded company based near Los Angeles, is hoping to save money by concentrating its operations on the West Coast.

EmblemHealth's Group Health Inc. and HIP merged in 2006 to become EmblemHealth, with 3.4 million members. Its 2007 application to convert to for-profit status is pending. MSSNY opposes the conversion.

Emblem's market power means doctors are faced with take-it-or-leave-it contracts that in many cases reimburse doctors below Medicare rates, said Jordan Levin, president of practice management consulting firm Levin Business Solutions, based in New York.

Those low rates, "end up pushing doctors out of the network," he said.

Moe Auster, counsel to the division of government affairs at MSSNY, said "we know our insurance department and attorney general's office have been interested in recent years over ways to ensure patients are not getting shortchanged by their health insurance companies, and we thought this was something that they would be interested in taking a closer look at."

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