On April 20, Healthcare Dive updated a story we’ve been following about the acquisition of telehealth company MDLive by Evernorth, the recently re-branded primary health services umbrella group of Cigna. The Dive story confirms that, as part of Evernorth’s expanding portfolio, MDLive will join pharmacy benefit manager Express Scripts and a host of other inter-related healthcare services.
To us, the timing is of note. The deal comes as the light finally appears at the end of the COVID-19 tunnel, which could give insurance companies justification for reconfiguring reimbursement for the telehealth services that have seen such a boom during the pandemic. It’s no secret that covering telehealth could pose a threat to insurers’ profit margins.
Speaking of profits, an SEC filing indicates that Cigna was anticipating full-year revenue guidance of at least $165 billion by March of this year, with adjusted income from operations—including the MDLive acquisition—expected to be at least $6.95 billion in 2021.
With all of this projected revenue, the question is: Will the lucrative addition of MDLive be enough to curb the costs of covering telehealth visits? Or will Evernorth follow suit with other insurers’ track records of pushing back against telehealth coverage and claims, and underpaying physicians who provide telehealth visits? Another question is whether this acquisition sparks a trend of insurers buying up telehealth companies that they formerly just partnered with, in order to retain more profits. Vertical integration: blast off!