Cambia/Regence Investment in CoPatient Raises Questions

OSPIRG suggests there’s a potential conflict of interest between an insurer and a company designed to help people find errors and overcharges on their insurance bills

November 21, 2012 -- A potential conflict of interest exists between an organization set up to help people resolve their health insurance bills, known as CoPatient, and the non-profit parent corporation of an insurance company, Cambia Health Solutions which derives its income from the investment portfolio and surpluses of Regence BlueCross BlueShield of Oregon and other Regence plans in Washington, Idaho and Utah.

That’s the concern of Jesse Ellis O’Brien, the healthcare advocate for OSPIRG, a consumer group that stands up to powerful interests.

“It does seem to me like that to me since insurance companies have a fair amount of leverage over the way in which medical billing works and having an entity that potentially benefits from consumer confusion in medical billing creates some tricky issues. There has to be a better way of dealing with problems than setting up consumer assistance companies.”

When CoPatient finds mistakes or overcharges by an insurance company or medical provider, it receives 30 percent of the total savings.

Other people question why Cambia invested in such a company rather than asking Regence to do a more effective job catching such errors and overcharges instead of asking their members to pick up the tab.

It’s also unknown how much Cambia actually invested in this company since its co-founders, Katie Vahale and Rebecca Palm, have refused to disclose that information. Those details, however, may emerge when Cambia submits its annual financial report to the Washington Insurance Commissioner next year.

In the past few years, Cambia has invested more than $30 million in other for-profit companies, not all of them successful.

The company ended up losing $13.2 million, for example, after Mark Ganz, CEO and president of Cambia, authorized the purchase of Kinetix Living Solutions, a fitness company, and spent nearly double the market share, which had an estimated value of only $8.9 million at that time. Another $4.9 million was spent to keep the company afloat, to no avail, before it was shut down, according to documents filed with the Oregon Insurance Division. Also, over the past two years, Regence has transferred $128 million to Cambia Health Solutions.

Responses from CoPatient

When asked about how their company works and the seed investment by Cambia, Rachel Mortensen, public relations consultant for CoPatient provided the following information:

Q: Please comment on your decision not to disclose the amount of seed investment you received from Cambia.

“We accepted capital investment in order to fund the development of our technology platform. This platform is what distinguishes us from other advocacy providers as it allows us to deliver to reach a greater number of consumers across a wide array of billing issues.”                            

Q: What makes CoPatient different from other advocacy groups working to help patients with their healthcare bills?

“CoPatient's web-based technology platform is what differentiates us from other companies providing patient advocacy. The combination of automation and analytics, coupled with experts in the area of healthcare billing, offers patients a level of advocacy that doesn't exist elsewhere.  Because a growing population of consumers is becoming more adept at conducting their lives via technology - smart phones, tablets, laptops, etc - our online portal and technology tools make it easy to streamline the process from initiation to resolution. The system is accessible, responsive and results driven, regardless of the size of the bill in question.    

“Our approach toward advocacy supports collaboration to increase transparency and cooperation between all parties with a goal of creating a system that fosters consistency, accountability and integrity.  Ultimately, this is a benefit not only to the consumers, but the system at large.”

Q:  CoPatient reviews bills from providers and EOBs from insurance companies; isn't this the job of the insurance companies?

“The average patient will not catch errors in billing or coverage because the information is too complex. Our goal is to help demystify the process for the patient and as a result, create integrity within the system.”

When Regence was asked about its investment in CoPatient, here’s their response from spokesman Scott Burton:

“Supporting the healthcare consumer is core to our cause and compliments efforts such as chronic condition case management services and cost transparency services already offered by our health insurance plans. The company is an advocate for consumers, and is well-positioned to assist patients through expert insight.  Cambia is supporting CoPatient, as their mission is directly aligned with Cambia’s efforts to create a person-focused and economically sustainable healthcare system.”

TO LEARN MORE

To learn more about the investments undertaken by Cambia Health Solutions on behalf of Regence BlueCross BlueShield, click here and here.

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