Transcript of Conference Call on the CVS/Signify Health Merger

Sep 15, 2022

On September 9, Teddy Downey, Lisa Epstein and Vikas Kumar discussed The Capitol Forum’s in-depth reporting on Signify Health in the context of its pending merger with CVS. The full transcript, which has been modified slightly for accuracy, can be found below. 


TEDDY DOWNEY:  Thank you. And happy Friday, everyone. Thanks for joining today’s conference call on the CVS/Signify Health merger. I’m Teddy Downey, Executive Editor here at The Capitol Forum. And with me today are Lisa Epstein, Correspondent on our Corporate Investigations Team and Vikas Kumar, our Senior Editor for the Corporate Investigations Team. And they’ve spent a ton of time digging into Signify Health and I’m excited to chat with them.  


A quick note before we get underway. The first 20 minutes or so of the call will be an interview, and then we’ll move into a Q&A format where we will entertain questions from the audience. If at any time during the call you have questions for us, please email them to And Vikas and Lisa, thanks so much for doing this today.  


VIKAS KUMAR:  Thanks for having us.  


LISA EPSTEIN:  Thanks, Teddy.  


TEDDY DOWNEY:  So the Corporate Investigations Team looks into a lot of health care companies. And I was wondering if you could talk about how you decided to dig into Signify Health.  


VIKAS KUMAR:  Sure. So over the past few years, we’ve done a lot of work on companies that could engage in a practice known as risk score gaming to artificially inflate how sick patients are to capture higher revenue or more money on a monthly basis from Medicare Advantage plans. We did a bunch of work on a company called InnovAge and then Dr. Gilfillan, who formerly headed up CMS Innovation Center, wrote some articles on the “Medicare money machine.” And there’s been some OIG reports on in-home risk assessments. So we decided to dig into Signify which conducts these in-home risk assessments.  


TEDDY DOWNEY:  And what did you and Lisa find when you were investigating? 


VIKAS KUMAR:  Lisa, do you want to do that? 


LISA EPSTEIN:  Well, we found that Signify Health, basically their main business line was sending out contract clinicians, nurse practitioners and physicians, into patients’ homes that are enrolled in Medicare Advantage plans that are Signify customers. And they rush throughout their day to gather as much data and diagnoses codes as possible so that those codes can be submitted by the Medicare Advantage plans to CMS to increase the capitation payments from CMS. And we heard an earful from Signify employees from the call center which schedules the members and from the clinicians and from employees in other areas at Signify.  


TEDDY DOWNEY:  And what were some of the issues and problems you found that were sort of most alarming or some of the stories that you heard that were most troubling from either a medical standpoint or a legal standpoint or a policy standpoint? 


LISA EPSTEIN:  So starting with the call center, I’ll start with that. It is run truly like a telemarketing center where there is an intense pressure on the agents to make a certain number of calls per hour, a certain number of visits booked. They would recycle phone numbers back into the phone dialer no matter how many times the member declined. These are seniors and they would just call the seniors over and over and over, even if they said take me off the list. And there was a tremendous amount of pressure inside the call centers to meet metrics, to compete against each other for getting the most bookings. And the people that were hired, or who I spoke to, they were hired under the pretense that they would be helping seniors achieve better health service or free service that would be offered to them. And they quickly learned that it was just sales. And each one that I spoke to felt very uncomfortable with the aggressiveness of that process. And then from the clinicians, Vikas, do you want to talk a little bit about what the clinicians were telling me?  


VIKAS KUMAR:  Yeah, I was going to say also, with regards to the call center, the high intensity quota system frequently led to sometimes misrepresentations regarding what services were being provided. And these complaints are easily found online where people have complained about repeated phone calls, and confirmed by the clinicians that we talked to who seem to suggest that a lot of times the people whose houses they would be going into simply agreed to the in-home assessment to stop the calls or the unrelenting calls. And they just told the engagement agent, “I agree, but I don’t really want you here.”  


So right off the bat, with a lot of the clinicians we talked to, there’s sort of an—it’s sort of a hostile interaction, right? You’re going to someone’s house who doesn’t necessarily want you there. Or someone who feels like they’ve been harassed into having you come there. And before the clinicians even get there, I think the scheduling system that the company operates, which they claim to have spent a lot of money improving the R&D, the scheduling system is pretty not great in terms of figuring out the most efficient routes for these clinicians to travel. And so we’ve seen clinicians routes. We’ve seen their maps. And they’re expected to be at a new appointment every hour on the hour. And that appointment can be all the way across town or really far away. So that leaves very little time for them to actually sit down and talk to the patient. I think the company claims that, I think, that clinicians spend 45 minutes at the kitchen table with their patients. But our experience with all the clinicians we spoke to is that there’s not really that much time for the actual in-home assessment to take place. Lisa, do you want to talk about what happens inside the assessment or how all that stuff is populated? 


LISA EPSTEIN:  Yes, just let me elaborate a little bit more on this. The logistics and routing system is touted by the CEO and other executives during earnings calls. But when I spoke to the clinicians, they universally detested this program. And the way that the scheduling works is—for the schedulers, the agents, the telemarketing agents—just a schedule pops up with open slots. So your area, there’s a clinician at 2:00 in the afternoon and 4:00 in the afternoon. Or the next day, it’s at 9:00 and at 2:00. They don’t see where the clinician was for the visit before or the visit after.  


So often clinicians are sent literally zigzagging across the county. And they are scheduled either 60 minutes—the visit starts 60 minutes on the hour of every hour, with that drive time included in that 60 minutes. Signify just reduced it to 45 minutes, their scheduling time. And often, clinicians end up with nonaddresses or a gas station address or the middle of a field. And if they want to reroute the patients the night before, just call the patients and put them in their own route, that is uncompensated time. And on top of that, Signify’s policy is if you don’t get an answer, if you call to confirm the visit, nobody answers, you go anyway. And if a clinician goes to the house and there’s no one there or the person refuses the visit, they don’t get paid. So they spend the time to travel there and the gas to travel there and they don’t get any compensation for those visits.  


So the visits themselves consist of the clinician, typically nurse practitioners – there are some physician’s assistants, some doctors—open a program on a Signifyprovided laptop and there’s 200 questions or so that they have to fill out in an interview like process and a very brief physical exam. A lot of the information could be prepopulated from the information sent from the health plan, the Medicare Advantage plans, including diagnoses and medications. And sometimes it’s not pre-populated at all.  


And then the exam is a very brief physical exam, plus some other assessments like cognitive assessment. There might be some tests, like a test for blood sugar levels or a test that measures veneous insufficiency of blood flow to the extremities. They’re starting to do some like a pilot program to test for, I guess, lung capacity. And then if the clinicians find a finding, they can diagnose chronic condition diagnoses that would increase the money from CMS to the Medicare Advantage plan. It’s very controversial. Because a lot of these tests really shouldn’t be done on the fly in someone’s home. And there’s a question whether there’s any kind of true follow-up given to these patients.  


TEDDY DOWNEY:  What opened the door for this? Where did Signify come from? Why is this happening now? How did they think, oh, let’s set up a call center to go do this and people come? Like what opened the door for this? 


LISA EPSTEIN:  Well, there was a private equity company that New Mountain Capital owned or acquired—I think Advance was one of the companies and then the other one was Censeo that had been doing these risk assessments. And they acquired those two companies and brought them under the name of Signify Health. These assessments have actually been going on now for a decade or so with increasing alarm from regulators and government spending watchdogs. And CMS has put out a few concerns and others, OIG over HHS has also— 


VIKAS KUMAR:  Members of Congress as well.  


LISA EPSTEIN:  Yes, a lot of sounding the alarm that maybe we are being bilked for payments that are inflated because of these risk assessments. 


TEDDY DOWNEY:  And how much of Signify’s business would be categorized under this sort of like potentially a red flag or potentially a concern to policymakers or lawmakers that a lot of their business—or how would you guys describe that?  


VIKAS KUMAR:  Well, it’s interesting, and I think this is also probably worth mentioning – and Lisa can elaborate on it a little bit more. But recently, Signify has reorganized and jettisoned some of its lines of business that were actually focused on patient care. So I think the bulk of it now is really this in-home risk assessment business. And then there’s also some services provided by Caravan, which was a recent acquisition. But I think points that I think are interesting here.  


One, in terms of the last question about why Signify is doing this and setting a call center up. It’s interesting. In our work, we talked to a lot of employees who worked at call centers and operations that Signify actually acquired. And again, those are people that were focused on providing care to patients and trying to legitimately help people. And they shared their experiences pre-Signify and postSignify and how post the acquisition of the call center, Signify turned it much into a call center with high quotas and how those people didn’t feel like they were able to provide the services that they wanted.  


And then the other thing that was interesting is that there are a lot of business lines. Like there’s a transition to a home business line that was designed to basically help patients that were being discharged from hospitals and set them up to make sure that they had all the services they needed. And the call center agents that we talked to there were social workers, people that were legitimately trying to help people again. And the high call quota made it so that they could not effectively help people. And a lot of corners ended up getting cut, such that people wouldn’t be getting the services they needed, what they needed after being discharged from a hospital. And Lisa, do you want to elaborate sort of on what the business looks like now and other things that they’ve gotten rid of? I think that’s interesting as well.  


LISA EPSTEIN:  Yes. So I talked to many current and former employees that were very upset at the change in culture, increasingly pretty much over the last year to a moremetrics driven, meeting quotas and less and less and less emphasis on actually improving the lives of the members that they were serving. As Vikas said, this transition to home program, which was under the episodes of care umbrella, has completely changed from having educated people with masters degrees, social workers, who had previously been contacting patients who were being discharged from the hospital to make sure everything was in place, go over the discharge instructions and call them on a regularly timed basis. Making calls on day one, day seven, day thirteen and so on, for 90 days. All of a sudden it became you have to make 200 calls—I forget the exact number, but it’s a high number of calls per week was more the emphasis than actually any kind of outcomes for the members.  


And they also had other programs that were just getting off the ground. They had implemented them in 2021. A biopharma piece where they were sending nurses out to give study drugs to MS patients, multiple sclerosis patients, and to pediatric cancer patients. Then all of a sudden that program was just dismantled. They had something called in-home assessment plus or IHE+ that helps assess and meet social determinants of care needs which is a big focus of CMS right now. That’s gone. 


So it seems like to us that the programs that they had that actually would improve the lives of seniors, members, the health care members, and help add value to their health care services were just completely dismantled over the past three to four months. And now the focus is on doing as many of these in-home riskassessment visits as possible, adding more and more tests to harvest more diagnoses codes during the in-home visits, and also the acquisition of Caravan, which is still kind of unclear exactly what they do. But from what I’ve learned, it sounds like they help the ACOs, the accountable care organizations without enough resources on their own, with a software program to help tie together the facilities and the doctors that are functioning within the health care group and encourages them to do what’s called the annual wellness visit for these members. Because these members aren’t in Medicare Advantage Plan typically. These members are fee for service Medicare under the Medicare shared savings program. And there is a benefit to doing the annual wellness visit. And that’s what it sounds like, the main, I guess the main service, that Caravan provides along with the platform they offer.  


TEDDY DOWNEY:  And you mentioned there are a policymakers, people in government, concerned about this. Are they doing anything to try to improve the integrity of either the call center themselves or the visits or the up coding to make sure that they’re not gaming the system at all? Or what should we be looking out for in terms of government interest here? 


LISA EPSTEIN:  Well, as I said, Office of Inspector General over Health and Human Services is doing regular audits and looking at this closely. They do an audit of a specific health plan. So it might be United Medicare Advantage in Arlington, Virginia, or Humana in West Roxbury, New York. So they look at a certain plan. Their data, I guess is pretty old, 2016, 2017 codes, and look at the appropriateness of the coding. So there definitely are audits going on. There are also signals from CMS and they’re just mild signals. But there are signals that they are trying to figure out a way to kind of rein in the abuses in the system. And that can be seen in one of the experiments that CMS is running called REACH ACO. They’re definitely putting out feelers in ways to manage and adjust how the risk score affects the payments that are being given to these plans that are participating, or the providers that are participating in this experiment. But besides that, there is some noise from Congress. There’s some noise from budget watchdog groups and Medicare advocacy groups. But I don’t know. Vikas, do you have anything?  


VIKAS KUMAR:  No. I mean, I think that it. There’s been a lot of letter writing. I think the data that has been used in some reports—correct me if I’m wrong—but typically, I think what CMS has found is that the codes that are presented for that population don’t typically reflect the underlying health of the population. So given the acuity scores or the severity of  illnesses that are represented to receive the higher payments, I think CMS would expect to see more medical visits and more care. And that’s just not happening. And so I think a lot of people have been skeptical of these in-home assessments for a long time, given that they’re not performed by primary care doctors and that there seems to be a way to code capture.  


One of my favorite anecdotes is we interviewed a woman who was able to get her report back from Signify in this case. And she casually mentioned to the person performing the inhome assessment that her dog had diabetes. And her report came back and it said something along the lines like a family history of diabetes. So it’s like clearly there’s ways in which people can be made to look more sick than they actually are. And that may not be reflective of their actual medical condition.  


TEDDY DOWNEY:  Are there any analogous companies that you’ve looked into that have been on the receiving end of either policy changes or law enforcement as to questionable coding?  


VIKAS KUMAR:  I think there have been a few obviously we’ve looked at where there’s been questionable coding and risk or acuity, InnovAge being one. The more difficult issue I think for Signify is they’re not also supposed to be providing the care on the back end, right? So typically, at least our experience has been that, CMS seems more inclined to take action if care is not being provided, which was the case with InnovAge, that people’s prescriptions and needs were not being met.  


Certainly the DOJ has taken action against lots of companies for upcoding. That almost always falls under the False Claims Act. So there’s risk definitely to companies that engage in risk or gaming, if it’s egregious, that DOJ will step into a company for the False Claims Act. I mean, typically you’ll see a corporate responsibility agreement and additional oversight to ensure that those practices don’t continue. DOJ has been very active in the medical space in the last few years.  


TEDDY DOWNEY:  And so let’s move onto this merger. Because in some ways, I guess it would seem attractive if they’re running a call center and growing quickly. And CMS’s radar is more on companies that provide care rather than doing assessments, but obviously some red flags as well. What’s the logic? If you’re a CVS executive, what’s the logic of wanting to buy Signify Health, despite some of the—assuming they know about these red flags that you are pointing out? 


LISA EPSTEIN:  I’m taking a look at what CVS is saying in their press release and what Signify is saying. It seems to me that CVS expands its saying “We are going to expand into more primary care, offering more primary care.” I’m not sure what that means, but maybe providing primary care through MinuteClinics and expanding their MinuteClinics. So I think here they have access to what Signify says is a network of 10,000 clinicians. I’m not so sure I agree with that. But they have access to thousands and thousands of clinicians at a time when the labor market is pretty tough. So they have access to the clinicians, one.  


They can staff or they can try to staff established or new soon to be added MinuteClinics and provide more primary care because they have all the access to these providers and patients. They can also use this. They’re in the patient’s home. So they can refer to a MinuteClinic if they had problems with their blood pressure or not urgent problems. They could also refer to the CVS pharmacy.  


So, I mean, I guess looking at it that way. And we can see like other insurance companies are making acquisitions or moves to embed more in the primary care space. Like I think United and Walmart just announced a joint venture, which sounds to me like United is going to be more involved with the primary care of Walmart employees. Or maybe United Medicare Advantage patients can go to a Walmart clinic for primary care or for a risk assessment visit. So it does sound like this is something that the industry itself is kind of moving towards.  


TEDDY DOWNEY:  And I could see an issue here. You could kind of look at this two ways. One is CVS maybe would clean up some of these aggressive sales practices. But if you look at it another way, obviously, CVS could be taking on potential scrutiny or otherwise get attention for the type of company that Signify is here. What concerns would you have if you’re at CMS looking at this deal in terms of where the incentives line up or any problems with acquiring Signify and bringing on this type of company with this problematic culture that you’ve talked about? 


VIKAS KUMAR:  So I think one area that a lot of the clinicians spoke with us about and raised concerns about is the nature of their visits and being rushed and the schedules really prevented them from facilitating the follow-up care. So if they found something problematic with a patient, like they didn’t have the time to refer to their primary care provider. Or they felt like maybe sometimes they would refer back to Signify and then it kind of just stopped there. And I think, as I recall, there were a few examples where the clinician had performed the in-home assessment the prior year. And there was no follow-up on the issues that were identified in that visit until the time the physician came by again for the next year.  


So like this whole notion that additional care will be provided, I think if I’m CMS, I would be a little bit concerned about those representations. Or whether there is a mechanism in place to ensure that there is some benefit to the patients that have those in-home assessments. Like there is actually followon care provided or if there’s an emergency situation that someone gets help.  


TEDDY DOWNEY:  Yeah, that makes sense. In some respects, the reason that CVS is giving for wanting to do this acquisition, adding care on top of the assessment would actually put them more in the crosshairs or more in the sort of where CMS’s attention is in terms of upcoming problems. Would that be kind of fair to say if that’s what they intend to do?  


VIKAS KUMAR:  Yes, that’s what I would think. I mean, what we saw with InnovAge was basically once people figured out that care wasn’t being provided, CMS acted very quickly, as did the state regulators, to halt enrollment and actually police what was going on with those facilities. In addition to the separate issue of the False Claims Act investigations that are pending from the State AG and Department of Justice regarding upcoding. So that seems to be an area where CMS is pretty quick to act if they find any indications that patients aren’t being cared for.  


TEDDY DOWNEY:  Okay. And I’ll ask this last question before we get into the audience questions. One thing that has come up—and I know CVS has made a lot of—it’s been very careful to show that they have strong firewalls and things like that. But data and how a conglomerate, a health care conglomerate, can – I don’t know if I would say weaponize data, but use data in a way that could be potentially deemed anti-competitive. Do you see any concerns here, either from a competition standpoint or maybe just a health care standpoint that CVS could take advantage of this data in a way that would harm a competitor, I guess, is really what we’re interested in or anything else? Is there an issue with data when it comes to this merger?  


LISA EPSTEIN:  Well, Signify does have access to a lot of information about these seniors’ health status, or at least what’s recorded as their health status. With insurance companies, of course, obviously as an insurance company, they have. But that’s patientspecific. But also on the aggregate level, the data’s going to show, I’m sure, that they can run queries. Which health plans have which average diagnoses? Where is another competitor coding more than we are in certain areas? And obviously, that means they’re getting more money from CMS. So there’s a lot of data and analytics which Signify Health touts and CVS says is one of the main reasons they’re moving forward with this acquisition. 


I did want to mention though, to add onto what Vikas said about concerns with regulators. OIG and HHS is doing these audits. They are imposing millions of dollars, many millions of dollars, of recoupment when they realize that there were some questionable coding practices or unverified coding practices. And so I didn’t see anything in the merger agreement regarding a waiver or CVS not having liability, CVS not having liability for this potential. There is in Signify’s annual filings a disclosure about the potential for the CMS to go after the MA plan for recoupment, and then the MA plans to try to go after Signify for any demand for reoupment the plans get from CMS. So I think there’s a risk there, just depending on what the audit shows and if the customers of Signify want to go back to Signify for the recoupment for what MA plan is being asked by CMS to pay.  


TEDDY DOWNEY:  So here’s a question from the audience. Can the nurse practitioners conducting the in-home evaluations refer patients for additional care inside of CVS MinuteClinics or CVS health hubs? Or will patients be restricted to innetwork providers? Because ultimately these evaluations are done on behalf of payers. 


LISA EPSTEIN:  Well, that’s a great question. I mean, ultimately, the patients are—the members are restricted to the network, innetwork, of the plan. But I don’t know if there’s urgent care carve out. I don’t know if MinuteClinics are considered urgent care, But that’s a good question. I thought about it myself. I don’t know the answer.  


TEDDY DOWNEY:  Yeah, I guess would they be CVS employees? Or would they be a totally separate Signify Health entity subsidiary? You’d have to kind of figure that out. Because MinuteClinics are outside of your health care anyway, right? Like you pay out of pocket there I think.  


And then here’s another question. Also, don’t the evaluations need to be done for patients to be covered for services? Don’t these evaluations need to be done as soon as possible? How is that a bad thing?  


VIKAS KUMAR:  They are not required. It is not a required visit for service. The Medicare Advantage plan may wish that they were required, but they’re not required. To the point that members are offered, by some health plans, gift cards to allow the clinician to come in the door.  


Lisa, isn’t it actually a negative in some cases? Like didn’t some patients’ primary care doctors get mad? Didn’t we have examples of the doctors getting mad when these were conducted? 


LISA EPSTEIN:  Yes. The patients’ doctors—some patients have told us my doctor would say, why did you do this? Why did you get this done? I could have done it here in my primary care office. Or we do this here and I did it for you. And now I don’t get paid because you get one a year. And you allowed this other physician to come into the home. It absolutely is not required, if that’s the question.  


TEDDY DOWNEY:  Another issue, you said, is typically when they’re coming to the home and they’re in a rush or what have you, the quality of the assessment is not as good as it would be if you were with your primary care doctor another alternative to that. Is that a fair concern to bring up? 


VIKAS KUMAR:  Yeah, and I think we go back to this idea that the person may have been harassed or misled into accepting the visit and then you’re in the home of a person wheo doesn’t really want you there. So a lot of the clinicians we talked to gave this example of this Semler device that they put on people’s legs to determine whether or not they have peripheral artery disease (PAD). If they have someone sit on their couch for 5 minutes, touch their feet, put it on their leg, a lot of people don’t want that if they don’t want you in their house. And our sense was that they felt a lot more comfortable going to the doctor.  


And then there were other examples where people who are responsible for their parents’ care or whatever would question why this company that they had never heard of, Signify, was sending people into their homes, particularly during COVID. And there were concerns about whether or not their parents were going to contract COVID. And so I think my recollection is Signify at least early on has had a tough time because people wouldn’t recognize who Signify was. Certainly they know who their Medicare Advantage plan is and the big insurance companies. But that caused some difficulty in getting people to agree to allow Signify to come into the home.  


LISA EPSTEIN:  Vikas, to that point, Signify, I think, in a letter to employees – I think that’s where I saw this—Signify actually saying that one of the reasons the merger will help them is it’s better name recognition when they call the members to get the visits schedule.  



TEDDY DOWNEY:  And again, if you have questions for us, please email them to If you’re CVS, and let’s just assume this deal goes through, and then CMS says, hey we have some issues here, is CVS kind of like acquiring this risk in a way that—can they isolate for that risk to whatever that Signify’s  business is? Or if CMS ends up having a problem with your conduct, does that put CVS’s broader relationship with Medicare at issue? Or what’s the ability—how do they resolve problems like this? And how big of an issue would it be for CVS if they got in trouble after the acquisition went through?  


VIKAS KUMAR:  So I think—and Lisa, correct me if I’m wrong—but I think for years, there have been calls to not allow these in-home assessments to take place or to be used in calculating risk scores. So obviously, those have been called for, for years, and I don’t know if there’s been any real movement on that front. There’s been increasing attention on it.  


So you could imagine a scenario in which these in-home risk assessments aren’t allowed to occur in the future, which would really diminish the value of this acquisition. But in terms of additional risk, I mean, I guess there’s always the things we discussed earlier, if there’s care not being provided or things like that, those are the kinds of things that CMS seems to care about.  


So it could open the door depending on how well CVS integrates the company, fixes up some of the issues we’ve identified and things like that.  


TEDDY DOWNEY:  Yeah. One of the things that in terms of the value—assuming that CVS is like one of those other companies. Let’s just give them the benefit of the doubt. Assuming that they are interested in actually providing good care for people, I mean, just the way that Signify’s run their business, seems to suggest that’s actually the kind of the more expensive, harder thing to do. If you’re a private equity company, you’re trying to sell and you’re just trying to get the business to be something as palatable to a takeout as possible, they shed all of that difficult, expensive businesses and they focused on the sort of high margin, maybe questionable kind of core business or what have you, yeah, it does seem like there would be some valuation mismatch. Assuming that CVS actually, like you said, once they got under the hood and started putting their own systems in place, assuming that they’re trying to provide good care would have to probably be a lot more expensive than the way that Signify’s set up now. Any thoughts on that sort of as a way to think about it? No? 


VIKAS KUMAR:  No, I mean, I think that’s right. I think the stuff that’s costly and hard is what Signify got rid of. The stuff that is actually providing value to patients or at least sought to, as conceived, provide value to patients, not as implemented. Or they realized that implementing it in the way that it was designed was not cost effective and would require way more labor and staffing than I think that they were willing to provide.  


TEDDY DOWNEY:  Yeah, I wish I could say that I’m surprised that private equity got rid of all the businesses that were actually intended to help people.  


But we’ve got another question here. We got a couple of more questions here. In your discussions with employees, what are the value added diagnostic services above and beyond standard evaluation that’s done? How are these practitioners compensated for additional services provided? Also, who decides what additional tests or evaluation are done during the evaluation? 


LISA EPSTEIN:  Okay. So the tests I heard about were an A1C which measures someone’s blood sugar. It gives a value that indicates what the blood sugar was on average over the past three months. It could be indicative of a diabetes or uncontrolled diabetes. They gave some patients a fecal occult blood card that a patient would do on their own and then mail it to the lab. And that measures the blood in its stool, which could be indicative of a  bleeding polyp or potentially GI diseases like  gastrointestinal cancer. They do this peripheral artery disease test and that’s been ramping up. Much more so, clinicians are pretty much doing it on every visit because that brings in, I think we found, over  $3,000 a year from CMS for each member with a peripheral artery disease diagnosis.  


And it’s rare, it’s not very common, but they would do some camera pictures of a person’s retina to check for a side effect of diabetes that affects the retina and the person’s eye. And then there was the pilot program with the lung capacity test called a spirometry test to test for COPD. 


So it seems to me the decision is made from the health plan and it is a value added service that Signify Health gets extra money. The clinicians I spoke to, most get nothing extra. Some said for some tests they get $25 extra. But the vast majority said there is no extra money. Not only was it no extra compensation, but they weren’t really even afforded extra time to conduct these tests, which in some cases took quite a while to actually get the test done or to teach about the test if the patient was going to do it on their own. 


VIKAS KUMAR:  Lisa, weren’t there also companywide emails saying we need to do these tests? And weren’t people also like reprimanded for not performing certain tests? 


LISA EPSTEIN:  I think the expectation was that they would be performed and they would get—what was it? Like a quality assurance department email that would come to the clinicians questioning any codes that could have been added or asking for backup for a code that was added or asking other questions. Why didn’t you perform this? Why didn’t you do that? And they don’t get paid until all of those issues are resolved. They don’t get paid for the visit. And nurse practitioners are paid $80. But they are paid nothing if the visit is canceled for any reason, even if they show up there. Doctors are getting paid, I think, $100 a visit. And then there are quality bonuses for meeting certain quotas in certain areas where there’s high demand or there’s some demand and not enough physicians. The remote areas or very dangerous areas, they will get that quality bonus if they meet certain visit metrics.  


TEDDY DOWNEY:  And we’ve got a couple more questions here. Actually, three more. Could CVS try to push the evaluation into the health hubs? It seemed like the answer we had before was we don’t really know. I mean, it definitely seems like a gray area because like Signify wouldn’t do it because they’re getting paid by the health plans. But the incentive for CVS, I mean, will these clinicians—I don’t know, maybe. I guess it’s possible. I guess in general, they could just be like, “Hey, Signify, don’t do these evaluations, right? Or we want to do them in the health hubs.” 


LISA EPSTEIN:  The MinuteClinic, you mean? 


TEDDY DOWNEY:  Yeah, I don’t know. What is the difference between a health hub and a MinuteClinic? I don’t know. It seems like, whether by owning the business—maybe not within Signify they would be able do this, but they could certainly have a strategy where they change Signify to not do them all or additional ones or what have you. I don’t know. So I guess, two, it’s kind of we don’t know. Can CVS try to push this? We’ve got to look into that. That’s something maybe we can look into because that would be interesting. Because then you’ve got a little bit more of an obvious competitive interaction between health plans and CVS in terms of like who’s doing the evaluation and getting paid and stuff like that.  


And then third, you said these tests are not required, but that seems not to be true. The evaluations either need to be done at home or with a primary care physician in office, correct? What is the core demographic of patients that are not getting these evaluations done in a doctor’s office? 


LISA EPSTEIN:  So there’s a difference between what Medicare or CMS calls an annual wellness visit—which is recommended but not required—and the risk assessment, in-home risk assessment visit. In some cases, there’s overlap. In other cases, there isn’t. So neither are required. There’s no reason a risk assessment visit can’t be wrapped up into an annual wellness visit and done at the provider’s office. It does take a little bit more time. It would probably be more cost efficient for a physician extender, like a nurse practitioner or a physician’s assistant to do them. I don’t know any data about how many Medicare Advantage patients are getting the annual wellness visits. This is a covered benefit, whether they’re in Medicare Advantage or traditional Medicare. That’s interesting, but I don’t know. But the risk assessment visit is not required. It’s not required.  


Medicare Advantage plans want as many diagnoses on the patient’s records as possible because it increases the payments from CMS. And the rule today states, to the best of my understanding, the diagnoses have to be coded every year. So whatever it is coded this calendar year from my diagnoses, for example, the payment in 2022 is based on 2021 diagnoses. And that’s why you heard a lot of the Medicare Advantage plans upset after COVID, because there was such a drop in doctor’s visits and risk assessment visits that correlated to a drop in the codes that were harvested. And so that was in 2020 and 2021. And that meant that in 2021 and 2022, the payments from CMS were going to be a lot lower because they were based on the previous year’s harvested diagnoses.  


TEDDY DOWNEY:  Got it. So it’s kind of a way to make sure that you’re still getting all this extra money. If your plan is to keep getting paid by CMS, even when—this is a good solution for them during the pandemic because people are coming into the office like to get their test done. So they’re sort of more proactive. And did it come that like they were getting more – how many more tests than normal were they getting when Signify got involved? Did the employees talk about that? You went from getting this test that would be every year or longer when you need to get it done down to more frequent than that? Or did they ever talk about how often they were getting tested? 


LISA EPSTEIN:  It wasn’t—well, they did say—I don’t know about before Signify took over because it was many years ago that Signify took over Advantage and Censeo. But they did talk about (1) testing was increasing – obviously, more plans were requiring tests or asking for these tests and (2)they were also saying that they felt very uncomfortable in certain situations for, say a 98 year old person to have to do a test for the diagnosis that the person is not going to be treated for. A certain percentage of the population at certain ages is going to have signs of health conditions and issues, but they’re not going to be treated for it. It’s not going to increase the medical costs for this person. And the clinicians felt why should we put this person through this test or a younger person who has no signs or symptoms, no indication that this could be an issue, not a smoker, no diabetes. They exercise every day. And  they’re still being asked to do that, is contrary to their decision after a medical evaluation of the person.. So I did hear that.  


TEDDY DOWNEY:  We’ve got two more questions. We’ll get to them quickly. Can a life be covered under Medicare Advantage if they join a Medicare Advantage plan but don’t complete a risk assessment? Isn’t that how they score the patient? So I guess that sounded like initially when you join. 


LISA EPSTEIN:  Yes, they can be covered. And Medicare has—I’m not that familiar with the rules or how it works. But Medicare does, I think, look back on the previous year or the previous X amount of years. But they have a way of determining the person’s status. The thing is with traditional Medicare, the way it works is let’s say I have chronic diabetes and I have it under control. And I’ve been skating along with this for decades and I know how to manage it. I may go to my doctor for my annual visit. I may go because I’m having a minor gastric problem. And they don’t ever code this entire year of diabetes. It slipped. It got missed. It wasn’t on the doctor’s focus. It doesn’t matter in traditional Medicare. They get paid for my visit and the services they provide.  


In Medicare Advantage, it’s totally different. They’re going to get paid a capitated fee every month based on diagnoses that are gathered. But the risk assessment visit is not required. It is not a requirement for those enrolled in Medicare Advantage. It’s not a requirement to be paid by CMS. They have ways of kind of looking back at encounters for two years, three years, seeing what the patient were coded for and basing at least the first year’s payment on that. And then every year, they’ll just look back at the previous year.  


TEDDY DOWNEY:  Yeah, but obviously the plans have an incentive to kind of do an assessment so they can get the most favorable assessment possible. 




TEDDY DOWNEY:  From a monetary standpoint.  


VIKAS KUMAR:  Yeah, the other thing I’d say is there’s also like a massive incentive—and we talked about this with some of the other companies we’ve looked at—it’s code recapture. Because in theory, some of the conditions you have improve and may not be there again. So you’re always trying to find replacement codes to make the person seem sicker than they are. So you can still make that level of payment from CMS.  


TEDDY DOWNEY:  Yeah. When was the last time CMS looked at Signify? I mean, do they have that in the records, I guess OIG audits and things like that? 


LISA EPSTEIN:  Well, they didn’t look at—from what I understand, they haven’t looked at Signify. And the agreement between CVS and Signify Health indicates that they have not received any inquiries from my reading of the agreement. But the OIG did put out a report on in-home risk assessments and how that inflated the cost by many billions of dollars for CMS. They found several concerns. And one of the top vendors to MA plan, implicated was Censeo, which was one of the predecessor companies to Signify. But again, that audit was over a period, I believe, from 2016 to 2017. So it was definitely older data and I’m not sure if anyone can extrapolate information from that.  


TEDDY DOWNEY:  Well, this is a really interesting acquisition, a really interesting business. You guys have done some incredible work here. I encourage our listeners to read up as much as you can on the articles that were linked to in the invitation to the call, a series of articles dating back to November 2021. So I highly encourage everyone to read through those. Obviously, we’ll be continuing to keep a look at this and try to figure out more about this transaction and how this business would get implemented if CVS does end up acquiring it. So, Vikas and Lisa, thank you so much for doing this.  


VIKAS KUMAR:  Thank you.  


LISA EPSTEIN:  Thank you, Teddy.  


TEDDY DOWNEY:  And thanks to everyone for joining this call on a Friday afternoon. And this concludes today’s call.