Managed Care Report

HealthPlan Services Corp. (Tampa, FL) has signed a five-year agreement with Merck-Medco Managed Care, effective Dec. 31, to provide pharmacy benefits for its for its small business and large self-insured companies. Merck-Medco manages prescription drugs for more than 51 million Americans. HealthPlan Senior Vice President Jeff Markle said the company’s objective in developing the agreement is to leverage its size, aggressively manage program costs, and create added value for its member companies and their employees. In addition, HealthPlan said it will not sign a contract with the Prudential Insurance Company of America in the near future because Prudential is continuing to evaluate its current situation in its merger agreement with Aetna U.S Healthcare, which has agreed to acquire Prudential HealthCare.

Shares of Mid Atlantic Medical Services (MAMSI; Rockville, MD) rose 7.3% one day last week to close at their highest level in more than seven months after an announcement the week before that George Jochum had resigned as chairman/CEO, reported The Washington Post. Since October, Jochum had been fighting to keep his job as head of one of the Washington area’s largest HMO companies, but he recently bowed to pressure from board members who had been trying to oust him. MAMSI’s board has appointed a committee to search for a new CEO and has appointed board member Mark Groban interim chairman. A board member told The Post last week that one of the company’s top priorities will be to develop a more respectful and compassionate posture toward healthcare professionals.

Managed Care Solutions (MCS; Phoenix) saw increased net income in 2Q99 ended Nov. 30 of 194% to $492,000, 9 cents per share, from $167,000, 4 cents per share, in 2Q98. Revenues for 2Q99 rose 28% to $20.6 million from $16.1 million in 2Q98. Chairman/CEO Michael Hernandez attributes the successful quarter to the development and implementation of two new health plans managed by MCS in Texas and New Mexico. In the past year, he said, membership in the company’s plans has increased more than 65% to roughly 130,000 members.

Humana (Louisville, KY) has filed a request for an injunction in a Broward County, FL, circuit court against Columbia/HCA Healthcare (Nashville, TN) following Columbia’s refusal to treat a number of Humana Health Plan members in some of its Florida hospitals. The injunction asks the court to require Columbia to treat Humana’s members in Columbia’s Florida hospitals through March 31, 1999, as specified in a contract between the two companies. The injunction, Humana officials said, stems from the expiration of a statewide contract between Humana and Columbia in Florida that expired Jan. 1, but allowed for a run-off period of three months, ending March 31, 1999, during which Columbia hospitals would continue to treat Humana Health Plan members. In the lawsuit, Humana states that Columbia breached its contractual agreement by initially withholding hospital care in at least 27 instances since Dec. 31. Humana promptly expedited the necessary care through alternative means, the company said.

• Foundation Health Systems’ (FHS; Los Angeles) northeast health plan subsidiary, Physicians Health Services of New York (PHS), recently signed long-term commercial and Medicare provider agreements with the Montefiore Integrated Provider Association (MIPA; Bronx, NY) and with Manhattan-based University MSO, a joint venture between NYU Hospitals Center and University Physicians Network. Under the full-risk agreements with PHS, University MSO and MIPA will be responsible for pharmacy, medical, and hospital services. NYU Hospitals Center and the physicians affiliated with University Physicians Network became part of PHS’ provider network on Jan. 1. The new agreement with MIPA formalizes and expands an existing relationship between PHS, the medical center, and its affiliated physicians. These agreements include about 1,700 physicians in PHS’ New York provider network.

• Tufts Health Plan (Waltham, MA) has announced some changes to its assisted reproductive technology network, which will now include Baystate Health Systems IVF Clinic, Boston IVF, Brigham and Women’s Hospital Center for Reproductive Medicine, Massachusetts General Hospital Vincent IVF Unit, Reproductive Science Center of Boston, and Women’s and Infant’s Reproductive Therapies Program. To become part of Tufts Health Plan’s network, these centers had to meet a list of quality standards, including demonstrating ongoing quality assurance and improvement initiatives and having a designated percentage of board-certified reproductive endocrinologists on staff and meet other staffing requirements, among others.

• Coventry Health Care (Bethesda, MD) has closed the previously announced transaction between Coventry and Blue Cross and Blue Shield of Florida’s (BCBSFL; Jacksonville, FL) HMO, Health Options, providing for BCBSFL’s acquisition of Coventry’s Principal Health Care of Florida subsidiary for $95 million in cash. The proceeds, said Coventry President/CEO Allen Wise, will allow the company to eliminate all of its bank debt and further strengthen its capital structure.

• Blue Cross and Blue Shield of Minnesota (BCBSMN; St. Paul, MN) said last week it will reinforce its focus on health plan operations by discontinuing its role as the Medicare Part A intermediary for Minnesota and redirecting its resources to areas of the company that offer greater growth potential. While the effective date has not yet been set, BCBSMN says it is likely there will be a nine-month transition.