Health
12:18 pm
Wed October 26, 2011

Region's Pediatric Hospital Gets Out of HMO Business

KANSAS CITY, Mo. – Children's Mercy Hospital has announced it's selling its Medicaid HMO plan - Family Partner's Health - to Coventry.

Children's Mercy set up the nonprofit plan about 15 years ago, when Missouri started taking a managed care approach. The hospital said creating its own plan allowed them to oversee all aspects of pediatric patients' care, beyond the hospital's doors.

About 200,000 people living on both sides of the state line are currently enrolled in the plan. But Jo Stueve, co-chief operating officer at Children's Mercy, says changes coming under the Affordable care Act - particularly the expansion of Medicaid eligibility to adults - spurred the hospital's decision to sell the plan.

"About 130,000 in Kansas and almost 400,000 in Missouri [will get coverage], and many of those we believe will be adults. So, where now 83 percent of our enrollees are children, we think in this future model, that it will be 50 percent or less," says Stueve. "So we want to focus on what we do best, and that's to provide the highest quality health care to children."

Stueve also says the hospital doesn't want to be so involved with the commercial side of insurance, with the coming of health insurance exchanges.

The deal still faces regulatory approval, and details of the sale haven't been disclosed.

Children's Mercy says it plans to use part of the proceeds to better coordinate services for kids with Medicaid in the region, and even contract with Coventry to manage children's care. The proceeds will also go toward paying off some of the hospital's debt.

Meanwhile, current enrollees won't be affected by the sale, according to Coventry.

"Benefits and provider options are not expected to change," says Coventry CEO, Michael Murphy.

In the Kansas City area, Family Health Partners is one of two Medicaid HMO's on the Kansas side, and one of five on the Missouri side. Coventry already operates an HMO for Medicaid recipients on the Missouri side.

According to the Missouri Department of Social Services, Family Partner's Health is the only hospital-sponsored Medicaid HMO in Missouri.

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