HEALTH-CARE PLAN SEEKS OPTIONS; CONSOLIDATED MEETS WITH EMPLOYER GROUPS

Missouri Consolidated Health Care Plan officials say they want answers on what health-care options members will have after MedAmerica HealthNet Inc. goes out of business.

Representatives from the insurance pool met with employer groups Tuesday at the Holiday Inn to discuss what is being done in light of MedAmerica HealthNet's anticipated bankruptcy.

Ron Meyer, executive director of Missouri Consolidated, said the meeting gave him and employers a chance to "basically discuss ideas about what could be done about the situation."

MedAmerica HealthNet, a network of some 250 physicians and six hospitals, contracted with Alliance Blue Cross Blue Shield to offer the HealthNet Blue product. Without a network of doctors and hospitals, HealthNet Blue may no longer exist.

Meyer said Missouri Consolidated's members will have coverage after MedAmerica HealthNet is defunct.

"Our members will not be in a position where, come March 1, they will not have health-care coverage," said Meyer. "I don't know what all their options will be at this point. Come March 1, we'll have a better idea what our options will be."

Alliance Blue Cross Blue Shield says it is working on alternatives for clients covered under the HealthNet Blue plan. No specific options have yet been outlined.

Jim Stutz, a member of Missouri Consolidated's board of directors and executive director of the St. Louis Business Health Care Coalition, said he hopes to have some information by Jan. 29, the next time Missouri Consolidated's board meets.

"We have pressed them for some answers in the very near future," Stutz said. "The best that we've heard so far is `very soon,' and we've pressed them for answers even sooner than that."

Stutz said Missouri Consolidated will consult its attorneys to see if it should become involved in MedAmerica HealthNet's decision to file bankruptcy.

Meyer said there might be a chance to "extend that timeframe" before MedAmerica HealthNet becomes defunct. "Time is of the essence," he said.

In a written statement, Meyer said Missouri Consolidated has no dispute with MedAmerica HealthNet:

"We want to clarify that our contract is only with Blue Cross and we do not become involved with the negotiated arrangements between our contractors and their individual providers. At no time has MedAmerica expressed to us that they had any problem with our operation," he said.

Meyer and Stutz said they expect Alliance Blue Cross Blue Shield to honor its contract for health-care coverage.

Meyer said Missouri Consolidated has four contracts in Southeast Missouri: the HealthNet Blue contract with Alliance Blue Cross Blue Shield, two with United HealthCare and one with Humana.

There is a possibility that Missouri Consolidated will try to move its HealthNet Blue clients to one of those other plans, Meyer said.

But Stutz told employers that the other options "aren't nearly as viable" as MedAmerica HealthNet.

As others have pointed out, another network may form after MedAmerica HealthNet goes out of business, Meyer said.

"If we have another network and everybody has to change doctors, I'm not sure that would be adequate," he said.

Clara Webb Kinner, a spokeswoman for Alliance Blue Cross Blue Shield, said the insurance company has already suggested Missouri Consolidated get new bids "to remove any uncertainty for their members" over pending litigation and MedAmerica HealthNet's bankruptcy.

They also need to consider their options "in case they lose the lawsuit," Kinner said.

Cape Girardeau County Clerk Rodney Miller said employers didn't learn much at Tuesday's meeting, and most are still worried about what options their employees will have for health-care coverage.

Managed care plans like HealthNet Blue depend on provider networks to provide low-cost health care to their customers. If MedAmerica HealthNet no longer exists, customers can still see the physicians formerly affiliated with the group, but they won't get the network discount.

"Obviously nobody is very excited about the out-of-network plan, because that's not what we contracted for," Miller said.

He said employers don't consider Missouri Consolidated to be "the enemy" in the situation, but they do expect their contracts to be honored.

"They're expecting the same from Blue Cross," Miller said.

MedAmerica HealthNet has filed for bankruptcy, leaving Missouri Consolidated's 8,700 customers in the region -- and about 22,000 other people covered under the HealthNet Blue plan -- wondering what will happen to their health care.

Alliance Blue Cross Blue Shield and Missouri Consolidated are suing each other in a contract dispute. Alliance Blue Cross Blue Shield wants out of its contract to cover Missouri Consolidated's members, saying the insurance pool has admitted too many high-risk individuals and that it is losing millions of dollars in paying off claims. Missouri Consolidated says Alliance Blue Cross Blue Shield knew the risks and needs to stick by its contract.

Meyer said Missouri Consolidated's contract is bid based on its membership demographics -- age, race, gender and family size -- not on actuarial basis, which would include an analysis of the types and costs of claims filed.

Alliance Blue Cross Blue Shield was aware of that, he said.

But Randy Ressel, vice president of sales, said Missouri Consolidated's membership is "vastly different" from the group on which his firm bid in June 1995.

At that time, Ressel said, Missouri Consolidated was made up mostly of state employees. Since the contract was bid, there's been "an influx" of new members admitted that none of the contractors expected.

Thousands of new customers would ordinarily be good news, he said, but Alliance Blue Cross Blue Shield had no input on who was admitted to the plan or at what rates they were admitted.

Kinner also pointed out that while state statute lets Missouri Consolidated bid its contract on actuarial basis or any other appropriate means, "actuarial is specifically mentioned there," and should be included.

After the losses became apparent, Meyer said, Alliance Blue Cross Blue Shield wanted a premiums increase of 70 or 80 percent, but in negotiations that figure was cut to about 50 percent.

Stutz said Alliance Blue Cross Blue Shield didn't provide adequate data to back up its demand for premiums increases.

He said the burden was on Alliance Blue Cross Blue Shield "to provide valid data or convincing information that something extraordinary is going on and you need an exception to that contract."

Stutz said he was "not impressed with the quality" of the data provided.

Ressel said his firm based the premiums on actual costs.

Stutz said Missouri Consolidated has gotten the brunt of media attention in the dispute, but "hundreds of other employers are also being affected by this."

Missouri Consolidated makes up less than 30 percent of HealthNet Blue's clientele, he said.

MedAmerica HealthNet opted to file for bankruptcy after it was informed that it would be liable for half of the $16 million Alliance Blue Cross Blue Shield expects to lose on its HealthNet Blue clients through the end of this year.