Humana Inc. to acquire OSF HealthPlans
ROCKFORD, Il (The Catholic Observer) - Last month, Humana Inc. announced its intention to purchase OSF HealthPlans, a licensed managed care company with about 78,000 members, for $90.5 million.
OSF HealthPlans was established in 1995. It became profitable in the last three to four years, attracting the attention of major health insurance carriers, said Farrell in an interview with the Catholic Post, newspaper of the Peoria Diocese.
In looking at the overall health care insurance industry and the future impact of the movement of major, national insurance providers into the areas served by OSF HealthPlans, the OSF organization realized that “there’s a small window in terms of how long that profitability (would) last,” Farrell says. Selling the managed care company at this time “seemed like the best opportunity for us (and) enables OSF HealthCare to focus on its core mission of providing … medical services.”
The sale comes after some months of negotiations. “Because Humana is a publicly traded corporation, contractual and legal obligations” prevented OSF Healthcare from communicating those negotiations earlier, Farrell said in a memo.
Healthcare providers that are part of the OSF HealthPlans network will be automatically included in the Humana network for the remainder of the contract year once the sale is finalized, says Farrell who adds that, with few exceptions, provider networks typically establish contracts for one year at a time.
OSF HealthPlans is a subsidiary of OSF Saint Francis, Inc., which comprises several healthcare-related businesses that are not part of this sale, including two pharmacies, a division that works with maintenance of hospital equipment, Lifeline Ambulance, a mobile medical systems branch that provides PET and MRI services and several other divisions that provide management or consulting services.
OSF Saint Francis, Inc. is part of OSF HealthCare, which is owned and operated by The Sisters of the Third Order of St. Francis. The OSF Healthcare System operates in both Illinois and Michigan and also includes seven acute care facilities (including OSF St. Anthony Medical Center in Rockford), one long-term care facility and two colleges of nursing (including St. Anthony College of Nursing in Rockford).
Humana, one of the nation’s largest publicly traded health and supplemental benefits companies, has about 11.5 million medical customers, including employer groups, government programs and individuals. With the purchase, Humana anticipates increasing its fully insured commercial membership by about 34,000, its self-insured business by about 30,000 and its Medicare membership by nearly 14,000, expanding its provider network to the 31 Illinois counties currently served by OSF HealthPlans. Humana’s presence in Illinois to date has been mostly in the Chicago area.
According to Farrell, the sales transaction is subject to regulatory approvals from the Illinois Division of Insurance and the Centers for Medicare and Medicaid Services, which typically takes 45-90 days.
© 2014 - Distributed by THE NEWS CONSORTIUM
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