Coventry to buy Kansas health plan

The acquisition will give the insurer more than 1 million members across the Midwest.

By Emily Berry — Posted Oct. 22, 2009

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Coventry Health Care plans to buy a hospital-owned health plan that will add 120,000 members to its rolls.

The acquisition, Preferred Health Systems, is a subsidiary of Via Christi Health System, a Wichita, Kan.-based network of hospitals and nursing homes.

Doctors in Wichita are sorry to see a locally owned health plan disappear, but they are trying to withhold judgment about Coventry until they see the company in action, said Joe Davison, MD, a Wichita family physician and president of the Kansas Medical Society. Dr. Davison also is the past president of the Medical Society of Sedgwick County and was speaking on behalf of the county society.

"We are not going to start off this new relationship with bad blood," he said.

Dr. Davison said physicians in Kansas are historically wary of national health plans. He cited the role the state medical society played in fighting to stop BlueCross BlueShield of Kansas' proposed conversion to a for-profit plan so it could be acquired by Anthem. The state blocked the conversion in 2001, and the sale never took place.

"I think this insurance maneuvering has raised the ghost of that for some," he said.

Pending regulatory approval, Bethesda, Md.-based Coventry expects the deal to be complete in three to four months. The purchase price was not disclosed.

According to the most recent American Medical Association survey of health insurance market share, Coventry had the second-largest share of the market for HMO and PPO plans in Kansas, with 19%, behind Premier Health, an HMO subsidiary of BlueCross BlueShield of Kansas, which held about 37% of the market.

According to a Coventry news release, the acquisition would give the company more than 1 million members across six states in the Midwest. The plan had 5.2 million members across all health plans, as of its June 30 quarterly earnings filing with the Securities and Exchange Commission.

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