Coventry buys regional health plan

The deal to take over a Missouri-based insurer is Coventry's second recent purchase of a plan owned by a Catholic health system.

By Emily Berry — Posted July 20, 2010

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Coventry Health Care announced in June it had agreed to buy Mercy Health Plans, a health insurer based in suburban St. Louis. The deal will add about 180,000 members in Missouri and Arkansas to Coventry's rolls.

As part of the deal, Coventry also reached a "long-term provider and customer relationship" with the health plan's parent, Sisters of Mercy Health System.

"After giving thoughtful consideration to our future strategies as a health care organization, Mercy's board and leadership have determined that our core mission is best served by focusing on providing health care services to our communities," Lynn Britton, Mercy Health System president and CEO, said in a June 30 statement. "Likewise, MHP's progress as a health insurance company will be strengthened by being aligned with an organization focused solely on serving the needs of health plan members."

The financial terms were not released, but the deal is the latest in a series of growth spurts for Coventry. The Mercy Health Plan purchase comes less than a year after Coventry's purchase of Preferred Health Systems, another small, Midwestern insurance plan owned by a Catholic health system. That deal gave Coventry about 120,000 members in Kansas.

Coventry also was recently awarded the contract to administer Medicaid benefits in Nebraska, beginning in August.

Coventry, based in Bethesda, Md., had about 4.8 million members across all lines of business at the end of the first quarter of 2010.

Mercy Health Plans held about 58% of the HMO market share and 19% of the overall health insurance market in the Springfield, Mo., metropolitan area in the AMA's most recent report on market competition. That report is based on the most recent information available, from January 2007, and data is gathered by HealthLeaders-InterStudy. In its other markets, Mercy is not a dominant plan.

According to the same report, Coventry held about a third of the HMO market share across Missouri.

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