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Sale of Local Medicaid HMO Final

Children’s Mercy Hospital is officially out of the Medicaid HMO business.  The hospital has finalized the sale of its non-profit plan after more than a decade of operation.

Children’s Mercy announced the sale of its Medicaid HMO, Family Health Partners, to Coventry in the fall, but the deal has since met regulatory approval.

Bob Finuf, vice president of Children’s Mercy and former director of Family Health Partners, says the plan’s 200,000 enrollees living in Kansas and Missouri won’t see any major differences from the sale.

“They’re going to get an ID card that has a little different look to it, but in terms of the service deliverables, access to care, providers with whom they receive service – no, none of that changes,” says Finuf.

The financial terms of the deal have not been disclosed, but Finuf says Children’s will use a large part of the proceeds to better coordinate services for kids with Medicaid in the region and contract with Coventry to care for them.

“We’re going to use this as an opportunity to engage the community pediatrician and family practitioner in a way that we haven’t been able to do with a health plan in the past, and look at really changing the care delivery model to a community based model [instead of a fee-for-service model].”  

Children’s Mercy set up the Medicaid HMO with Truman Medical Center about 15 years ago, when Missouri started taking a managed care approach.

Finuf says a major reason for the sale had to do with growing concerns that the upcoming expansion of Medicaid to more adults, under the federal health law, could greatly change the plan’s focus and structure.

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