Healthcare Business News

CHI to expand Medicare Advantage footprint to four more states

By Melanie Evans
Posted: June 19, 2014 - 7:45 am ET

Catholic Health Initiatives, one of the largest U.S. health systems, is rapidly expanding its Medicare managed-care business with plans to enter markets in four states next year.

The Englewood, Colo.-based system, which operates 93 hospitals in 18 states, will enter Medicare Advantage markets in Kentucky, Nebraska, Ohio and Tennessee after winning approval from the CMS and state insurance regulators. The push comes roughly one year after CHI spent $24 million to acquire a majority stake in a Washington Medicare managed care plan with 17,000 members.

Juan Serrano, the system's senior vice president of payer strategy and operations, said the expansion targets markets with favorable Medicare reimbursement and where the system's hospitals and doctors are better prepared to tackle disease prevention and management across large groups, a strategy described as population health.

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Serrano said the system's strategy to expand its insurance operations—which now also include the Arkansas commercial health plan QualChoice—will better position the company's providers to manage care for the chronically ill. CHI hospitals and doctors will have access to data on members and their medical care collected by the health plans, he said, which can be used to help identify new care management strategies.

CHI has hired former managed care executives to gain insurance expertise, Serrano said. Meanwhile, the health system's hospitals and doctors will be able to more quickly incorporate data from the system's plans. “Operating some of our own gives us the ability to learn quickly, to move quickly and to experiment with new, innovative solutions,” he said. “We have a little bit more latitude to try because we have the closest kind of alignment.”

Officials with the system have not been shy about their desire to compete in health insurance markets and their strategy to use Medicare Advantage as a point of entry. Michael Rowan, president and chief operating officer of CHI, described Medicare managed care as “a low-risk means of getting into the insurance business” in March.

Rowan also said the system would launch and acquire additional health plans this year.

Serrano said the system sees an opportunity in Medicare patients to manage more vulnerable and medically complex elderly, a growing number of whom have had some experience in the workplace with managed care. Medicare Advantage also allows CHI to employ more narrow networks as a managed care provider, something that is less prevalent though gaining ground in commercial markets.

The system's strategic goals include the capacity to manage health plan operations, from sales and customer service to network development and management to medical and benefit management.

Follow Melanie Evans on Twitter: @MHmevans

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