In a black eye for provider-owned managed-care plans, California's UniHealth integrated delivery system hopes to sell its majority stake in an ailing start-up, CareAmerica Michigan.
Louisville, Ky.-based Humana would become the new capital partner under a plan filed with Michigan regulators April 30. However, Humana stressed last week that it hasn't agreed to a deal.
The Southfield, Mich.-based HMO started as a joint venture between CareAmerica Health Plans, a subsidiary of Burbank, Calif.-based UniHealth, and the Michigan Provider Network, a group of 2,500 Southeast Michigan physicians.
It was the first project launched under the American Medical Association's Physician Capital Source program, started in 1995 to help physicians develop managed-care ventures. The program since has been discontinued, and the AMA had no comment last week on the shake-up of CareAmerica Michigan.
CareAmerica Michigan began marketing in three counties last summer and reported just 23 members as of Dec. 31, 1997. According to the Michigan Insurance Bureau, the plan reported a net loss of $3.5 million on revenues of $180,996 in 1997.
UniHealth owns 85% of the venture, but the Michigan Provider Network controls half the plan's board of directors.
In July 1997, UniHealth sold its CareAmerica Health Plans operations in California with 265,000 enrollees to San Francisco-based Blue Shield of California for $175 million (Aug. 4, 1997, p. 18).
According to Humana spokesman Greg Donaldson, CareAmerica Michigan has been in negotiations with MedStep, a Humana subsidiary that specializes in Medicare risk-sharing.
Michigan Insurance Commissioner E.L. Cox must approve the terms of any change in ownership.
If a deal is completed, Humana would become the second national managed-care company to gain an HMO license in Michigan. Aetna U.S. Healthcare began marketing an HMO this year.