The struggling physician-owned SureCare Health Plans of Roseburg, Ore., is in talks to be acquired by Portland's ODS Health Plan.
The two parties have reached a preliminary agreement, and they are expected to sign a formal letter of intent later this month, said ODS spokesman Charlie LaTourette.
"We hope (these negotiations) will lead to a definitive purchase agreement," LaTourette said.
The 120-physician Douglas County (Ore.) IPA owns the 19,000-enrollee SureCare, the state's only remaining physician-owned HMO. The for-profit plan has about 11,000 Medicaid enrollees and about 8,000 commercial enrollees.
Last February, the Oregon Insurance Division, a unit of the Oregon Department of Consumer and Business Services, forced SureCare to augment its financial reserves by $1.2 million, according to insurance department officials. The plan had pre-tax losses last year of more than $1.1 million on premium revenues of $29.7 million.
ODS, which is affiliated with the Oregon Dental Association, has about 160,000 enrollees in its health plan. It has another 525,000 dental plan members.
It's not clear at this point whether a deal would include all of SureCare's enrollees or just its commercial members, LaTourette said.
Depending on the terms of a final deal, SureCare could continue as a Medicaid-only plan or be dissolved.
The doctor-owned company was started five years ago as a Medicaid-only enterprise before launching a commercial health plan in 1996. But it has struggled to retain sufficient capital reserves in recent years.
"It's kind of sad to see this go this way," SureCare Chief Executive Officer Ronald Preston told the Portland Business Journal late last month.
Preston, who also is CEO of the Douglas County IPA, could not be reached at deadline for comment.
A transfer of ownership would have to be approved by the Oregon Insurance Division.