As part of its continuing effort to shed operations outside of its core New York metropolitan market, financially strapped Oxford Health Plans has signed a definitive agreement to sell its Pennsylvania HMO operations for $10.4 million.
Officials expect the sale of the 72,000-enrollee health plans to healthcare information specialist Health Risk Management to close by year-end. The deal is subject to regulatory approval.
Oxford's Pennsylvania HMO has 65,000 Medicaid enrollees and 7,000 commercial enrollees.
Minneapolis-based HRM-best known for its information and management software-assumed prepaid medical risk for the Pennsylvania unit's Medicaid enrollees in April.
The acquisition of Oxford's Pennsylvania HMO subsidiary would be its first purchase of a managed-care operating unit.
After the sale, Norwalk, Conn.-based Oxford will continue to cover about 8,400 preferred-provider-plan enrollees in Pennsylvania through its separate Oxford Health Insurance unit, but officials expect Oxford's PPO enrollment in the state to decline over time.
Oxford, which lost $508 million in the second quarter primarily because of a huge restructuring write-off, also is shedding operations in Florida and Illinois. Within the last few weeks, it has agreed to sell its 19% stake in Tampa, Fla.-based St. Augustine Health Care, an HMO with 23,000 enrollees, and to transfer 15,000 enrollees in Illinois to the Illinois Blue Cross and Blue Shield plan.
In addition, Oxford will discontinue managed-care coverage to 10,500 HMO and PPO enrollees through its Oxford Health Plans of Florida subsidiary by April 15.