Hospital-owned insurance plan to reenter Medicare

Health Partners of Philadelphia Inc., a hospital-owned health-insurance plan that manages Medicaid benefits for 166,300 people in Southeastern Pennsylvania, is applying to reenter the Medicare Advantage market.

The nonprofit also will announce Tuesday that it has changed its corporate name to Health Partners Plans to accommodate a broader array of products beyond its current offerings of Medicaid and KidzPartners - for children whose families do not qualify for Medicaid.

The move back into Medicare comes six years after Health Partners sold a Medicare business called Senior Partners. The price was not disclosed at the time of the sale in August 2007, but in later filings Health Partners said it distributed $120 million in net proceeds from the sale to its hospital owners.

That sale was driven by the fear that the federal government was going to slash payments to managed-care organizations.

"Plans across the country, we weren't the only ones, got a little nervous," William S. George, president and chief executive of Health Partners, said Monday.

Health Partners sold Senior Partners to Elder Health Inc., of Baltimore. Through a chain of acquisitions, the former Senior Health operations became part of Cigna.

But the worst fears for Medicare Advantage, a private plan that serves as a conduit for Medicare benefits, were not realized, and strategic planning for health-care changes under the Affordable Care Act led to renewed interest in Medicare, which covers people who are 65 and older.

"We're an aging population. You can't ignore the elderly," George said.

George said it was frustrating that without a Medicare unit, Health Partners would automatically lose its Medicaid members when they became eligible for Medicare.

The Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services, is expected to rule by this fall on Health Partners' application to compete for Medicare customers in the Philadelphia region.

Health Partners, which employs 600 people, hired about 25 in the last two years to prepare for reentering the Medicare market, including the establishment of a provider network to serve potential customers.

Being owned by hospitals made that easier, "but still, you had to go out and pound the pavement and literally talk to thousands of doctors, all these providers. It was an enormous effort," George said.

According to its website, Health Partners' owners are Aria Health, Einstein Medical Center, Episcopal Hospital, Hahnemann University Hospital, St. Christopher's Hospital for Children, and Temple University Hospital.