MU has announced it will sell the assets of Missouri Care, a Medicaid HMO currently owned by the university, to a company that has managed the HMO since its creation.
Shaller Anderson, a company that specializes in Medicaid managed care out of Phoenix, has agreed to buy the assets of Missouri Care for approximately $19 million. The agreement was announced Tuesday.
Missouri Care currently provides services in 18 counties in mid-Missouri, including Boone County. Jim Robertson, Missouri Care spokesman, said that more than 28,000 people are members of Missouri Care including 7,600 Boone County residents.
Mary Jankins, spokeswoman for MU Health Care, said the university made the decision to sell assets based on market dynamics and because the university wants to focus more on clinical services to patients. She said that the proceeds from the sale will go to providing patient care, training doctors and conducting medical research.
“As an academic medical center, we (MU Health Care) have a mission of healing, teaching and research,” Jankins said. “We expect this to be a seamless transition. We have been providing health care for the members and will continue to do so.”
Jankins said that the university’s decision is an example of a larger national trend. She said that specialized large private firms have been purchasing Medicaid HMOs in order to increase their market share. She cited other market dynamics affecting the university’s decision, including program changes in Medicaid on a state level.
Missouri Care was created by MU in 1998 in response to a state decision that required all Medicaid patients to become part of an HMO, said Donna Checkett, CEO of Missouri Care. She said hospital systems such as MU Health Care provided medical services to many Medicaid patients and MU Health Care created Missouri Care in order to retain its Medicaid patients.
Typically, Medicaid recipients are low-income families. Checkett cited this as a reason for the $19 million price for the assets. She said Medicaid HMOs are not a lucrative business. HMOs require members to use only specified doctors, which helps control costs.
“In the mid-90s a number of hospitals were creating these plans,” Checkett said. “As time has passed the hospitals have returned to pri-
mary goals of taking care of patients.”
Checkett said all employees working for Missouri Care are Shaller Anderson employees. She added that all management services are also provided by Shaller Anderson.
“We literally rented the building and hired the staff,” Checkett said. “Our members and providers will not notice anything different as a result of the sale.”
Checkett said MU Health Care will continue to be the primary provider for Missouri Care, which includes 18 hospitals and about 700 physicians in the region.
She said the Department of Insurance still has to approve the sale. She added if the sale is approved, it will go into effect February of 2007.