Coventry Health Care, the Maryland-based company that recentlybought Carelink Health Plans, has announced its intention to buyPrimeOne Inc.
However, the terms of the impending purchase were not disclosed.
While West Virginia once had seven health maintenanceorganizations, the number would be four after the purchase.
The acquisition of PrimeOne's 18,000 members, primarily inSouthern West Virginia, would bring Coventry's statewide membershipto about 109,000, by far the largest in the state.
The second largest, Health Plan of the Upper Ohio Valley, covers61,000 people, mostly in the northern part of the state.
'Given the consolidation, this puts Coventry as the most dominantmanaged care company in West Virginia,' said Steven Summer,president of the West Virginia Hospital Association.
Summer and other health care experts had predicted years ago thatthe ultimate success of managed care in such a rural state woulddepend on consolidation to two or three HMOs and a commitment frompublic payers such as the Public Employees Insurance Agency.
PrimeOne, a for-profit subsidiary of The Anthem Companies, haslost a total of $21.3 million since its inception in June 1994,according to records at the state Insurance Commission. In 1998alone, PrimeOne lost $5.7 million.
As of this morning, Insurance Commissioner Hanley Clark had notreceived a filing for the PrimeOne purchase from Coventry, aspokeswoman said.
In a press release, Coventry said it had signed a definitiveagreement to acquire PrimeOne, which serves 18,000 commercialmembers with an annual premium revenue of $32 million.
Immediately after the purchase, Coventry plans to merge PrimeOnewith Carelink operations. Coventry's president and chief executiveofficer, Allen Wise, said the acquisition continues efforts to buildmarket share.
'This transaction expands our West Virginia service areastatewide and increases our size in a market where we already builtmarket share earlier this year through the acquisition of CarelinkHealth Plans,' Wise said.
The deal must be approved by the state Insurance Commission andother regulatory bodies.
It is expected to close during the first quarter of 2000.
Writer Therese S. Cox can be reached at 348-4874.
-30
