HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that over the next three years the TriState area (Conn., N.J., N.Y.) will become a battleground for Medicare Advantage membership. Private fee-for-service plans have been popular in this region, and now health plans must adjust their contracting efforts following the Congressional action against no-network private fee-for-service Medicare plans. According to the latest TriState Health Plan Analysis, plans with large networks in place should easily be able to shift existing private fee-for-service members to HMO or PPO plans, while other companies must work harder to establish networks to prepare for the new requirement.

In the six months between December 2007 and May 2008, membership in private fee-for-service products in the TriState area increased by 47 percent to nearly 59,000. The bulk of this enrollment, about 47,000 members, came from New York.

The new requirement requires private fee-for-service operators to create networks in counties where another network-based plan exists by 2011, and is expected to drive the development and expansion of PPO network products.

Companies operating in multiple states with significant private fee-for- service membership, such as Humana, anticipated the change and have been building networks across the country. In Humana's case, filing is already underway to offer local PPOs in some states. It is expected that Humana will face significant competition in Upstate New York where there are regional carriers with existing strong networks. Many regional carriers have launched new PPO and HMO products to address the anticipated regulation.

"Private fee-for-service plans have been popular in the TriState, particularly in Upstate New York where there are a number of Medicare Advantage plans competing for enrollment," said Chris Lewis, analyst with HealthLeaders-InterStudy and author of the report. "Some health plans anticipating the end of private fee-for-service plans have been working to get networks in place through HMO and PPO models. However, other private fee-for- service operators with little or no managed care presence may decide it's not worthwhile to spend additional resources to develop networks in areas where they don't already have established relationships with providers."

About Health Plan Analysis

Health Plan Analysis identifies key health plan trends, allowing healthcare businesses to create comprehensive strategic plans and sales strategies at state and local levels. Updated quarterly, Health Plan Analysis provides a detailed look at plan design and financials, as well as information about mergers, legislation and other influencers driving healthcare in a particular region.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a Decision Resources, Inc. company, is the authoritative source for managed care data, analysis and news. For more information, please visit www.HealthLeaders-InterStudy.com.

About Decision Resources, Inc.

Decision Resources, Inc. is a cohesive portfolio of companies that offers best-in-class, high-value information and insights on important sectors of the healthcare industry. Clients rely on this analysis and data to make informed decisions. Please visit Decision Resources, Inc. at www.DecisionResourcesInc.com.

All company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

  For more information, contact:    Lisa Osgood                              Elizabeth Marshall   HealthLeaders-InterStudy                 Decision Resources, Inc.   781-296-2606                             781-296-2563   losgood@hl-isy.com                       emarshall@dresources.com 

First Call Analyst:
FCMN Contact:

SOURCE: HealthLeaders-InterStudy

CONTACT: Lisa Osgood of HealthLeaders-InterStudy, +1-781-296-2606,
losgood@hl-isy.com; or Elizabeth Marshall of Decision Resources, Inc.,
+1-781-296-2563, emarshall@dresources.com

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