CHI plans to develop its insurance capabilities with HMO

April 15, 2014

Englewood, Colo.-based Catholic Health Initiatives said on April 2 that its subsidiary Collab Health executed a stock-purchase agreement to buy Little Rock, Ark.-based QualChoice Holdings, the for-profit parent company of the second largest managed care company in the state. The Catholic, nonprofit CHI operates in 18 states, including at its St. Vincent Health System in Little Rock.

Juan Serrano, CHI's senior vice president, payer strategy and operations, said in a statement, "Making an investment in a quality health plan such as QualChoice is integral to CHI's population health strategies, which we believe will help improve the future of affordable access to health and well-being for the people of Arkansas and many other communities we serve. We regard Arkansas as a fantastic place to develop our health insurance capabilities as we strive to better serve communities here and across the nation."

The acquisition requires regulatory approval from the Arkansas Insurance Department. CHI will be the sole owner of QualChoice Holdings. Terms are not being disclosed. QualChoice Holdings was organized in 2010 and is the parent company of QCA Health Plan and QualChoice Life and Health Insurance Co. QCA Health Plan is a health-maintenance organization created in 1996, and it is licensed in all 75 Arkansas counties.

In January, Arkansas Insurance Commissioner Jay Bradford told the Arkansas Business publication that he would fast track the regulatory filings for the deal's approval, and that he expected QualChoice to sell insurance in other states because CHI is such a large company.

This deal is not CHI's first involvement in health plan ownership. In 2012, CHI acquired a majority interest in Soundpath Health, a provider-owned health care plan based in Federal Way, Wash., that offers Medicare Advantage plans and has about 16,500 members in nine Washington state counties.

St. Vincent has been in the QCA Health Plan provider network since the HMO's inception, and it has been an investor since 1999. Other investors in QualChoice include TriZetto Corp., the University of Arkansas for Medical Sciences, Tenet HealthSystem Medical, Arkansas Children's Hospital and QualChoice of Arkansas.

No immediate changes in QualChoice operations are anticipated with the change in ownership, and there will be no changes in provider network participation by any QualChoice provider investors, the companies said in their joint announcement. QualChoice offers health benefit and ancillary products on both a fully insured and self-insured basis.


Copyright © 2014 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2014 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.