ARC Inks Deal with MetraHealth
January 12, 1996
Austin Regional Clinic’s recent contract with MetraHealth has fulfilled its larger plan to serve a broader employee and patient base. Effective Feb. 1, ARC’s 112-member physician group and 14 clinics will become part of the MetraHealth network, the third largest managed health care insurer in Austin.
“In the wake of signing the contract with MetraHealth, ARC actively is discussing contracts with other health insurance companies in Austin, including New York Life/Sanus", says ARC President and CEO Dr. Norman Chenven. While Chenven says it’s too early to give specifics, he is optimistic about a possible alliance.
“‘We are in very active discussions with Sanus right now," he says. "But nothing has been agreed upon and nothing has been signed and nothing is formal at this point."
Signing with MetraHealth is part of ARC’s strategy to become available to a larger employer base. In September 1995, ARC announced it would begin looking to contract with other health insurance companies after its exclusive relationship with PruCare of Austin ended in November.
"It reinforces our confidence in our original plan, which was to become available to a much broader range of employers and patients by joining a number of health plans, rather than being restricted to one," Chenven says. "It gives us confidence that we made the right decision in the end by becoming non-exclusive."
ARC maintains an unbinding contract with Austin’s largest managed health care insurer. PCA Health Plans of Texas, while it looks for new partners.
"We are in negotiations with some other carriers for the future," Chenven says. "There are a whole host of new health plans in the community. We are talking with those one by one."
By signing with MetraHealth, ARC now has contracts with two of the Austin area’s top three managed health care insurers. MetraHealth’s 60,000 local members now have access to ARC’s doctors and clinics.
"We will now be in the two health plans that we can be that are large," Chenven says. "We’ve basically re-established our availability throughout the community."
New York Life/Sanus claims about 7,000 covered lives locally under its HMO plans. Mario DeBlasi, marketing director for Sanus, says ‘meaningful discussions continue’ between Sanus and ARC.
"We’re committed to managed care in the marketplace and they are a progressive primary group in the Austin area," DiBlasi says.
MetraHealth will increase its primary care physician base 30 percent as a result of joining with ARC, says Ken Burdick, CEO of MetraHealth.
"That’s a pretty big deal," Burdick says. "We were impressed by the internal controls that they [ARC] have in place to ensure both high-quality and cost-effective patient care." MetraHealth also stands to benefit from ARC’s name, Burdick says.
"We think that Austin Regional Clinic name recognition is also quite valuable," he says. "We certainly expect that it will improve our marketability to employers, because we are one of only two managed care organizations that Austin Regional Clinic has signed with."
ARC’s alliance with MetraHealth follows its history of stormy relations with PruCare, with which ARC contracted prior to PCA. When ARC doctors exercised a clause in their contract with PruCare to end the exclusivity, PruCare took the group to court. During the transition period, ARC doctors continued to treat PruCare customers. PruCare now contracts with Travis Physician Associates.
"ARC’s subsequent talks with other health plans have proven more positive." Chenven says.
"We have had excellent relations with PCA in terms of working together to provide the health coverage, and our discussions with MetraHealth have also been very positive," he says. "That also reinforces our belief that there can be a strong, positive healthy relationship between health care providers and the health plans.”
From the January, 12-18, 1996, Austin Business Journal.