For more information, contact:
Barb Meyer, 314-628-3633
St. Louis (June 30, 2010) - Coventry Health Care, Inc., (Coventry) has signed a definitive agreement with the Sisters of Mercy Health System (Mercy) to acquire ownership of Mercy Health Plans (MHP), a health insurance subsidiary with approximately 180,000 enrolled members in Missouri and Arkansas. The sale of MHP to Coventry is expected to be completed within the next 90 to 120 days, pending regulatory approvals.
MHP was established by Mercy in 1994 and has operations in several of the markets served by Mercy, with a strong presence in St. Louis and southwest Missouri.
"After giving thoughtful consideration to our future strategies as a healthcare organization, Mercy's board and leadership have determined that our core mission is best served by focusing on providing healthcare services to our communities," said Lynn Britton, Mercy president and CEO. "Likewise, MHP's progress as a health insurance company will be strengthened by being aligned with an organization focused solely on serving the needs of health plan members."
"I am pleased to announce this transaction which strengthens Coventry's presence in the Missouri market while also expanding our relationship with a premier multi-state health system, Sisters of Mercy Health System," said Allen F. Wise, chief executive officer of Coventry. "This acquisition reaffirms Coventry's commitment to broadening its health plan footprint and is consistent with our focus on our seven core businesses. Mercy Health Plans' businesses are ones that we understand well and we are confident that they will increase shareholder value over the long term."
The majority of MHP's approximately 420 co-workers will become employees of Coventry as part of the transaction. Coventry operates as Group Health Plan (GHP) for commercial and Medicare products and HCUSA for Medicaid products in the St. Louis area and as Coventry Health Care in other markets served by Mercy. Upon completion of the transaction, Coventry will serve more than 1.2 million members in a six-state Midwest region.
Health plan coverage for individuals and companies who are MHP members will not change through the duration of their current contract periods as a result of this transaction. Seniors covered by MHP's Medicare Advantage plans will continue to be covered under these plans.
Financial terms were not disclosed.