Keystone Mercy Contract with Crozer-Keystone Health System to End April 30, 2010

March 26, 2010, Philadelphia, PA - Citing losses of more than $1 million a month on its existing contract with Crozer-Keystone Health System, Keystone Mercy Health Plan announced today the two organizations are ending their relationship. As a result, Crozer-Keystone Health System will no longer be part of Keystone Mercy's network after April 30.

Keystone Mercy, the region's largest Medicaid managed care plan, has an extensive provider network in place and is already making the necessary arrangements to help ensure uninterrupted care for the affected Medicaid members through their large network of available primary care doctors, specialists and hospitals.

The company has started mailing out letters to affected members and health care providers in the Delaware County region. The letters explain the changes and assist members in finding another provider in the Keystone Mercy network. The company is also making outreach phone calls to affected members.

"We are committed to helping our affected members receive uninterrupted care," said Jay Feldstein, DO, Corporate Chief Medical Officer and Interim Regional President, Northeast, which includes Keystone Mercy Health Plan. "We have an extensive network of providers and are working to help move affected members to one of the more than 2,000 physicians, 8,000 specialists and nearly 60 hospitals in our network."

The end of the contract affects approximately 9,600 members who have a primary care practitioner (PCP) employed by Crozer-Keystone. An additional 2,200 members have a PCP who has admitting privileges solely at one or more of Crozer-Keystone's hospitals. In total, including members who have used a Crozer-Keystone Health System hospital or specialist over the past 12 months, the change affects about 26,000 members.

Keystone Mercy has more than 50,000 members in Delaware County, making it the largest Medicaid managed care plan in the county. After the Crozer-Keystone contract ends, Keystone Mercy's members will still be able to choose from more than 200 Primary Care Practitioners (PCPs) in Delaware County.

The health plan's network also includes other hospitals and federally qualified health centers in Delaware County and bordering areas, including Mercy Fitzgerald Hospital, Riddle Memorial Hospital, Lankenau Hospital and Bryn Mawr Hospital.

Keystone Mercy has had a long and productive relationship with Crozer-Keystone Health System. In fact, Keystone Mercy was the only Medical Assistance managed care plan to contract with them. However, despite months of negotiations and several extensions of the existing contract, Crozer-Keystone and Keystone Mercy have been unable to come to terms over the rate of reimbursement.

"The economic downturn has created challenges for the entire health care system," said Dr. Feldstein. "In this environment, we cannot meet the reimbursement levels required by Crozer-Keystone. If we were to continue with the monthly losses we are experiencing with Crozer-Keystone, our ability to provide quality service and care to members across the five-county area would be affected."