Humana Inc., has executed a letter of agreement to transition its third-party administration (TPA) members to Buffalo, N.Y.-based Meritain Health and leave the TPA market. Kanawha Healthcare Solutions (KHS), Humana's TPA business, "has been in decline the past few years," Humana spokesman Mitch Lubitz tells FierceHealthPayer. "Following Humana's acquisition of [KHS parent KMG America] and KHS a couple of years ago, the company recognized that the TPA model did not fit with Humana's core lines of business--medical, Medicare, individual and specialty benefits."
As part of that business transition, Humana will have a gradual reduction of the approximately 70 associates dedicated to TPA, based in Lancaster. Those reductions will start in July and continue through the remainder of 2010. "No other KMG business is affected by this decision. KMG still has approximately 200 associates in Lancaster," he adds.
The decision to get out of the TPA market is "a continuation of the realignment and workforce reductions that Humana announced in mid-February," says Lubitz.
In other TPA news, Celtic Group Inc., a subsidiary of St. Louis-based Centene Corp., has struck a deal to acquire the Arkansas TPA NovaSys Health LLC, reports the St. Louis Business Journal. With the acquisition, Centene will operate in 11 states.
To learn more:
- read this Charlotte Business Journal article
- read the Humana press release on its workforce realignment
- see Humana's first-quarter 2010 financial results
- read this St. Louis Business Journal article
- look at this Centene press release