Henry Ford Health insurer's CEO Terri Kline on decision to buy a Medicaid plan

Health Alliance Plan, a subsidiary of Henry Ford Health System in Detroit, signed a definitive agreement to acquire Detroit-based Medicaid plan Trusted HP-Michigan June 10.

The move marks HAP's reentrance into Michigan's Medicaid health maintenance organization business in Wayne, Macomb and Oakland counties, where some of the state's most vulnerable people live.

Terri Kline, president and CEO of HAP and executive vice president of Henry Ford Health, spoke with Becker's Hospital Review about the pending transaction — set to be finalized in late summer — and how it fits into the health plan's operations.

Editor's note: Responses have been lightly edited for clarity and length.

Question: How does this transaction play into HAP's overall strategy?

Terri Kline: HAP has a mission to help members in the state of Michigan lead healthier lives. We currently serve a Medicaid population only in region six [Genesee, Huron, Lapeer, Sanilac, Shiawassee, St. Clair and Tuscola counties]. Region 10 [Wayne, Oakland and Macomb counties] is where our home base is, so for us to be able to get back into the managed Medicaid business in region 10 is really important to us. It helps us serve a vulnerable part of the population. In Wayne County alone, 39 percent of the population is covered under Medicaid, so it's a very significant part of the population.

Q: Will HAP have to set up any additional infrastructure to take on Trusted HP's 9,000 members?

TK: We don't anticipate adding additional infrastructure. We currently have a Medicaid plan, we're buying the assets of another Medicaid plan, and we have the capacity to serve it. So I don't believe we'll have to add infrastructure, but we may have to add people as we grow.

Q: Trusted HP-Michigan members will be able to keep their physicians and current ID cards. Can you talk more about this and if there will be any coverage changes down the road?

TK: We have announced that we signed an agreement to purchase Trusted and that we have filed a regulatory filing that we need to get approval on to close the transaction. We don't anticipate closing the transaction for some period of time. The state typically takes somewhere around 90 days to complete the filing. During that time, Trusted still owns the plan; we don't own it. So Trusted members can continue to use their own ID cards and see their own providers. Our expectation is that we'll run Trusted as a separate company until the end of the year, even after we acquire it. At the end of the year, we anticipate, pending regulatory approval, to merge Trusted with HAP's Midwest Medicaid plan. At that point in time, members will get new ID cards, but they'll still be able to use their same doctors.

Q: Will there be any new collaboration between Henry Ford providers and Trusted HP-Michigan members?

TK: When Trusted members become HAP members, there will be. I would assume that there would be more collaboration once we merge the two companies.

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