Lutheran to sell Health Plus to Amerigroup

October 27, 2011 Denise Romano
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In what may prove to be a dramatic reshaping of health caredelivery in southwestern Brooklyn, Lutheran Medical Center ispoised to sell Health Plus to a national Medicaid managed careplan.

The hospital signed an agreement this week with Amerigroup – whichalready has a local New York plan — that it says will improvehealth care to low-income families in Sunset Park and thesurrounding area.

According to the contract, Amerigroup – which now serves 109,000New Yorkers — will purchase all of the operating assets andcontract rights of Health Plus, which was formed by Lutheran in1984 and now serves more than 320,000 people in New York State’sMedicaid, Family Health Plus and Child Health Plus programs, aswell as the federal Medicare program.

According to LMC, this agreement is a win for all parties becausethe merger will not only combine the financial strength andstability of the two organizations, but also increase cash flow atLutheran so it can invest in other programs and systems to improvehealth care further. The purchase price is $85 million and the deal- which requires regulatory approval — is expected to be finalizedin the first three months of 2012.

For a community safety net hospital like Lutheran, the acquisitionis particularly critical since it will mean an infusion of dollarsthat will establish an endowment — something that Lutheran hasnever had before, said Wendy Goldstein, chief executive ofLutheran, in a statement. It will strengthen our financialviability allowing us to reinvest in patient care for ourtraditional Medicaid and uninsured populations.

Dr. Dale Alexander of Sunset Park said that the merger will helpmany of the uninsured in the community. If they have more cashflow and can give it to the community that’s great, he told theHome Reporter. There isn’t much money in health care and if theycan provide more funds, it’s great for the community. Anything tobenefit the community itself is a great thing. Hopefully, thosethat are uninsured in the area will be able to use the services atLutheran.

According to joint letter from LMC, Health Plus and Amerigroup,Health Plus members will continue to receive benefits and access tothe same hospitals and doctors in the short term.

Although it is not clear what will happen once the merger iscomplete, Goldstein, Amerigroup New York CEO Bob Wychulis andHealth Plus CEO Thomas Early say in their letter that theorganizations will engage in a comprehensive outreach programwhose goal is to minimize any disruption or confusion.

Members can call Amerigroup at 1-855-AGP-HLTH or Health Plus at1-855-287-5200 with any questions or concerns.


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