HHC is ending contracts with select health insurance plans in an effort to align reimbursements models with its proactive agenda to prevent illness and strengthen the public hospitals' financial stability, while ensuring a seamless transition to patients involved in the change.

"We're committed to having effective relationships with health insurance partners who support strong clinical healthcare models, while keeping administrative expenses low," said Marlene Zurack, HHC Chief Financial Officer. "We also want to protect patients and help them make informed choices when selecting their medical home."

The public hospitals will focus on building "risk" models with fewer insurance plans that can cover a minimum of 25,000 HHC patients and pay a standard fee for each member, regardless of medical conditions and needs of patients. Unlike "fee for service" models that provide higher reimbursement for specialized care, these "risk" arrangements create a built-in incentive for HHC to keep investing in its wide array of preventive care services that help keep patients healthy and out of the hospital.

To educate staff who will be assisting the nearly 55,000 patients who will be affected during this transition, HHC has established the Medical Home Project, a training program for staff which covers the rights and responsibilities of managed care patients when their plan or provider has changed. Patients whose health plan no longer covers HHC services will have a choice to select a new primary care provider or continue seeing HHC doctors by selecting a plan used by the public hospital where they receive their care. The contract terminations will take effect in February of 2008.

By reducing the number of health insurers on contract, HHC is able to limit the administrative costs of submitting claims to many different companies which have varying requirements. Financial analysts agree that the 25,000 threshold lowers the risk to HHC by allowing a balanced case mix of healthy patients and those who may have more medically complex needs.

The Community Service Society of New York City (CSS), HHC's partner in the development of the Medical Home Project, is a 160-year-old community organization funded by the NYC Health Department. CSS runs the Managed Care Consumer Assistance Program (MCCAP), which offer a wide range of multilingual patient health education activities in all five boroughs.

September 2007