Med-Pay enjoys rebirth, comes full circle

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As it approaches the 20-year mark in the medical insurance industry, Springfield-based Med-Pay is enjoying the healthy rebirth of its autonomy as a third-party health care benefits administrator, according to Chief Executive Officer Gordon Kinne.|ret||ret||tab|

Med-Pay began as an independently owned company in 1981, was acquired by Humana in 1995 and bought back its freedom in 1998 when Humana bowed out of the local market.|ret||ret||tab|

Kinne said he looks forward to Med-Pay's third decade, though it will not be without challenges primarily, complying with everchanging health care issues and combating the rising costs of health care delivery and coverage.|ret||ret||tab|

The transitions experienced by Med-Pay over the last 19 years both in ownership status and services provided have been predicated primarily on two fronts: meeting the health coverage challenges in the fluctuating climate of governmental health care proposals, and satisfying the coverage needs of both employers and employees during a flurry of changing plan options.|ret||ret||tab|

Med-Pay was established as a third-party administrator for employee benefit plans, primarily self-funded plans, which Kinne said were in popular demand at that time.|ret||ret||tab|

However, the viability of these self-funded plans for at least some employers became threatened around 1993 under the Clinton health care proposal, Kinne said. The proposal called for integrated health delivery systems for employers with less than 5,000 employees. |ret||ret||tab|

"With no framework in place within the proposal defining the viability for self-funded plans, Med-Pay began seeking out the right association that would allow for us to comply with the Clinton proposal, and yet provide local claims administration and local management for clients within our market area," Kinne said.|ret||ret||tab|

Kinne added that during that same period, local health care providers were realigning themselves through organizations aimed at the delivery of integrated health care, as well as establishing their own health care plans and developing of certain discount options.|ret||ret||tab|

In 1995, Med-Pay was purchased by Humana.|ret||ret||tab|

According to Kinne, around the time of the Humana acquisition, the Clinton proposal began to unravel, leaving open the avenue for self-funded plans. Also, the Springfield medical community was now experiencing shock because of its rapid transition from a traditional indemnity coverage environment to a heavy HMO playing field.|ret||ret||tab|

During the three-year association of Humana and Med-Pay, there were "two different cultures on how to operate" with Med-Pay retaining its ability to make day-to-day decisions on client operations, Kinne said.|ret||ret||tab|

In May of 1998, Humana, preparing to withdraw from the Springfield market, offered Med-Pay the buy-back opportunity that allowed it to return to private ownership, Kinne said. The deal was solidified in late November of that year.|ret||ret||tab|

Having come full circle, Med-Pay is back in about the same position as before the Humana variable, Kinne said as a third-party administrator of employer benefit plans providing local management and local claims administration, with self-funded plans representing the bulk of its business. [[In-content Ad]]