CHARLESTON, W.Va. — State officials watched for updates for months on a proposed merger between WVU Medicine and The Health Plan, then indicated it might be for the best that the deal was terminated last week.
The proposed merger was a West Virginia healthcare blockbuster when it was announced last spring.
The Health Plan, a managed care organization based in Wheeling, was to supply patients with insurance coverage while WVU Medicine would have provided the healthcare.
The proposal hit rough water when Charleston Area Medical Center — a WVU Medicine competitor — objected and said it would end its relationship with The Health Plan, potentially affecting hundreds of patients.
That development raised concerns about affecting the state workers insured through the Public Employees Insurance Agency.
The merger was halted last week, meaning WVU Medicine and The Health Plan would no longer become one entity.
“This is not surprising news,” state Insurance Commissioner James Dodrill wrote in a Nov. 27 email to representatives of The Health Plan.
“While unfortunate for the proposed merger, it is, as you know potentially very good news for The Health Plan’s (and PEIA’s) relationship with CAMC.”
Within a week, The Health Plan then announced that its relationship with CAMC was back on.
Insurance Commission correspondence about the proposed merger between The Health Plan and WVU Medicine was obtained through a Freedom of Information Act request by West Virginia MetroNews, which was trying to determine more about why the business deal was terminated.
The correspondence shows little in the way of alarm — mostly just ongoing questions to check on the timeline. The final few emails express some acceptance that the deal’s collapse might help with the CAMC relationship.
Dodrill’s email referenced a recent conversation with CAMC President David Ramsey, saying he had offered to help with the situation.
He extended the same offer to Jeff Knight, senior vice president for finance at The Health Plan.
“Likewise, and now that it appears there is an opportunity, if there is anything I can do to assist The Health Plan in rekindling its relationship with CAMC, all you have to do is let me know,” Dodrill wrote.
WVU Medicine and The Health Plan announced their merger May 7 as “the marriage of two great West Virginia brands.”
Paperwork for the deal had to go through the Insurance Commission, which regularly asked for updates.
The first correspondence, also on May 7, notes that the Insurance Commission learned about the deal through media reports.
The Insurance Commission asked for pre-acquisition notification, which, under state law could include an economist’s opinion about the competitive impact of the acquisition.
Those conversations went on through the spring and summer in calls and emails.
By early July, correspondence indicated the required filings were ready to be reviewed by all parties.
But by late August, the Insurance Commission was still checking on progress.
“We still don’t have it, and we do not have a timeline from them at this point,” Joylynn Fix, director for rates and forms at the Insurance Commission wrote on August 22.
A little more than a week later, responding to another email query, Fix reported the situation had not changed.
“We still have nothing filed,” Fix wrote.
On Sept. 20, the status had not changed.
“We still have not heard a word from them,” Fix wrote.
By Sept. 24, another issue arose.
That question came from Erin Hunter, general counsel for the Insurance Commissioner. She noted that during a call with The Health Plan, there was discussion of 26 questions from the Attorney General’s Office “primarily looking at anti-trust concerns.”
Hunter wanted to know more.
“It may be confidential, but as the primary regulator of the insurance industry in the state we would like to reach out to the AG’s office to see whether there is any non-confidential information they could share with us,” Hunter wrote.
Any followup on that question wasn’t referenced in the remaining correspondence.
By Sept. 30, the concerns from CAMC, a major healthcare competitor with WVU Medicine, were becoming public.
“CAMC sees that as an aggressive play on WVU’s part,” Jim Pennington, president of The Health Plan, said in an interview with MetroNews.
“In our meeting they called them ‘the northern aggressor’ several times.”
Just before Thanksgiving, it started becoming clear to state officials that the deal was off.
On Nov. 25,, Tonya Childress Gillespie, an assistant commissioner at the state agency, asked for another update.
“Did your board approve the notice?” she asked Knight of The Health Plan. “If so, is it being released this week?”
The Health Plan’s board was set to meet Nov. 25, Knight responded.
“I believe they’ll be voting on the next steps for WVU and CAMC,” Knight wrote back. “Once those decisions are made, everything else will be much clearer.”
Two days later, Knight followed up, referencing an end to the deal for the first time.
“I’ll be sending a notification to the Commissioner this morning (WVU termination),” he wrote
The termination letter that was sent Nov. 27 was one paragraph from John Wright, chairman of The Health Plan’s board of directors:
The purpose of this letter is to notify the Department that the above-referenced Term Sheet (and the transaction contemplated by the Term Sheet) has been terminated. If you or anyone else with the Department desires additional information, please let me know.
That’s when Insurance Commissioner Doddrill wrote back to express his support, hoping the relationship with CAMC could be patched up.
Knight of The Health Plan wrote back to say he appreciated the sentiment.
“We continue to have conversations with CAMC and I’ve been instructed by our Board to share this notification letter with them,” Knight wrote.
“This is the first step in repairing that relationship and we want them to be a strong partner in the future.”
On Dec. 3, when MetroNews asked whether the deal was off, WVU Medicine responded with a statement that the two health care companies believe coming together is critical.
That statement suggested the original deal was being re-evaluated but did not explicitly say it was off.
“To that end, they both remain committed to building an integrated healthcare finance and delivery network, one that will allow for the better coordination of care and management of the population’s health,” WVU Medicine stated.
“As they continue to work towards that goal, they have agreed to move away from the original transaction, and are going back to the drawing board to make sure the partnership is the ultimate win-win and that each is optimally positioned to enter this new model of providing healthcare in West Virginia.”
A day later, Dec. 4, The Health Plan provided its own statement publicly acknowledging the original deal was off.
But the statement left open the possibility of continuing to work together without actually merging.
“While this effective transaction is no longer moving forward, The Health Plan remains to building a statewide integrated healthcare finance and delivery network that will include all major health systems,” The Health Plan stated.
“In addition, this announcement does not change or affect coverage for anyone insured by The Health Plan who receives services from West Virginia University Health System facilities.”
One more day later, Dec. 5, The Health Plan sent out a statement renewing its longstanding relationship with CAMC.
“The Health Plan is thrilled about this renewed partnership with CAMC and excited for a collaborative future – bringing the best care to patients,” The Health Plan wrote.