Pennock Priority Reach Agreement

January 29, 2003
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HASTINGS — Priority Health and Pennock Health Services have agreed to terms on a new three-year participating agreement, avoiding a disruption in the care network for subscribers of the managed-care company’s HMO who live in the Hastings area.

Neither side would disclose terms of the agreement, which was reached this morning after months of negotiations and just days before Pennock was to drop out of the Priority Health network. That would have forced Priority Health subscribers who use Pennock to seek care at other hospitals or face paying substantial out-of-pocket costs.

“Without a doubt, this has been a challenging time for all involved,” said Pennock CEO Daniel Hamilton. “This partnership meets our objective of continuing to provide the high quality health care that our community has come to expect from Pennock Hospital.”

Priority Health, one of the largest managed-care companies in Michigan, has about 6,000 subscribers in Pennock’s home market of Barry County and about 400,000 in a 27-county region.

Pennock, bidding for increased reimbursement payments, informed Priority Health in late October that it wanted to rework an existing 10-year-old participating agreement.

The hospital found the new terms offered by Priority Health unacceptable and gave notice late last year of its intention to drop Priority Health’s HMO product as of Feb. 1. Other existing participating agreements with Priority Health’s preferred-provider organization (PPO) or point-of-service (POS) health plans were unaffected.

During the dispute, Pennock actively directed local businesses that are Priority Health subscribers to competing HMOs. Priority Health, in turn, prepared to direct Hastings area subscribers to other hospitals for care.

“This is welcomed news for the Priority Health members who want to access care at Pennock Hospital,” Priority Health President and CEO Kimberly Horn said. “Pennock Hospital has been an important part of our network for over a decade and we’re pleased they will continue to be in the future. This is also good news for businesses that partner with us to provide coverage to their employees. This agreement is consistent with our mission to provide families access to excellent and affordable health care.”           

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