CLEVELAND -- WellPoint, Inc. (NYSE: WLP) today announced that it has entered into an agreement in principle to acquire the Medicaid plan from QualChoice Health Plan, Inc. (QualChoice), an Ohio-based managed care organization. QualChoice has built a strong reputation for delivering superior customer service while offering an extensive physician and hospital network for its members.
Pending Ohio Department of Insurance approval, QualChoice will also endorse Anthem Blue Cross and Blue Shield as the insurer of choice for business customers of QualChoice’s commercial insurance plans and individual policies. QualChoice will continue to serve these members through the end of 2006 - at which time QualChoice expects to cease providing insurance coverage.
"The agreement brings together two organizations that have three things in common: a strong commitment to both Cleveland and the State of Ohio, reputations for superior customer service and dedication to quality health care," said Larry C. Glasscock, chairman, president and chief executive officer of WellPoint, Inc. WellPoint is the parent company of Anthem Blue Cross and Blue Shield in Ohio.
The transaction will strengthen WellPoint’s Medicaid managed care position in Ohio’s Northeast Region, in which both WellPoint’s Anthem Blue Cross Blue Shield Partnership Plan and QualChoice recently were selected to participate in the readiness review process to obtain a contract with the State of Ohio to provide health care benefits to recipients of the state’s Covered Family and Children’s (CFC) program.
"This was a strategic decision rooted in our desire to focus on our core mission: To Heal, To Teach and To Discover," said Thomas F. Zenty III, president and chief executive officer of University Hospitals Health System, which owns QualChoice. "As we identified our options for the sale of QualChoice, we sought an insurer who would provide our customers with high-quality health care coverage and who had a national presence and clear staying power. We also sought an agreement that would include employment opportunities for QualChoice employees. The agreement with WellPoint meets both objectives."
"For more than 65 years, Anthem Blue Cross and Blue Shield has served Ohioans, and we are committed to ensuring a smooth transition for the QualChoice members," said Chuck Slater, president, Anthem Blue Cross and Blue Shield in Ohio. "As an Ohio-based plan that understands the state’s health care needs, we look forward to expanding our commitment to improving health while continuing to collaborate with physicians and hospitals to improve the quality and safety of health care for all Ohioans."
The Medicaid acquisition is expected to close in the third quarter of 2006, subject to standard closing conditions and state regulatory approval. QualChoice currently serves approximately 68,000 Medicaid members. The transaction will not have a material impact on WellPoint’s current earnings per share guidance for 2006.
QualChoice and WellPoint will be sending materials to customers explaining the changes. In the meantime, commercial plan customers with questions should call 800-260-2643. Medicare customers should call 800-206-7279; and Medicaid customers, 800-492-9225.
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Contacts:
Investor Relations
Wayne DeVeydt, Investor Relations, WellPoint, Inc., 317-488-6880 Wayne.Deveydt@wellpoint.com
Media
Loree Vick, University Hospitals Health System, 216-844-3825 Loree.Vick@uhhs.com
Chip Palazzo, Anthem Blue Cross and Blue Shield, 216-643-0101 Chip.Palazzo@anthem.com
James Kappel, Media Relations, WellPoint, Inc., 317-488-6400 James.Kappel@wellpoint.com
About WellPoint, Inc.
WellPoint’s mission is to improve the lives of the people it serves and the health of its communities. WellPoint, Inc. is the largest health benefits company in terms of commercial membership in the United States. Through its nationwide networks, the company delivers a number of leading health benefit solutions through a broad portfolio of integrated health care plans and related services, along with a wide range of specialty products such as life and disability insurance benefits, pharmacy benefit management, dental, vision, behavioral health benefit services, as well as long term care insurance and flexible spending accounts. Headquartered in Indianapolis, Indiana, WellPoint is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as Blue Cross Blue Shield in 10 New York City metropolitan and surrounding counties and as Blue Cross or Blue Cross Blue Shield in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through UniCare. Additional information about WellPoint is available at www.wellpoint.com.
About QualChoice
QualChoice offers members access to a network of more than 4,700 primary care and specialist physicians and more than 30 hospitals. At the heart of the network is University Hospitals Health System, serving individual health insurance clients at some 1,000 locations in more than 45 communities in Northeast Ohio.
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information about WellPoint, Inc. ("WellPoint") that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of WellPoint, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the U.S. Securities and Exchange Commission ("SEC") made by WellPoint and WellChoice, Inc. ("WellChoice"); trends in health care costs and utilization rates; our ability to secure sufficient premium rate increases; competitor pricing below market trends of increasing costs; increased government regulation of health benefits and managed care; significant acquisitions or divestitures by major competitors; introduction and utilization of new prescription drugs and technology; a downgrade in our financial strength ratings; litigation and investigations targeted at health benefits companies and our ability to resolve litigation and investigations within estimates; our ability to contract with providers consistent with past practice; other potential uses of cash in the future that present attractive alternatives to share repurchases; our ability to achieve expected synergies and operating efficiencies in the WellPoint Health Networks Inc. and WellChoice mergers within the expected time-frames or at all and to successfully integrate our operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transactions may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transactions; our ability to meet expectations regarding repurchases of shares of our common stock; our ability to meet expectations regarding the accounting and tax treatments of the transactions and the value of transaction consideration; future bio-terrorist activity or other potential public health epidemics; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. WellPoint does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in WellPoint’s and WellChoice’s various SEC reports, including but not limited to WellPoint’s Annual Report on Form 10-K for the year ended December 31, 2005.