Highmark deal brings 1M new members in N.Y.
Highmark Inc. has finalized an affiliation agreement with Buffalo, New York-based HealthNow New York Inc., the parent company of BlueCross BlueShield of Western New York and BlueShield of Northeastern New York, giving the Downtown-based health insurer about one million new members and opportunity to expand its third-party benefits administration business.
The newly affiliated organization will be rebranded Highmark Blue Cross Blue Shield of Western New York and Highmark Blue Shield of Northeastern New York.
As part of the agreement, Highmark Western and Northeastern New York will commit $2 million annually for five years in support of programs, services and initiatives aimed at addressing health disparities in a 21-county service area of New York.
HealthNow Administrative Services, which is based in Blue Bell, Montgomery County, serves about 100,000 of the company’s members as an unbranded thirdparty benefits administrator, mostly in California. The thirdparty administrator, which employs about 125 people, also has an office in Sacramento in addition to Blue Bell.
HealthNow President and CEO Dave Anderson will guide the transition until the end of the year, when he is scheduled to retire.
Both entities are nonprofits, so there was no exchange of money or assets, but the deal gives Highmark a platform to grow its third-party administration business.
“Scale is extraordinarily important to the TPA business,” Mr. Anderson said. “This is a massive increase in scale, which creates new opportunities for leveraging that asset.”
Blue Shield of California contracts with HealthNow to administer benefits for its members and Highmark Inc. President Deborah Rice-Johnson said there was “big appetite for unbranded TPA” services elsewhere.
The newly formed organization will have a community- based
board of directors, most of whom will be former HealthNow board members. Physician Michael Edbauer, currently HealthNow’s executive vice president and chief strategy and growth officer, will become president of Highmark Western and Northeastern New York, assuming responsibility for all health plan affairs in the service area.
With the affiliation, Highmark has about 6.6 million members in Pennsylvania, West Virginia, Delaware and now New York. Like Highmark, HealthNow has commercial, Medicaid and Medicare Advantage business lines.