ASES rejects sale of Molina Healthcare’s local participation to Triple-S
Gives Long Beach, Calif.-based insurer five days to submit ‘acceptable’ proposal
SAN JUAN – Puerto Rico Health Insurance Services Administration (ASES by its Spanish acronym) Executive Director Jorge Galva Rodríguez announced Sunday that the agency rejected a proposed sale of Molina Healthcare’s local plan to insurer Triple-S.
Both Molina Healthcare and Triple-S, the largest island-based insurance company, cover medically indigent people in ASES’s Plan Vital, which is subsidized by Medicaid and local funding. The proposed transaction had been notified to ASES on April 30.
“After an evaluation of risk, the ASES board of directors, specialized consultants and our team determined that the proposed transaction is contrary to the best interests of beneficiaries and providers in Plan Vital,” Galva said in a statement.
Galva sent a letter to Carlos Carrero, president of Molina Healthcare Puerto Rico, informing him that the proposed sale was not authorized and giving him five business days to submit an “acceptable” plan to ASES and other state and federal regulators with jurisdiction over Plan Vital.
“Moreover, Molina Healthcare must continue offering its services until an orderly transition is approved before Molina ceases its functions in Puerto Rico,” Galva said.
Molina Healthcare had planned to cede its operations to Triple-S on July 1.
In his letter, Galva said that ASES would enforce all of the terms of the Plan Vital contract until a transaction is approved and Molina Healthcare exits the program. The Long Beach, Calif.-based insurer, which has been doing business on the island since 2015, currently covers 168,000 Plan Vital beneficiaries.
The ASES chief said he plans to meet with the management of Molina Healthcare this week to discuss the subject. He said that the agency will “adequately” inform beneficiaries and providers served by the insurer of “the transition plan that is finally approved.”
“In this process the patients have and will have the power of choosing their insurer and we will look out for the protection of the interests of providers in Molina’s current network,” he said.
The government-subsidized Plan Vital has contracts with private insurers to cover 1.1 million medically indigent people. The five managed care organizations (MCOs) currently providing coverage in the plan are First Medical; MMM ; Plan de Salud Menonita, Triple S and Molina Healthcare.
Molina Healthcare Inc. (NYSE: MOH), a Fortune 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 3.4 million members as of March 31. The company reported $4.3 billion in revenues and net income of $178 million during the first three months of this year.
San Juan-based Triple-S Management Corp. (NYSE: GTS) reported $896.4 million in total operating revenues for the first quarter of this year, up 13.8 percent from the year-ago period, primarily reflecting higher managed care net premiums earned. The corporation’s adjusted net income was $17.7 million, identical to the year-ago quarter.