Health Plus is one of the fastest growing managed care organizations in New
York City. Established in 1984 by Lutheran Medical Center (LMC) to provide
coordinated quality healthcare and improve access to care for a diverse and
growing number of uninsured New Yorkers in Southwest Brooklyn, Health
Plus now serves the five boroughs of New York and Nassau County and covers
nearly 270,000 members. The history and vision of Health Plus are eloquent
testimony to the company’s commitment to serving its constituency.

To understand why Lutheran Medical Center (LMC), a 501 bed, community
hospital in Southwest Brooklyn, created a Medicaid Managed Care health
plan, it is helpful to know what was happening with New York State Medicaid
in the early 1980’s. Most Medicaid recipients in New York at that time were
fee-for service. Each time the Medicaid recipient received a covered service,
the provider billed the State Medicaid program.

The Medicaid recipient was able to see any provider that participated in the
Medicaid program and agreed to accept Medicaid reimbursement rates.

This sounds like a good thing for Medicaid recipients. After all, it gave them
freedom of choice and their providers were reimbursed for their care.
However, in reality, it was difficult for people receiving Medicaid to find a
provider that accepted Medicaid reimbursement. It was hard to find a private
doctor who accepted Medicaid, and many Medicaid recipients received care
in “Medicaid Mills,” emergency rooms, and overcrowded clinics. Because an
individual did not have “a medical home,” care was often episodic and
focused on acute intervention rather than primary or preventive care.
Delays in medical intervention often meant the person was not treated until
she was very sick and consequently her care was much more expensive.
Care was fragmented and uncoordinated and no one was accountable for the
cost or quality of the care received. In addition, some providers took
advantage of the system and billed for services never rendered, among other
fraudulent practices.

The cost of the Medicaid Program was skyrocketing. The fee-for service
model did not allow New York State to ensure access to care, control cost,
prevent fraud and abuse or guarantee quality of services. Other states,
feeling a similar financial pinch were already turning to mandatory Medicaid
managed care.

In 1982, with funding from a sizable Robert Wood Johnson Foundation grant,
LMC applied for a full capitation contract from New York State and New York
City to provide healthcare to Medicaid recipients in Southwest Brooklyn. By
applying the principles of managed care, the founders of Health Plus hoped
to provide cost effective, quality, coordinated medical care to the Medicaid
enrollees. On April 1, 1984, LMC began to enroll Medicaid recipients in its
program, Health Care Plus.

Over the next six years, Health Care Plus grew to an enrollment of
4,000 members and remained at that level.

In 1991, the State and City received approval from HCFA ( Health Care
Finance Administration) to pilot a demonstration project. Most persons
receiving Aid to Families with Dependent Children (AFDC) public assistance
who lived in ten selected zip codes in Southwest Brooklyn were required to
enroll in a Medicaid managed care program in order to receive their Medicaid
health benefits. This project was called the Southwest Brooklyn Mandatory
Medicaid Enrollment Demonstration Project. Health Plus, which covered a
significant geographic area of Southwest Brooklyn, was one of three original
plans designated to participate in the project. Having had 8 years of
experience in Medicaid managed care, Health Plus supported and offered its
full knowledge in helping to design the demonstration project. As a result of
the increased enrollment through participation in the demonstration project,
Health Plus grew to a Medicaid enrollment of 13,978.

In 1991, Health Plus began to market the state-funded Child Health Plus
(CHP) program. Then offering ambulatory care to children up to the age of
13, CHP addressed a critical need for health coverage in Health Plus’s local
community.

In 1992, LMC began to explore the possibilities of working with other medical
centers in Brooklyn and Staten Island to expand the Health Plus programs.
After extensive consultation with several medical centers, LMC decided to
apply for a PHSP (Pre-paid Health Services Plan) licensure, with LMC and
Sisters of Charity in Staten Island as the principal providers of service. The
PHSP license was granted in January 1995 and LMC transferred its existing
contracts to Health Plus, effective February 1, 1995.

In November 1995, the New York State Department of Health sent out a
Request for Proposal (RFP) to plans interested in participating, or continuing
to participate, in the Medicaid Managed Care program. Applicants were
required to cover each borough or county served in its entirety. Health Plus
developed a network of quality medical and behavioral health providers to
cover the boroughs of Brooklyn and Staten Island, and to meet the Medicaid
benefit package requirements. In June 1996, Health Plus was offered a
contract by the New York State Department of Health.
August 1996, the contract went into effect. Shortly thereafter, Health Plus
expanded its service to include the rest of Brooklyn and Staten Island.

In 1998, Health Plus expanded its service area to include Queens and the
following year, expanded again to serve the Bronx. In 2000, Health Plus
began service in Manhattan, making it a citywide organization.
In 2002, Health Plus began enrolling members in its newest program, Family
Health Plus -- a New York State program that provides affordable healthcare
to eligible, uninsured adults, ages 19-64, who are not eligible for Medicaid.
In 2005, expansion into neighboring Nassau County increased the company’s
service area further.

Health Plus contracts with Hospital Based Systems, primary care/multispecialty
physician groups ( Medical Groups and Independent Practitioner
Associations), and Independent Practitioners (community physicians) to
provide care to members.

Health Plus generally pays primary care physicians on a capitation basis, that
is, a set dollar amount per member per month. The primary care physician
receives the same amount of money whether the member did not see the
doctor that month or went several times. Primary care physicians in private
offices also receive incentive payments for preventive care.
Specialists are generally paid on a fee-for-service basis. A contracted
specialty physician provides an authorized service to a member and bills the
plan for the service. Health Plus pays the specialist a pre-negotiated fee,
generally a percentage of the established rate that Medicaid or Medicare
would pay for the service.

Health Plus currently enrolls Health Care Plus, Child Health Plus and Family
Health Plus members in all five boroughs of New York City and Nassau
County. In the future, Health Plus may decide to expand its service area or
develop new business lines that further the Plan’s mission - promoting the
health of culturally diverse populations through partnerships with members,
providers, and community-based organizations.