- Dennis Domrzalski
- Reporter- Albuquerque Business First
Lovelace Health Plan, an institution in New Mexico health care, has agreed to sell itself to Blue Cross and Blue Shield of New Mexico in a deal expected to close Dec. 31, Lovelace Health System President Ron Stern told employees Monday.
Lovelace Health System will continue to own its six hospitals and its physician network, Stern said. Additional details on the why and how of the deal continued to trickle out Monday.
In a letter sent to Lovelace Health Plan employees Monday that was obtained by Albuquerque Business First, Stern said the sale was necessitated in part by LHP’s failure earlier this year to win a contract to be one of the state’s Medicaid insurers.
“Earlier this year we learned that LHP was not selected to participate in New Mexico’s Medicaid program, Centennial Care,” Stern wrote. “As a result, we faced the loss of 84,000 Medicaid enrollees or 40 percent of our membership. We chose to work with Molina [Healthcare of New Mexico] to transition our members to their plan, which allowed Medicaid recipients continued access to our hospitals and clinics.
“Since that time we carefully evaluated all options that would allow us to continue serving our health plan members while minimizing the financial impact of not being included in Centennial Care. Without economies created by a larger membership, strategically working with Blue Cross and Blue Shield is the best option for our organization.”
Blue Cross and Lovelace officials have scheduled a 1 p.m. news conference to announce the sale, BCBSNM said in a news advisory. Officials from the two companies declined to comment before the news conference.