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MAGNACARE ANNOUNCES AGREEMENTS WITH THREE INSURERS TO PROVIDE MANAGED HEALTHCARE FOR THEIR SMALL GROUP BUSINESS

 NEW YORK, March 22 /PRNewswire/ -- A Preferred Provider Organization (PPO) based in New York, which already provides cost-effective managed health care services to more than 600,000 individuals through contracts with employee benefit plans, self-insured labor unions and other organizations, today announced agreements with CHUBB LifeAmerica, US Life and HomeLife Group Benefits and Services Insurance Companies to provide managed healthcare for their small group business.
 "We expect to become an integral part of the health care scene in the downstate New York area with the addition of these companies," said Anthony J. Bacchi, M.D., president and chief executive officer of MagnaCare, a PPO which is a division of Preferred Choice Management Systems, Inc.
 These three insurers are among a handful of companies who will continue to offer medical insurance to their small group clients (defined as 50 employees or less) under the requirements of the new law which becomes effective on April 1, 1993 requiring insurers to provide open enrollment and to calculate premiums for their small group business on a community-rated basis.
 Because of the new community rating and the open enrollment requirements, many other insurers have decided to abandon their small group business in New York, fearing major underwriting losses. MagnaCare expects to make it possible for its new clients to operate efficiently within the new law because arrangements with over 6,000 selected doctors keep fees modest while assuring high quality medical care.
 There are an estimated 90 million Americans now enrolled within PPO networks in the United States. Dr. Bacchi believes that PPOs are part of the solution to the nation's medical care dilemma. "PPOs make it possible for Americans to have what they have indicated is a priority -- the right to choose their own doctors," he said. "In addition, PPOs have the ability to carefully monitor physicians' performance while controlling abuses and keeping reimbursements at predictable levels."
 The reason for the widescale acceptance of the PPO concept by the medical profession, Dr. Bacchi believes, is that PPOs maintain the traditional fee-for-service arrangement with physicians while assuring them of an increased number of patients who will establish an ongoing relationship. Yet, at the same time, the program allows for a patient to remain with a physician of his or her choice outside of the PPO network, merely by assuming higher out-of-pocket expenses.
 The MagnaCare PPO network currently covers the five boroughs of New York City, Westchester and Rockland Counties, Long Island, and northern and central New Jersey with approximately 6,000 participating physicians who are affiliated with over 35 of the area's most respected hospitals. In addition, the network also includes over 350 participating radiology and laboratory locations.
 "MagnaCare is proud to have been selected by these insurance companies," Dr. Bacchi noted. "It is a recognition of the success that our company has had in reducing medical and diagnostic costs 30 to 35 percent while providing quality medical care to over 600,000 of our current participants.
 "While there have been many negative comments on the prospects of the small group risks because of the new law," Dr. Bacchi said, "we and our new clients are confident that the MagnaCare program will bring a high degree of stability and cost effectiveness to medical care in our area of operation."
 -0- 3/22/93
 /CONTACT: Anthony J. Bacchi, M.D., president and CEO of MagnaCare, 212-315-3300, or fax, 212-315-4039/


CO: MagnaCare; Preferred Choice Management Systems, Inc. ST: New York IN: HEA INS SU:

GK-TS -- NY072 -- 8272 03/22/93 14:02 EST
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Date:Mar 22, 1993
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