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PENN STATE, HEALTHAMERICA ANNOUNCE AGREEMENT HAS BEEN SIGNED

 PENN STATE, HEALTHAMERICA ANNOUNCE AGREEMENT HAS BEEN SIGNED
 UNIVERSITY PARK, Pa., Oct. 23 /PRNewswire/ -- Officials of Penn State and HealthAmerica announced Thursday that final details of an agreement to provide health care benefits for university employees have been confirmed.
 The agreement paves the way for HealthAmerica to assume responsibility for administering Penn State's two current health care benefits options and to now add a third option, a health maintenance organization (HMO).
 "This agreement provides new options for university employees and new opportunities for Penn State in general," said James M. Wagner, vice president for business and operations. "We are excited about the arrangement that will be put into place during the next two months."
 HealthAmerica, a subsidiary of Coventry Corporation (NASDAQ: CVTY), already serves more than 60,000 members in central Pennsylvania. The addition of Penn State faculty, staff, their dependents and retirees will bring that number to more than 100,000 people.
 Penn State will spend more than $55 million to provide health care benefits to employees this year. In addition to providing an HMO option, HealthAmerica will replace Prudential in administering the current two health care options available to Penn State employees. This includes the hospital/surgical/major medical (Plan A) and the university's Healthpass program.
 "Being selected by such a prestigious institution solidifies HealthAmerica's position as a major player in the central Pennsylvania health care market," said F.G. "Chip" Merkel, president of HealthAmerica of Central Pennsylvania. "We intend to make the transition virtually transparent to university employees who remain with the current two health care options. They will not notice any substantial changes.
 "Those who elect the new HMO option will find the health benefits process easier than before in many respects," Merkel said. "For instance, there will be no claims forms to submit and there are no deductibles."
 Wagner said that throughout the negotiations with HealthAmerica it has been the university's intention to provide comprehensive, quality health care at a reasonable cost.
 "If we can reduce our costs by even a few percentage points through the HMO option, it will save the university and its faculty and staff millions of dollars," Wagner said. "Those are funds that can be used in other areas of the university, particularly in difficult economic times like this."
 Statewide, HealthAmerica provides health care benefits to more than 250,000 members through affiliations with 35 hospitals and some 1,500 physicians in the Pittsburgh and Harrisburg areas.
 Coventry Corporation also operates a preferred provider organization, or PPO, called HealthAssurance. Penn State's Healthpass will remain in operation and will be managed by HealthAmerica.
 HealthAmerica has already been providing HMO benefits to the university's Harrisburg and Pittsburgh area campuses, as well as at The Milton S. Hershey Medical Center. That arrangement will continue and in January it will be extended for the first time to employees at University Park. Future plans call for a PPO network serving the majority of Penn State campuses by 1994.
 "Under the HMO option, a university faculty or staff member selects a primary care physician who in turn coordinates fully covered care with selected specialists and other health care providers within the network, as needed," said Billie Willits, assistant vice president for Human Resources.
 In anticipation of an agreement, HealthAmerica recently completed negotiations with The Milton S. Hershey Medical Center and Centre Community Hospital to make each facility a part of the health provider network. To date, almost 60 physicians in the Centre County area have signed on as HMO and PPO providers.
 Merkel said HealthAmerica will establish an office in State College which will be staffed by both a general manager and a medical director along with other administrative and member-services personnel. He expects the office to be fully functional by December in time to enroll new members for January.
 Costs for health care for university employees have increased approximately 20 percent a year in each of the last five years, Willits said.
 "The flexibility we are offering university employees means they need to review their needs more carefully than ever before and then make the selection that is right for their situation," Willits said.
 University employees have until the end of November to select one of three health benefits options. A faculty or staff member may participate in Plan A, Healthpass, or join the new HealthAmerica HMO option, where it is available.
 -0- 10/23/92
 /CONTACT: Ms. Kendall Marcocci of HealthAmerica, 717-540-6746/
 (CVTY) CO: HealthAmerica; Penn State; Coventry Corporation ST: Pennsylvania IN: HEA SU:


KE-JG -- PG014 -- 4371 10/23/92 17:30 EDT
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Date:Oct 23, 1992
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