Foundation Health Completes QualMed Sale to American Family

Los Angeles-based Foundation Health Systems Inc. has completed the sale of Qualmed Washington Health Plan, an HMO subsidiary, to American Family Care Inc. of Long Beach, Calif. Terms of the transaction were not disclosed.

According to the sales agreement, announced by FHS in October, American Family Care now assumes ownership of the QualMed health plan license and will retain QualMed's Medicaid and Basic Health Plan membership. American Family Care, which owns full-service health plans in California, Utah and Michigan, specializes in providing health care coverage to Medicaid beneficiaries.

"We will continue to work closely with the Insurance Commissioner and her office to ensure our members a seamless transition to other health plans and to provide continuity of coverage until QualMed's transition out of Washington is complete," said Jay Gellert, president and chief executive officer of FHS, in a company statement.

As part of its transition out of Washington, FHS also announced on October 8 an agreement with PacifiCare of Washington to facilitate QualMed's departure from the western Washington commercial market and an agreement with Premera Blue Cross to facilitate QualMed's departure from the eastern Washington commercial market. FHS will remain responsible for health care coverage services provided by QualMed prior to the transition of commercial members to other health plans, including PacifiCare of Washington and Premera.

FHS is the nation's fourth-largest publicly traded managed health care company, offering services to 5.5 million individuals in 17 states. As of the end of September 1999, QualMed provided health care coverage services to more than 55,000 Medicaid and 5,000 Basic Health Plan members through the state's Healthy Options Medicaid and Basic Health Plan programs.