We have just been informed that Kaiser Foundation Health Plan of Kansas City, Inc., (Kaiser) Enrollment Code HA, has entered into a proposed sale agreement with Coventry Health Care of Kansas, Inc., (Coventry) to transfer its HMO business. The sale is contingent upon the approval by the states of Kansas and Missouri. Coventry will continue to provide Federal members with the same Kaiser health benefits and rates throughout the remainder of 2001.

Kaiser plans to close four Kansas City area medical offices. Health care services will end at the Blue Ridge and Northland medical offices on March 1, 2001, and at the Baptist and Parallel medical offices on April 1, 2001. Kaiser enrollees using these facilities will need to decide where to go to obtain health services after these facilities close.

Kaiser has indicated that all members should continue to have excellent access to health care services through the Coventry provider network. Coventry has stated they are willing to offer contracts to the Kaiser physicians from these four medical offices. We suggest that Kaiser members ask their physicians if they already belong to the Coventry network or if they plan to join.

We are authorizing an opportunity for Kaiser enrollees in code HA, to change their enrollment to another participating plan. The opportunity to change enrollment will begin immediately and continue through April 30, 2001. The effective date of enrollment changes should be a pay period beginning on or after February 11, 2001, but no later than May 1, 2001. If enrollees do not change plans during this special period, their 2001 enrollment (rates and benefits) will remain the same except that Coventry will administer the Kaiser contract.

Thank you for your cooperation in this matter.

Abby L. Block, Chief Insurance Policy    and Information Division

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