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Coventry Will Buy WellPath from Duke

Coventry Health Care Inc., a managed health care company based in Bethesda, Md., has signed an agreement with Duke University Health System to buy Duke's managed care subsidiary, WellPath Community Health Plans, for approximately $25.5 million.

Coventry announced the purchase plan July 7, noting that WellPath has 152,000 members and serves over 50 counties in the Carolinas, with a concentration in the Triangle, Charlotte and Greensboro markets. The sale is expected to close in the third quarter of 2000, subject to regulatory and other approvals.

Duke created WellPath five years ago in a joint venture with New York Life Insurance Co. The health system bought out New York Life's share last year.

"We are understandably proud of the high quality health insurance plan that WellPath has become in five short years, said Bill Donelan, health system executive vice president. "However, the primary focus of the Duke University Health System is improving the health of the people of this state and region throughout the highest quality care and break-through innovation in diagnosis and treatment.

"The decision to create WellPath five years ago was the right one at that time. However, the managed care environment has changed a great deal since 1995, and we believe that the time is right to let those who know about insurance products lead WellPath into the future and let the world class physicians and nurses in the Duke Health System focus on providing the best possible medical care to our patients."

WellPath administers the Duke managed care plan for university and health system employees and Lois Ann Green, director of Benefits administration, said the sale will not affect Duke employees.

As part of the definitive agreement, Coventry said it will enter into a three-year provider contract with Duke University Health System for health care services and will acquire WellPath's contract to administer Duke University's self-funded managed care health benefit program for employees.

"We are excited about acquiring WellPath," said Allen F. Wise, Coventry's president and chief executive officer. "This health plan had the highest customer satisfaction rating among all North Carolina HMOs as listed in the North Carolina Department of Insurance's 1999 HMO Performance Report. In addition, our continuing relationship with a premier health system such as Duke will ensure continuity of high quality care for our members. WellPath and our existing Charlotte business together form an excellent foundation for continued profitable growth."

Coventry Health Care operates health plans and insurance companies under the names Coventry Health Care, Coventry Health and Life, HealthAmerica, HealthAssurance, HealthCare USA, Group Health Plan, Southern Health and Carelink Health Plans.