EXHIBIT 99.1
Contacts:
Michael Earley Al Palombo
Metropolitan Health Networks Cameron Associates
Chairman & Chief Executive Officer Investor Relations
(561) 805-8500 (212) 245-8800 Ext. 209
mearley@metcare.com al@cameronassoc.com
METROPOLITAN HEALTH NETWORKS DETAILS PLANS OF ITS MEDICARE ADVANTAGE HMO LAUNCH
Company Positions Itself for Growth as it Expands its Managed Care Business in
Florida
WEST PALM BEACH, FL, June 7, 2005 - Metropolitan Health Networks, Inc.
(AMEX:MDF) (PCX:MDF) a provider of high quality, comprehensive healthcare
services to Medicare beneficiaries in South and Central Florida, today discussed
some of the underlying components of its strategy to launch its Medicare
Advantage HMO through its wholly owned subsidiary, METCARE Health Plans, Inc.
("MHP").
"We have been evolving our company in this direction for some time," commented
Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health
Networks. "Over the course of the last 30 months we have achieved significant
efficiencies in all aspects of our operations, focused on the things we do best,
and returned the company to profitability and stability. We are now directing
our attention to top line revenue growth and the capture of market share for our
company in areas where we see natural opportunities for expansion."
CMS information indicates that MHP's six targeted counties of Martin, St. Lucie,
Okeechobee, Sarasota, Charlotte and Lee are home to nearly 360,000 residents
eligible for Medicare coverage. Currently, approximately 22,300 of these
Medicare beneficiaries are covered under a Medicare Advantage Plan, or only
about 6%. This compares to Medicare Advantage participation nationwide of 13%,
in Florida of 19%, and 29% and 38% in our current Daytona and South Florida
Humana markets, respectively. The six targeted counties are served by anywhere
from one to three Medicare Advantage plans today, which compares to South
Florida counties each served by 10 or more plans.
Currently the average 2005 Medicare Advantage premium or Adjusted Average Per
Capita Cost ("AAPCC") paid by CMS in our new markets is approximately $715 per
member per month. This amount compares to the AAPCC of $678 in the Daytona
market and $771 in South Florida's Palm Beach County. The actual premium paid
per member can vary from the average rate depending on factors including sex,
age and relative health status.
Recently, Metropolitan Health Networks reported that its wholly owned
subsidiary, MHP, received its Certificate of Authority from the State of Florida
to operate as a Medicare HMO on April 22, 2005. On May 27, 2005, MHP received
notification that it was awarded a contract with the Centers for Medicare and
Medicaid Services ("CMS") to operate a Medicare Advantage plan serving Medicare
beneficiaries in six Florida counties, effective July 1, 2005.
"Our advertising campaign, utilizing print, radio, direct mail, and seminar
presentations is expected to kick off in July," Earley stated. "Our sales
efforts utilizing employed sales executives and the insurance brokerage
communities in each local market will commence at the same time. These marketing
and sales efforts will be supported by our administrative and data functions,
our customer service capabilities and a comprehensive product website, all of
which we anticipate will come online during the months of June and July."
MHP indicated that its Medicare Advantage product will be marketed and sold
under the name, AdvantageCaresm. "In preparation for the launch of
AdvantageCaresm, we have worked extensively with TURKEL, a Florida-based
marketing and brand development firm to research our markets, help us target our
consumers, and develop and test the AdvantageCaresm brand and positioning. In
fact, our just-released 2004 Annual Report, available on our website, includes a
peek of the AdvantageCaresm look on the back cover," remarked Earley.
Earley commented further, "To first apply and then be approved to operate a
Medicare Advantage plan in these counties we had to contract a comprehensive
network of physicians, ancillary service providers, and hospitals. While network
development and management is a process of continuous improvement, today we have
substantial networks in our six counties including approximately 110 primary
care physician practices, more than 700 specialists and ancillary service
providers, and ten hospitals."
"Although we have been in the Medicare managed care business for a number of
years and have tremendous capabilities in managing and providing care, the
development of our own HMO has required additional talent and skill sets to
handle additional activities ranging from marketing and sales, to membership
administration to claims processing," Earley stated. "To that end we have
recruited a number of key executives to develop and manage these capabilities:
Key Management Hires:
>> Ernest C. Cook, Jr., M.D., Chief Executive Officer of Metcare of
Florida, Inc. Dr. Cook is responsible for the Company's operating
unit that provides care to the company's existing Humana membership
and to the new HMO members. Dr. Cook has 25 years of experience in
administrative medicine and clinical patient care family practice.
Prior to joining Metcare of Florida, Inc., Dr Cook was the Chief
Medical Officer and Vice President of Clinical Innovation for
Humana, Inc. with lead accountability for Humana's Commercial
Clinical operations throughout it's Southeastern Region. He has also
served as Vice President of Operations and Chief Medical Officer at
Cogent Healthcare, Inc, a premier hospitalist inpatient care
management company. Dr. Cook has proven administrative skills,
clinical experience and expertise in managed care operations.
>> John Van Wart, Senior Vice President, Sales and Marketing,
METCARE Health Plans, Inc. John brings 20 years of health care
experience to the company. John was recruited from Regence
BlueShield where he was the Washington Manager of Consumer
Sales. He was responsible for leading the success of the
Individual, Dental, and Medicare product lines. He managed
Consumer Sales, Marketing, and Enrollment as well as
promotional campaigns for the State of Washington. Prior to
joining Regence BlueShield, John served as Regional Director
of Medicare Sales for Humana, Inc. in Florida's Daytona,
Orlando and Jacksonville markets. As the Director, he earned
national recognition for expanding Medicare membership and
exceeding sales and membership goals.
>> Dale Brown, Vice President, Business Solutions, METCARE Health
Plans, Inc. Mr. Brown has over 15 years experience providing
business solutions in the managed care market. He is
responsible for providing business application configuration
to effectively administer membership enrollment, benefit
plans, provider demographics and contracts, claims
adjudication and capitation payments at MHP. He is an expert
in utilizing and managing Computer Science Corporation's Power
MHS Managed Healthcare Information System, the technology
platform underlying the HMO's administrative and data
functionality. Dale began his career in the managed care
information systems department at Nationwide Insurance HMO in
1990. He has since played an important leadership role in the
success of several other managed care organizations including
Cigna, where his team won the Platinum Award for the Y2K
remediation of the core business application systems. Dale
went on to successfully lead several managed care business
application system conversions. He played the lead role in the
consolidation and system integration of four disparate health
plans in South Florida to form a single $2 billion company.
>> Alejandro Alonso, Vice President, Finance, METCARE Health
Plans, Inc. Alejandro has over 20 years of experience in the
finance and management areas in the Florida health care
industry with a focus on managed care. He is responsible for
all financial matters for the HMO, in addition to providing
analytical support to the Company's PSN operation. Alejandro
began his career as a Financial Analyst at International
Medical Center, which subsequently was acquired by Humana
Medical Plan. He remained at that organization for more than
twelve years, where he served as Associate Executive Director
of Finance. He spent the following six years, managing groups
of adult and pediatric physician practices for a managed care
organization and a major children's hospital in the South
Florida area. Prior to coming to MHP, Alejandro was the Vice
President of Affiliated Provider Services at another major
managed care organization in the South Florida market. He has
also provided consulting services to specialty and primary
care physician networks, diagnostic groups, and management
services organizations ("MSO's").
"Our new executives, along with our core business management, medical
professionals and staff, form a complete and experienced managed care team with
deep roots in the senior and Florida markets," Earley stated.
In addition to recruiting new members to the management team, MHP reported that
it has aligned itself with a number of important outside service providers with
the necessary expertise in key business disciplines:
>> TURKEL: Metropolitan Health Networks began working with TURKEL
nearly a year ago as it developed the concept for its HMO. Founded
in 1983, TURKEL (www.turkel.info) specializes in total brand
management through comprehensive, ideas-driven strategies. The
agency has achieved national recognition for it's creation of "Brain
Darts" - simple, compelling, powerful communications that break
through the clutter of today's busy advertising environments and
build desire.
>> HF/Management Services, LLC (HFMS): MHP has engaged HFMS to
provide information technology, member services functions,
enrollment processing, and provider directory production. HFMS
is jointly owned by over 20 nationally recognized hospitals
and medical centers. These hospitals and medical centers also
own Healthfirst, a provider-owned managed care organization in
New York City. HFMS provides complete Management Services
Organization ("MSO") services to Healthfirst for all lines of
business and has over 450,000 lives currently under
management.
>> Innoviant, Inc.: MHP has contracted with Innoviant to provide
prescription management services. Innoviant spun off from
former parent Wausau Benefits in August 2002. Innoviant
manages group prescription programs for self-funded employers,
third-party administrators and health plans, including taking
responsibility for group setup, benefit structure, preferred
products list management, customer service, and electronic
claim processing. Innoviant offers its own national pharmacy
network as well as retail and mail order services at reduced
rates.
>> Reden & Anders, Ltd.: The Company has been utilizing the
services of Reden & Anders as it developed its HMO business
plan. They have played an integral role in the regulatory
application processes at both the state and federal levels.
Reden & Anders is a national actuarial, clinical and
management consulting firm specializing in financial and
business decision support for the health care industry. They
work with a full range of clients: managed care companies,
insurance carriers, health care providers, employers, employer
coalitions, medical device manufacturers and pharmaceutical
companies.
>> Practis, Inc.: AdvantageCaresm's website has been constructed and
will be maintained by Practis. Founded in 1998, Practis, Inc. is a
privately held web design and development firm located in Rochester,
New York. Focused on providing award winning web site design
services specifically to healthcare organizations nationwide,
Practis brings their healthcare background, web design expertise and
unparalleled customer service to a rapidly changing healthcare
market.
>> Holland & Knight LLP: MHP retained Holland & Knight as its
primary regulatory counsel. Holland & Knight's
responsibilities include counseling MHP on the various
regulatory rules and regulations associated with licensing of
an HMO in the State of Florida and ushering the various
applications through the Florida state agencies. Holland &
Knight is one of the nation's premier law firms with over
1,200 attorneys. Specifically, the Tallahassee office features
an interesting diversity of practice areas, with emphasis on
commercial and regulatory litigation, administrative law and
legislative representation, appellate practice, health care
practice, insurance, environmental law, constitutional law and
state taxation.
>> Hunton & Williams LLP: Metropolitan Health Networks is committed to
the highest standards of corporate governance and compliance
throughout its organization. In May of 2004, the Company identified
Hunton & Williams as corporate and securities counsel to help
implement and manage a comprehensive corporate and compliance
framework. Hunton & Williams is over 100 years old, founded in 1901,
with more than 850 attorneys in 17 offices serving clients in over
100 countries around the world. The Miami office of Hunton &
Williams has 56 lawyers and one of the larger corporate practices in
South Florida, receiving the South Florida Business Journal's 2005
Business of the Year Award in the legal services category. They are
attorneys with a business focus - counseling their clients to help
them execute their business strategies quickly and effectively.
Earley concluded, "We understood that in order to drive shareholder value we
needed to bring our operational house in order and build a solid foundation on
which to grow our organization. This includes maintaining and strengthening our
excellent relationship with Humana. While the new HMO is an exciting venture, we
still remain focused on, and are committed to, our core business of caring for
nearly 27,000 Medicare Advantage member enrolled through Humana, Inc. Humana has
been our business partner since the late 1990's and together we see the growth
opportunities afforded for Medicare Advantage plans by the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 ("MMA") signed into law just 16
months ago. Together, we expect to see growth in our shared business.
Nevertheless, we also needed to focus on a business segment in which we had the
most expertise and which had potential for future growth. We believe that we now
have the financial and human resources required to succeed in the launch of
MHP's HMO and we are excited about the prospects of the Company's future. We
will be working hard to roll out this business as quickly and efficiently as
possible and look forward to reporting on our progress in quarters to come."
Conference Call Information:
The company's senior management will host a conference call to discuss the
Company's plans for its wholly owned subsidiary's, MHP. Conference call details
are as follows:
When: Tuesday, June 7, 2005, 11:00 a.m. (Eastern)
Web cast address: http://www.streetevents.com, http://www.fulldisclosure.com
Dial-in Numbers: (800)798-2801(domestic) or(617) 614-6205(international),
pass code # 53442413
Contact: Al Palombo, Cameron Associates, (212) 245-8800 Ext. 209,
al@cameronassoc.com
If you are unable to participate, an audio replay of the call will be available
beginning two hours after the call and will be available until 11:59 p.m. on
June 10, 2005, by dialing (888) 286-8010 (domestic) or (617) 801-6888
(international) using confirmation pass code 57413399.
About Metropolitan Health Networks, Inc.:
Metropolitan is a growing healthcare organization in Florida that provides
comprehensive healthcare services for Medicare Advantage members and other
patients in South and Central Florida. To learn more about Metropolitan Health
Networks, Inc. please visit its website at http://www.metcare.com.
Forward Looking Statements:
Except for historical matters contained herein, statements made in this press
release are forward-looking and are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Without limiting the
generality of the foregoing, words such as "may", "will", "to", "plan",
"expect", "believe", "anticipate", "intend", "could", "would", "estimate", or
"continue" or the negative other variations thereof or comparable terminology
are intended to identify forward-looking statements.
Investors and others are cautioned that a variety of factors, including certain
risks, may affect our business and cause actual results to differ materially
from those set forth in the forward-looking statements. These risk factors
include, without limitation, (i) pricing pressures exerted on us by managed care
organizations and the level of payments we receive under governmental programs
or from other payors; (ii) future legislation and changes in governmental
regulations; (iii) the impact of Medicare Risk Adjustments on payments we
receive for our managed care operations; (iv) our ability to successfully
recruit and retain medical professionals; (v) our ability to successfully
maintain the licensing of our HMO from the requisite state and federal
regulatory agencies;(vi) our ability to fund and develop the necessary
capabilities to successfully launch our HMO; (vii) the impact of Medicare Risk
Adjustments on payments we receive for our managed care operations; and (viii) a
loss of any of our significant contracts. The Company is also subject to the
risks and uncertainties described in its filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the year ended
December 31, 2004.