Wellchoice (NYSE:WC)
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WellChoice, Inc. (NYSE: WC) announced today that its
primary operating subsidiary, Empire Blue Cross Blue Shield, was
selected to enter into negotiations regarding the Prescription Drug
Contract for the New York State Account for a three-year period
commencing January 1, 2006.
This account, which is known as The Empire Plan, is the health
insurance plan for employees of New York State and other public
authorities, public benefit corporations, and participating government
employers. The Company currently provides hospital-only coverage for
The Empire Plan and as of June 30, 2005, the New York State account
covered approximately 998,000 members.
The Company will collaborate with Caremark Rx, Inc., in
administering the program. Services to be provided under the
prescription drug contract will include account management, pharmacy
member services, retail pharmacy network contracting and management,
mail pharmacy services, formulary management and compliance,
utilization management and pharmacy clinical policies and programs,
claims processing and payment of claims to participating pharmacies.
The Company expects to receive between $1.3 and $1.5 billion in
revenues in the first year of the contract, a portion of which will be
paid to Caremark for the services they provide.
"Having represented the State account for over 50 years, we are
pleased to have been selected by the State as its vendor of choice to
expand on the services we currently provide," said Michael A. Stocker,
M.D., president and CEO of WellChoice. "We believe that this
combination of two industry leaders - WellChoice and Caremark - will
help ensure the expertise and knowledge needed to effectively manage
this program."
The final award is contingent upon the successful contract
negotiations between the NYS Department of Civil Service and the
Company as well as approval by the Office of the NYS Comptroller.
About WellChoice, Inc.
WellChoice, Inc. is the parent company of the largest health
insurer in the State of New York, based on PPO and HMO membership.
WellChoice, through its Empire Blue Cross Blue Shield subsidiaries,
has the exclusive right to use the Blue Cross and Blue Shield names
and marks in 10 downstate New York counties and one or both of these
names and marks in selected counties in upstate New York. WellChoice
offers a broad portfolio of products, including managed care and
traditional indemnity products, and has a broad customer base
including large group, middle-market and small group, individual, and
national accounts. Additional information on WellChoice can be found
at www.wellchoice.com.
About Caremark Rx
Caremark Rx, Inc. is a leading pharmaceutical services company,
providing through its affiliates comprehensive drug benefit services
to over 2,000 health plan sponsors and their plan participants
throughout the U.S. Caremark's clients include corporate health plans,
managed care organizations, insurance companies, unions, government
agencies and other funded benefit plans. The Company operates a
national retail pharmacy network with over 60,000 participating
pharmacies, seven mail service pharmacies, the industry's only
FDA-regulated repackaging plant and 21 licensed specialty pharmacies
for delivery of advanced medications to individuals with chronic or
genetic diseases and disorders. Additional information about Caremark
Rx is available on the World Wide Web at www.caremarkrx.com.
Cautionary Statement
Some of the information contained in this press release is
forward-looking, including statements relating to future financial or
business results. Forward-looking information is based on management's
estimates, assumptions and projections and is subject to significant
uncertainties and other factors, many of which are beyond the
company's control. Important risk factors could cause future results
to differ materially from those estimated by management. Those risks
and uncertainties include but are not limited to: execution of the
definitive agreement for the New York State Account Prescription Drug
Program, our ability to accurately predict health care costs and to
manage those costs through underwriting criteria, quality initiatives
and medical management; product design and negotiation of favorable
provider reimbursement rates; our ability to maintain or increase our
premium rates; possible reductions in enrollment in our products or
changes in membership including the loss of either the New York City
or the New York State account; the regional concentration of our
business in the New York metropolitan area and the effects of economic
downturns in that region or generally; future bio-terrorist activity
or other potential public health epidemics; the impact of health care
reform and other regulatory matters; and the outcome of litigation.
For a more detailed discussion of these and other important factors
that may materially affect WellChoice, please see WellChoice's filings
with the Securities and Exchange Commission, including the discussion
of risk factors and historical results of operations and financial
condition in its Annual Report on Form 10-K for the year ended
December 31, 2004 and its Quarterly Report on Form 10-Q for the three
months ended March 31, 2005 and for the three months ended June 30,
2005.