Six months after an antitrust settlement forced New West Health Services to downsize and restructure, the company has emerged a leader in selling Medicare Advantage and supplement policies in Montana.

The restructuring essentially cut New West in half, dropping its annual revenue from $200 million to $100 million. Fifteen employees were laid off in late March, including six in the company’s Kalispell operations center.

New West is headquartered in Helena and has a regional office in Billings.

“Making this kind of change as a company is very challenging,” New West President and Chief Executive Officer David Kibbe said. “We’re proud of how we did in serving our members” during the transition. “Our employees had remarkable focus in keeping their eye on the ball.”

The nonprofit insurance provider, which began in 1998 as a health maintenance organization, was the focus of a federal Department of Justice probe sparked when New West’s hospital sponsors decided to switch their 11,000 employees’ insurance coverage to Blue Cross and Blue Shield of Montana.

“That’s what drew attention from the federal government,” Kibbe said.

Community Medical Center in Missoula, St. Peter’s Hospital in Helena, Northern Montana Hospital in Havre and the Billings Clinic are the hospital sponsors that initially put up capital to start New West.

Deaconess Hospital in Bozeman and Benefis Health System in Great Falls came in later with lesser investments and withdrew as sponsors at the end of last year, according to Tonya Ask, New West vice president of external relations.

New West, its hospital sponsors and Blue Cross negotiated a settlement with the Department of Justice. Although regulators acknowledged New West had been a “good player” in the commercial insurance business, the hospitals’ decision to switch to Blue Cross/Blue Shield — a $26.3 million deal — already had been made public, Kibbe said, and that led authorities to say the agreement threatened competition.

“At that point we couldn’t put the genie back in the bottle,” he added.

U.S. District Judge Richard Cebull then gave the go-ahead to break up New West, and the company agreed to sell its commercial health insurance business to PacificSource Health Plans of Eugene, Ore.

Anticipating the outcome of the federal review, New West let attrition occur to lessen the blow to its work force, Kibbe said. Even so, the company had to trim employees across the board, laying off nine employees in Helena and six in Kalispell.

The company now operates with 70 employees, down from 102 at the height of business. The Kalispell operations center employs 31.

New West has grown its Medicare Advantage and Medicare supplement business from about 300 individuals in 2005 to 11,350 enrolled in Medicare Advantage and 130 with supplement plans.

The company contracts with the federal Centers for Medicare and Medicaid Services to deliver Medicare Advantage and supplement benefits on behalf of the federal government, Kibbe explained.

“They’ve chosen us to deliver those benefits,” he said. “We do everything Medicare would do; we take all the risk.”

Medicare Advantage is an alternative to traditional Medicare coverage. After the Balanced Budget Act passed in 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans. Those programs originally were known as Medicare+Choice or Part C plans. In 2003, as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, those plans became known as Medicare Advantage plans.

When a person turns 65 and “ages in” to Medicare coverage, he or she can choose a Medicare Advantage plan such as those offered by New West or he or she can opt for traditional Medicare coverage. During the annual enrollment period that runs from Oct. 15 to Dec. 7, New West holds enrollment meetings and markets its Medicare plans. Eligible recipients then lock in their plan for a one-year period.

New West offers a value plan of $16 per month that features a $20 co-payment for doctor visits and $5,000 maximum out-of-pocket benefit. The company also offers an enhanced plan for $89 monthly that has lower co-payments, a $3,400 out-of-pocket benefit and includes prescription drug coverage.

Over the past two years more Medicare Advantage members have been choosing the value plan, Kibbe said, but the member preference is split about 50-50.

Ask said Medicare Advantage allows for more interaction with members and assistance to patients who may need help in managing their medical care.

“We’re delivering benefits on the federal government’s behalf,” Kibbe added.

New West now has the largest Medicare Advantage plan in Montana. Kibbe said the company’s customers by and large like the simplicity of the plan.

“The feedback we get from a number of people is that we get it, we understand,” he said. “It’s easy to use, easy to access. People like the predictability of it.”

A key factor in the company’s success, Kibbe noted, has been the continuity of service provided by the Kalispell operations center.

“We have really good customer service folks in Kalispell,” he said. “We work hard to retain those employees.”

Moving forward, New West aims to grow its Medicare supplement business, Kibbe said, and continues to expand geographically in Montana. The company serves 22 counties and is adding another six counties to its service area.

The company also hopes to offer Medicaid services at some point.

“We believe we’d be a natural player for Medicaid,” Kibbe said. “We can see ourselves being a government program company in three to four years,” offering services for Medicare, Medicaid or a combination of the two.

“As we look forward, our goal is to enable us to move from good to great,” Kibbe said.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.