Significant network change

AEtna
US Healthcare

7600A Leesburg Pike
Falls Church, VA 22043

Peggy Colangelo
Account Executive
(703) 903-7075
Fax (703) 903-0316

August 28, 1998

Mr. William Hildenbrand CRL0 Administrator Railroad Employee Health/Welfare 26555 Evergreen Rd. Southfield, MI 48076-4225	Mr. Joseph Epstein Director, Employee Benefits Railroad Employee Health/Welfare I 901 L St., N.W. Washington, DC 20036

Subject:

Significant Network Change - Potential Hospital Terminations, Northeast PA Network - A Products PPO (Net ID 214); MC (Net ID 486); EPO (Net ID 1669); HMO/QP0S (Net ID 1984); MEHMO/MEQPOS (Net ID 2110)

Dear Bill & Joe:

I am writing to provide you with advance notice of the decision by the facilities of the Northern Tier Health Alliance PHO to terminate their participation with Aetna U.S. Healthcare™ effective January 1, 1999. The facilities include Mid Valley Hospital, Tyler Memorial Hospital, Wayne Memorial Hospital and Marian community Hospital. They all currently participate in all products offered through the Northeast Pennsylvania Aetna U.S. Healthcare network. The locations of the hospitals are as follows:

Mid Valley Hospital
1400 Main Street
Peckville, PA 18452
(711) 383-5500

Wayne Memorial Hospital
601 Park Street
Honesdale, PA 18341
(717) 253-8100

Tyler Memorial Hospital
Rural Delivery 1
Tunkhannock, PA 18657
(717) 836-2161

Marian Community Hospital
100 Lincoln Avenue
Carbondale, PA 18407
(717) 281-1000

The Northern Tier Health Alliance PHO and the facilities listed above recently informed us of their intent to terminate their contracts effective 12/31/98. Aetna U.S. Healthcare had requested a thirty-day period in which to identify the reasons for the termination as well as to begin negotiations on a new agreement. Unfortunately, this request was not accepted by the hospitals. These hospitals have participated in our network for many years and we have enjoyed a mutually beneficial relationship serving our members. We are very disappointed with this decision. Aetna U.S. Healthcare is willing to renegotiate with the hospitals if they agree to rescind the notice of termination.

If these hospitals do terminate on January 1, 1999, Mercy Hospital in Scranton is an alternative participating facility available to members in this area. Mercy Hospital in Scranton is a high quality, full services hospital that has a long term agreement with Aetna U.S. Healthcare.

At this time there are no provider terminations affiliated with these hospital terminations. However, if providers only have admitting privileges at these hospitals and do not obtain privileges at Mercy Hospital, they may be terminated in conjunction with the hospital termination date.

HMO, Elect Choice, and Managed Choice members who are utilizing a Primary Care Physician affiliated with these hospitals who do not have privileges at Mercy Hospital, will be receiving a letter from Aetna U.S. Healthcare informing them of the potential hospital and provider terminations.

We recognize the significance of this situation and are committed to keeping you informed of the status of the hospitals and providers of the Northern Tier Alliance PHO. In the meantime, please feel free to contact me with any questions or concerns you may have regarding the Northeast PA network.

Sincerely,

Peggy Colangelo
Account Executive