TO: Houston Area Employees Participating in the Domestic Medical Plan Benefits

You may have recently received communication from United HealthCare (UHC) 
concerning Memorial Hermann Health Systems' (MHHS) decision to terminate 
their contract with UHC  in the Houston/Beaumont area.  This communication 
also included the names of physicians who will be dropped from the network 
due to this action.  It is our intent to help you understand the situation.

It is our understanding that Memorial Herman Health Systems asked for a 40% 
increase in fees - a substantial increase that would have been passed on to 
you and Enron!  When United HealthCare attempted to negotiate with a counter 
proposal, Memorial Hermann cancelled their contract.

While this contractual arrangement was between the hospital system and UHC, 
Enron continues to support UHC in their ongoing contract negotiation 
efforts.  At this time, it is only UHC which has been affected, however, it 
is our understanding that Cigna has also been contacted by the hospital group 
and may be in contract negotiations at this time as well.  

Many doctors have obtained admission privileges to other area hospitals 
within the UHC Network or have contracted directly with UHC including those 
with admission privileges to The Woodlands, Sugarland and Clear Lake 
Hospitals, to name a few.  In a further effort to limit disruption to our 
affected employees and families who are enrolled in the UHC Network or EPO 
options, Enron has authorized UHC to process claims incurred between 
September 28 and December 31, 2000 as if the termination of the Memorial 
Hermann Health Systems from the network had not occurred and In-Network 
benefits applied.  Office visits will have a $10 copayment and all other 
charges will be covered at 90%.  Hospital admissions will still need to be 
pre-certified with UHC.

These steps have decreased the number of participants' affected by Primary 
Care Physician disruption from 1,050 to 127.

If You Need Medical Attention:  You or your doctor/hospital must call UHC's 
customer service number so proper benefits can be verified.  In some cases 
the hospital or doctor may request payment at the time service is performed.  
If this should happen, please obtain an itemized statement and submit it to 
UHC with a claim form for prompt reimbursement.  Claim forms can be obtained 
by calling 1-800-332-7979 or in Houston at 713-853-7979 ( press 1).

Open enrollment materials will be coming soon.  Take this opportunity to 
consider your elections for 2001.  

United HealthCare and Enron HR are committed to assisting Enron employees 
through this transition.  We will communicate any  further developments that 
may impact you or your family.
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