Merger, Acquisitions, Partnerships and Investments


Plans

Anthem considers Beacon acquisition as strategic play for Arkansas PASSE market

The recent purchase of Beacon gives Anthem 75% of the emerging capitated market in Arkansas. They already had 49% of the PASSE program enrollment (a provider-led shared savings model) before the purchase. Industry analysts consider the PASSE program a pre-cursor to implementing widespread managed cae in the state.

Further reading

https://www.arkansasonline.com/news/2019/sep/15/deal-sets-up-insurer-for-stakes-in-2-ma/

BCBS NC and Cambia merger on hold as CEO arrested for DUI

As of late September, the $16B deal is on hold after BCBS-NC disclosed a DUI arrest that occurred earlier in the summer (for CEO Patrick Conway).

https://www.wsj.com/articles/cambia-blue-cross-of-north-carolina-put-proposed-merger-on-hold-11569356842

Health Alliance Plan completes purchase of Trusted Health Plan (Michigan)

While the THP footprint is small (9,000 members) deal gives HAP a path back into the Detroit market after losing its position years ago.

Further reading

https://www.prnewswire.com/news-releases/health-alliance-plan-acquisition-of-trusted-hp--michigan-approved-300921812.html

Priority Health acquires Total Health

The 2 Michigan MCOs will combine pending approval. Priority Health will gain about 50,000 Medicaid lives in the deal, and will also make a payment of $25M to a local foundation focused on social determinants in Detroit.

Further reading

https://www.modernhealthcare.com/mergers-acquisitions/priority-health-total-health-care-merge-southeast-michigan

https://www.modernhealthcare.com/mergers-acquisitions/priority-health-total-health-care-merge-southeast-michigan

Updates on Evolent purchase of Passport

The KY deal got AG approval in late July. News articles post-approval made it clear that the plan was struggling and required the $70M cash infusion from Evolent to credibly rebid its MCO contract (currently valued at $2B top line capitation revenues; $40M profit @ 2%).

Further reading

https://www.wdrb.com/in-depth/beshear-approves-million-sale-of-passport-health-plan-to-for/article_8481785a-b22a-11e9-818c-0b27923bb6a2.html

https://insiderlouisville.com/economy/evolent-loaned-passport-40m-ahead-of-kentucky-medicaid-contract-application/

https://www.bizjournals.com/louisville/news/2019/09/09/passport-bewildered-lawmakers-by-not-appearing-at.html

Care Oregon to be acquired by Providence Health

Providence Health announced it will buy Care Oregon late August. The companies are predicting approval by January 2020.

Further reading

https://stateofreform.com/uncategorized/2019/08/providence-plan-partners-and-careoregon-sign-letter-of-intent-to-affiliate-and-serve-medicaid-and-medicare-beneficiaries/

Optima Health (Sentara) buys Virginia Premier

The combined plan will have 800,000 members. Sentara will be 80% owner of the new entity.

Further reading

http://www.virginiabusiness.com/news/article/optima-health-to-take-majority-stake-in-virginia-premier

Harvard Pilgrim Health Care and Tufts Health Plan merging

The combination will make a huge 2.4M member-strong plan across 6 New England States. Approvals pending.

Further reading

https://www.bostonglobe.com/business/2019/08/14/tufts-health-plan-harvard-pilgrim-health-care-are-combining/zcRLbf9qgVZxF2PGLZSNyL/story.html

WellCare/Centene deal updates

Anthem will pick up 2 new Medicaid plans (MO and NE) that got bumped out in the negotiations made with regulators overseeing the WellCare/Centene deal.  At last count 17 states had approved the deal, with 10 more to go. Providers in GA were particularly vocal in their opposition. AZ opened a public comment process on the merger late August (the 2 entities serve nearly 400,000 members in AZ Medicaid today). Both companies are still predicting approval by Q2 2020.

Further reading

https://investors.centene.com/news-releases/news-release-details/centene-and-wellcare-announce-agreement-between-wellcare-and

https://seekingalpha.com/news/3501958-wellcare-divest-missouri-nebraska-medicaid-plans

https://www.azahcccs.gov/Resources/OversightOfHealthPlans/Centene-WellCare.html

https://www.thecentersquare.com/georgia-physicians-and-pharmacists-oppose-medicaid-manager-care-merge/article_4a900de8-d3ed-11e9-9100-f3a2d1a3e957.html

https://investors.centene.com/news-releases/news-release-details/centene-and-wellcare-announce-state-insurance-department

Centene plan takes over AZ prison contract

Centene has been makings strategic inroads into prison health services. Centurion (a Centene subsidiary in AZ) started a new contract for 10 prisons in July.

Further reading

https://www.abc15.com/news/state/new-arizona-prison-health-care-provider-promises-improvements

https://www.azcentral.com/story/news/local/arizona/2019/07/10/new-arizona-prison-health-care-provider-centurion-has-history-problems-corizon/1622620001/

Aflac to acquire Argus (a dental and vision insurance company) for $75M

The company known for property and life insurance appears to be testing the waters of health insurance with a recent acquisition of Argus Holdings. While Aflac already sells dental and vision insurance, these lines of business are not core to their brand. The Argus buy is targeted to allow expansion into various new channels, including Medicaid, Medicare and the Marketplace.

Further reading

https://health.wusf.usf.edu/post/aflac-buys-tampa-insurer-argus-holdings#stream/0

Oscar (Google) and Montefiore Health System to offer Medicare Advantage Plan in 2020

Google continues to invest in figuring out the health insurance market. Oscar will co-brand and MA plan with Montefiore next year. The deal will add 10 hospitals and 200 OP sites in New York to Oscar’s latest attempts to break into the space. In related new, Oscar is also launching an MA plan in Houston.

Further reading

https://www.hioscar.com/press/oscar-enters-ny-medicare-advantage-market

NY-Healthfirst and Landmark partner to deliver in home care for Medicare members

Nearly 8,000 MA members in NY will start getting direct care in their home as part of a new deal between Healthfirst and Landmark Health. The care model includes in home visits from dieticians, nurses, pharmacists and social workers.

https://www.landmarkhealth.org/healthfirst-medical-care-coordination/

LA Care Plan and BCBS of CA (Promise Health Plan) invest $73M in community resource center partnership

The 2 MCOs will operate 14 community resource centers in LA county. The project is currently slated for 5 years.

Further reading

https://www.modernhealthcare.com/insurance/la-care-health-plan-blue-shield-promise-invest-146-million-community-centers



Hospitals, health systems and provider groups

LHC Group makes multiple home care purchases 

LHC Group purchased 2 SSM Health agencies in Missouri (August). They also announced a partnership in AL to share ownership, and bought 2 locations in Ohio. In September they announced they will buy VNA Home Health of Maryland.

Further reading

https://lhcgroup.com/newsroom/lhc-group-announces-agreement-to-purchase-assets-from-vna-home-health-of-maryland/

KY- MENTOR enters KY Adult Day Health Market with acquisition

MENTOR bought Just Family Services to enter the connect market with 800 members. MENTOR is now in 5 states and serves about 5,000 seniors.

Further reading

https://www.businesswire.com/news/home/20190722005651/en/MENTOR-Network-Announces-Acquisition-Adult-Day-Health

TX- HCA completes purchase of 24 TX urgent care centers

HCA is adding significant square footage to its Austin, Dall and Houston footprint. Fresenius sold 24 urgent care centers. HCA will rebrand them as CareNow Urgent Care and the new entity will be the largest urgent care network in the US.

Further reading

https://investor.hcahealthcare.com/press-release/hca-healthcare-completes-purchase-24-medspring-urgent-care-centers-texas

Sanford Health and UnityPoint Health merge to make 76-hospital system  

The combined entity would be an $11B health system spread out over 26 states. The companies remain optimistic that regulatory approvals will go through by the end of this year.

Further reading

https://www.modernhealthcare.com/mergers-acquisitions/sanford-health-and-unitypoint-health-sign-letter-intent-merge

Two major acquisitions related to ABA therapy

Blue Sprig Pediatrics bought Thrive Autism Solutions (July; current markets – AR and MO). The Stepping Stones Group bought New England ABA (Sept).

Further reading

https://www.prnewswire.com/news-releases/blue-sprig-pediatrics-announces-acquisition-of-thrive-autism-solutions-300883568.html

https://www.prnewswire.com/news-releases/the-stepping-stones-group-acquires-new-england-aba-inc-300923614.html

Providence St Joes enters EHR consulting market (Rhode Island)

Providence St Joseph Health in RI will buy an Epic consulting firm called Bluetree Network. Bluetree currently has 140 hospital clients. The purchase will allow the non-profit Providence St Joes to offer various services to providers through its for-profit consulting subsidiary. This strategy follows on from their February launch of a for-profit population health management company.

Further reading

https://www.modernhealthcare.com/mergers-acquisitions/providence-st-joseph-health-acquire-epic-consulting-firm



Investment News

Navigant Consulting bought by Guidehouse

Veritas Capital asset Guidehouse bought Navigant Consulting for $1.1B in early August. Navigant was publicly traded as NCI, and shareholders received $28 per share in cash (a 26% premium on the 90 day average). Guidehouse views the buy as the next step in their path towards establishing a global consultancy. Guidehouse currently has 2,000 employees.

Further reading

https://www.businesswire.com/news/home/20190802005207/en/Veritas-Capital-backed-Guidehouse-Acquire-Navigant-Consulting-1.1


Addus HomeCare continues acquisition efforts

Addus announced intentions to make large acquisitions in early August. The first acquisition came late August with the purchase of Hospice Partners of America for $130M. The deal adds 1,000 patients and $55M in annual revenue to the Addus footprint.

Further reading

https://addus.gcs-web.com/news-releases/news-release-details/addus-homecare-completes-purchase-hospice-partners-america

https://addus.gcs-web.com/news-releases/news-release-details/addus-homecare-completes-purchase-hospice-partners-america

https://addus.gcs-web.com/news-releases/news-release-details/addus-homecare-signs-definitive-agreement-purchase-hospice

https://homehealthcarenews.com/2019/08/addus-eyes-strategic-acquisitions-ahead-of-medicare-advantage-expansion/

https://www.prnewswire.com/news-releases/addus-homecare-announces-second-quarter-2019-financial-results-and-completion-of-two-acquisitions-300896518.html

Opioid treatment provider BayMark Health for sale by Webster Capital

BayMark was formed with the combination of 2 other Webster buys (BAART Programs and Medmark Services) Bids began mid October. The latest valuation was $1B.

Further reading

https://www.pehub.com/buyouts/websters-baymark-opioid-treatment-giant-launches-sales-process/

Florida- ClareMedica raises funding

Physician network ClareMedica already works with MA and Medicaid plans with its 70-provider network.

Beecken Petty O’Keefe and Company raised an undisclosed amount for the investment. The PE firm has 4 funds with an average of $1.3B per fund.

Further reading

https://www.globenewswire.com/news-release/2019/07/01/1876772/0/en/ClareMedica-Health-Partners-and-Beecken-Petty-O-Keefe-Company-Form-Partnership-With-Equity-Investment.html

Magellan continues to court private equity

Magellan engaged in talks with PE firm Centerbridge in June. Magellan’s current market cap ($1.6B) makes it a large investment for many firms, and there may need to be divestment of key components early on. Analysts were predicting an investment announcement in July or August, but none was made at the time of writing.

Further reading

https://www.wsj.com/articles/centerbridge-in-exclusive-talks-to-buy-magellan-health-11561578626

Norwest Venture invests in ABA provider

Norwest Venture invested an undisclosed amount in ABA provider Gateway Learning Group. Gateway currently has a 17-county footprint in CA. Norwest has current holdings of $7.5B.

Further reading

https://www.businesswire.com/news/home/20190710005894/en/Norwest-Venture-Partners-Invests-Gateway-Learning-Group

Tenet to divest Conifer solutions

After years developing Conifer as a hospital solutions provider, health system giant Tenet announced plans to divest it in July. The current strategy is to take Conifer public by mid-20201.

Further reading

https://www.modernhealthcare.com/finance/tenet-plans-spin-revenue-cycle-subsidiary-conifer

Sandata Technologies raises significant investment with Accel-KKR

EVV vendor Sandata Technologies worked with investment from Accel-KKR to raise “significant” growth investment in July. Accel-KKR has current holdings of $7.5B

Further reading

https://www.accel-kkr.com/sandata-secures-significant-growth-equity-investment-accel-kkr/

SA treatment provider Averhealth raising investment with Fiver Arrows Capital Partners

Averhealth (a substance abuse treatment monitoring provider) announced an engagement with Five Arrows Capital in July. Averhealth is currently in 26 states and works with 1,800 courts. Five Arrows has current holdings of $12B.

Further reading

https://www.prnewswire.com/news-releases/averhealth-enters-strategic-partnership-with-five-arrows-capital-partners-300890755.html

Compassus (Hospice) sold to Ascension Health in Towerbrook Capital Deal

Compassus was bought for $1B in a deal managed by Towerbrook Capital and Ascension Health. Each buyer will be equal owner. The current Compassus footprint spans 30 states and 125 locations.

Further reading

https://hospicenews.com/2019/10/01/towerbrook-ascension-health-to-acquire-compassus-for-1-billion%EF%BB%BF/

RHA Health services (behavioral health provider) sold to Blue Wolf Capital

Formation Capital and Safanad Limited announced the sale of RHA in early August. RHA provides services for 25,000 I/DD and SA members. Blue Wolf Capital made the purchase.

Further reading

https://www.prnewswire.com/ae/news-releases/formation-and-safanad-sell-rha-health-services-to-blue-wolf-878660882.html

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