Category: M&A- Plan

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Healthplex Acquired by Affiliates of MCNA Dental


Healthplex Acquired by Affiliates of MCNA Dental (highlighted)

PR NewswireSeptember 17, 2019
UNIONDALE, N.Y., Sept. 17, 2019 /PRNewswire/ — Healthplex, Inc., announced today that, following the receipt of all required regulatory approvals, the company has been acquired by affiliates of MCNA Dental, the largest full-risk Medicaid and Children’s Health Insurance Program dental benefits manager in the country. These combined affiliate companies will serve over 8 million members nationwide.
“The addition of Healthplex to our family of companies allows us to take the next step in our strategy for growth, complementing our national platform and expanding our commercial dental insurance products and other offerings. Healthplex shares in our mission of promoting accessible dental care for all. Our entire organization is enthusiastic about this opportunity to further transform oral health care in our communities by delivering enhanced value for the members, providers, Managed Care Organizations, and state partners we serve,” said Glen Feingold, Chief Operating Officer for MCNA Dental.
MCNA Dental has a proven 27-year track record of facilitating high quality, cost effective oral healthcare services. MCNA serves beneficiaries in Texas, Louisiana, Florida, Iowa, Idaho, Arkansas, Nebraska, and Utah all through direct contracts with the state Medicaid agencies in each state. It was the first dental plan in the nation to receive full URAC Dental Plan Accreditation and has maintained NCQA accreditation in credentialing since 2011.
Founded in 1977 by Dr. Martin Kane and Dr. Stephen Cuchel, Healthplex is a New York-based dental insurance and management company with extensive experience in both government-funded and commercial dental programs. Healthplex has provided best-in-class dental services to government-funded programs through contracts with Managed Care Organizations (MCOs) since 1995. The company currently administers dental benefits for the programs of 33 MCO clients to include Medicaid, Child Health Plus, Medicare, MLTC, FIDA, Essential, and HARP plans. Healthplex also underwrites and administers dental plans for 225 prominent labor unions and municipalities, and 3,000 commercial businesses. The company currently serves 2.4 million members in New York State.
“The Healthplex team is looking forward to combining our regional expertise with MCNA’s national presence while implementing proven best practices, making both companies stronger. I am personally excited to have the opportunity to continue to build upon Healthplex’s 40-year story of growth with a company so closely aligned with our vision and our commitment to service in our community. Healthplex already manages the highest rated dental plans in our markets, and having the energy and enthusiasm of the Feingold family behind us will make Healthplex that much more formidable as a competitor in our existing and expansion markets,” said Christopher Schmidt, President and CEO of Healthplex.
DLA Piper LLP (US) and Windels Marx Lane & Mittendorf LLP served as legal adviser to the selling shareholders of Healthplex, Inc., throughout the acquisition process. Akerman LLP and Greenberg Traurig LLP of New York served as legal advisers to the purchasers and MCNA Dental.
Healthplex, New York’s only dental plan founded by dentists, has over 40 years of experience in  administering and insuring dental benefits, specializing in the design of cost-effective dental programs for Medicaid, Child Health Plus (CHP), Medicare, Health Exchanges, Corporations, Unions, Municipalities, Small Business, FIDA, HARP, MLTC, and Essential Plans. The company serves over 2.4 million members, and maintains the largest, most comprehensive dental provider network in New York State. Healthplex is certified by NCQA as a Credentials Verification Organization (CVO). The company is also accredited by NCQA in Utilization Management. Healthplex is committed to providing access to high quality affordable dental care and to improving the oral health of our community.
Contact: Valerie Vignola
Healthplex, Inc.
Phone: 516-542-2264
333 Earle Ovington Blvd., Suite 300
Uniondale, NY 11553
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Feds reviewing Cuomo’s Fidelis deal : Empire Center for Public Policy

Feds reviewing Cuomo’s Fidelis deal (Highlighted)

by Bill Hammond |  October 03, 2019 | NY Torch
Federal officials are reviewing the state’s expropriation of $2 billion from the sale of Fidelis Care health plan, potentially throwing a wrench into the Cuomo administration’s plans for using the money.
An Aug. 21 letter from the Centers for Medicare & Medicaid Services, recently posted on the state Health Department’s website, says the Fidelis transaction is being examined “pursuant to Section 1903(w) of the Social Security Act.”
That section of law is meant to discourage states from using certain tactics to raise revenue for their Medicaid programs. Depending on the outcome of the CMS review, the state could ultimately lose a share of its federal matching aid – which would add to the Medicaid program’s burgeoning budget crunch.
The feds’ review adds a new wrinkle to a deal engineered by Cuomo last year, which was the focus of a front-page expose in today’s New York Times.
Founded as a Catholic-affiliated non-profit health plan, Fidelis agreed in September 2017 to be bought out by for-profit Centene Corp. for a price of $3.75 billion. The state’s Catholic bishops intended to put the proceeds into a charitable foundation, but Governor Cuomo insisted that the money should go to state government instead – on grounds that most of Fidelis’ business had come from government-funded programs such as Medicaid, Child Health Plus and the Essential Plan.
Under pressure from Cuomo, the bishops and Centene agreed to pay the state $2 billion over four years. Cuomo and Legislature placed the money into a newly established “Health Care Transformation Fund,” which the governor could spend at his discretion on a broad range of health-related purposes.
The first use of the funds came in October 2018, which the Health Department announced Medicaid rate increases of 2 percent for hospitals and 1.5 percent for nursing homes – a major victory for influential interest groups that included one of the governor’s biggest campaign donors.
In the Aug. 21 letter, CMS gave approval for the nursing home rate increase but added a note of caution about the revenue source:
During our review of the proposed state plan changes, CMS became aware that the State of New York received considerable revenues related to [the] sale of assets between Fidelis Care (a non-profit insurer associated with Catholic Diocese of New York) and Centene Corporation (a for profit health insurer). Our review of these revenues is still ongoing pursuant section 1903(w) of the Act.
Section 1903(w) restricts the ability of states to finance Medicaid with revenue from health-care sources. The concern is that states will allocate a certain amount of money for Medicaid, use that expenditure to draw federal matching funds, then grab back all or most of their initial expenditure through taxes or “donations” paid by the health-care industry. If the quasi-voluntary payments by Fidelis and Centene are determined to violate this rule, the federal government is supposed to reduce the state’s allocation of federal Medicaid funding by the amount of the improper payments.
The outcome of CMS’s review is hard to predict. What’s clear is that an adverse decision would open a new hole in state finances.
For example: The state has projected that its share of the rate increases for hospitals and nursing homes would be $500 million over four years – but that assumed a roughly dollar-for-dollar match from Washington. If CMS rejects the use of Fidelis funds, and reduces aid accordingly, the state would need to put up another $500 million of its own.
Even without this complication, the Cuomo administration has been struggling to balance Medicaid’s finances. The program ran so far over budget that the state delayed $1.7 billion in payments from March to April, shifting the expense from fiscal year 2019 to fiscal year 2020. Budget reports since then have warned that Medicaid spending continues to exceed expectations, and that the state might have to make program cuts or delay further payments in the future.

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Humana to Acquire Enclara Healthcare (Highlighted and Summarized)

Humana to Acquire Enclara Healthcare

Monday, December 16, 2019 6:30 am EST
“We look forward to leveraging and expanding the capabilities of Enclara to further advance our clinical management expertise.”
LOUISVILLE, Ky. & PHILADELPHIA–(BUSINESS WIRE)–Humana Inc. (NYSE: HUM) today announced it has signed a definitive agreement to acquire privately held Enclara Healthcare (Enclara), one of the nation’s largest hospice pharmacy and benefit management providers, from Consonance Capital Partners and Enclara management. Enclara is a leading pharmacy solutions provider focused on simplifying care delivery in complex care populations to improve patient experience, quality and cost.
The Enclara acquisition provides Humana with the opportunity to extend its comprehensive care continuum strategy to cover the pharmacy-related needs associated with hospice care, simplify the mail order pharmacy experience, and advance its technology stack for in-home pharmacy through areas such as enhanced mobile medication management and improved electronic medical record (EMR) connectivity.
“Enclara represents a logical extension of Humana Pharmacy’s strategy given the company’s unique ability to play a role in advanced illness care and supplement our existing care delivery system,” said Scott Greenwell, PharmD, President, Humana Pharmacy Solutions. “We look forward to leveraging and expanding the capabilities of Enclara to further advance our clinical management expertise.”
Enclara has cultivated trusted relationships with its customers, serving over 450 hospice providers and 97,000 hospice patients per day through multiple, scalable models designed to fit unique customer needs.
“I am excited about the opportunity to work closely with Humana to carry on Enclara’s mission of serving as an invaluable resource to hospice providers,” said Andrew Horowitz, Founder and Chief Executive Officer, Enclara Healthcare. “This combination will allow Enclara to accelerate innovation aimed at delivering timely and cost effective pharmacy solutions.”
The Enclara transaction, which includes acquisition of Enclara Pharmacia, GuidantRx and Avanti Health Care Services, is anticipated to close during the first half of 2020 and is subject to customary state and federal regulatory approvals as well as other customary closing conditions. Financial terms of the transaction were not disclosed. The transaction is expected to have an immaterial impact to earnings in 2020.
Centerview Partners LLC is acting as financial advisor to Humana. Crowell & Moring LLP is acting as legal advisor to Humana. Evercore Inc. is acting as financial advisor to Enclara and Consonance Capital Partners. Latham & Watkins LLP is acting as legal advisor to Enclara and Consonance Capital Partners.
Cautionary Statement
This news release includes forward-looking statements regarding Humana within the meaning of the Private Securities Litigation Reform Act of 1995. When used in investor presentations, press releases, Securities and Exchange Commission (SEC) filings, and in oral statements made by or with the approval of one of Humana’s executive officers, the words or phrases like “expects,” “believes,” “anticipates,” “intends,” “likely will result,” “estimates,” “projects” or variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, among other things, information set forth in the “Risk Factors” section of the company’s SEC filings, a summary of which includes but is not limited to the following:
  • If Humana does not design and price its products properly and competitively, if the premiums Humana receives are insufficient to cover the cost of healthcare services delivered to its members, if the company is unable to implement clinical initiatives to provide a better healthcare experience for its members, lower costs and appropriately document the risk profile of its members, or if its estimates of benefits expense are inadequate, Humana’s profitability could be materially adversely affected. Humana estimates the costs of its benefit expense payments, and designs and prices its products accordingly, using actuarial methods and assumptions based upon, among other relevant factors, claim payment patterns, medical cost inflation, and historical developments such as claim inventory levels and claim receipt patterns. The company continually reviews estimates of future payments relating to benefit expenses for services incurred in the current and prior periods and makes necessary adjustments to its reserves, including premium deficiency reserves, where appropriate. These estimates, however, involve extensive judgment, and have considerable inherent variability because they are extremely sensitive to changes in claim payment patterns and medical cost trends, so any reserves the company may establish, including premium deficiency reserves, may be insufficient.
  • If Humana fails to effectively implement its operational and strategic initiatives, particularly its Medicare initiatives and state-based contract strategy, the company’s business may be materially adversely affected, which is of particular importance given the concentration of the company’s revenues in these products. In addition, there can be no assurances that the company will be successful in maintaining or improving its Star ratings in future years.
  • If Humana fails to properly maintain the integrity of its data, to strategically implement new information systems, to protect Humana’s proprietary rights to its systems, or to defend against cyber-security attacks, the company’s business may be materially adversely affected.
  • Humana is involved in various legal actions, or disputes that could lead to legal actions (such as, among other things, provider contract disputes and qui tam litigation brought by individuals on behalf of the government), governmental and internal investigations, and routine internal review of business processes any of which, if resolved unfavorably to the company, could result in substantial monetary damages or changes in its business practices. Increased litigation and negative publicity could also increase the company’s cost of doing business.
  • As a government contractor, Humana is exposed to risks that may materially adversely affect its business or its willingness or ability to participate in government healthcare programs including, among other things, loss of material government contracts, governmental audits and investigations, potential inadequacy of government determined payment rates, potential restrictions on profitability, including by comparison of profitability of the company’s Medicare Advantage business to non-Medicare Advantage business, or other changes in the governmental programs in which Humana participates. Changes to the risk-adjustment model utilized by CMS to adjust premiums paid to Medicare Advantage, or MA, plans according to the health status of covered members, including proposed changes to the methodology used by CMS for risk adjustment data validation audits that fail to address adequately the statutory requirement of actuarial equivalence, if implemented, could have a material adverse effect on our operating results, financial position and cash flows.
  • The Healthcare Reform Law, including The Patient Protection and Affordable Care Act and The Healthcare and Education Reconciliation Act of 2010, could have a material adverse effect on Humana’s results of operations, including restricting revenue, enrollment and premium growth in certain products and market segments, restricting the company’s ability to expand into new markets, increasing the company’s medical and operating costs by, among other things, requiring a minimum benefit ratio on insured products, lowering the company’s Medicare payment rates and increasing the company’s expenses associated with a non-deductible health insurance industry fee and other assessments; the company’s financial position, including the company’s ability to maintain the value of its goodwill; and the company’s cash flows. Additionally, potential legislative or judicial changes, including activities to invalidate, repeal or replace, in whole or in part, the Health Care Reform Law, creates uncertainty for Humana’s business, and when, or in what form, such legislative or judicial changes may occur cannot be predicted with certainty.
  • Humana’s business activities are subject to substantial government regulation. New laws or regulations, or changes in existing laws or regulations or their manner of application could increase the company’s cost of doing business and may adversely affect the company’s business, profitability and cash flows.
  • Humana’s failure to manage acquisitions, divestitures and other significant transactions successfully may have a material adverse effect on the company’s results of operations, financial position, and cash flows.
  • If Humana fails to develop and maintain satisfactory relationships with the providers of care to its members, the company’s business may be adversely affected.
  • Humana’s pharmacy business is highly competitive and subjects it to regulations in addition to those the company faces with its core health benefits businesses.
  • Changes in the prescription drug industry pricing benchmarks may adversely affect Humana’s financial performance.
  • If Humana does not continue to earn and retain purchase discounts and volume rebates from pharmaceutical manufacturers at current levels, Humana’s gross margins may decline.
  • Humana’s ability to obtain funds from certain of its licensed subsidiaries is restricted by state insurance regulations.
  • Downgrades in Humana’s debt ratings, should they occur, may adversely affect its business, results of operations, and financial condition.
  • The securities and credit markets may experience volatility and disruption, which may adversely affect Humana’s business.
In making forward-looking statements, Humana is not undertaking to address or update them in future filings or communications regarding its business or results. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed herein may or may not occur. There also may be other risks that the company is unable to predict at this time. Any of these risks and uncertainties may cause actual results to differ materially from the results discussed in the forward-looking statements.
Humana advises investors to read the following documents as filed by the company with the SEC for further discussion both of the risks it faces and its historical performance:
  • Form 10-K for the year ended December 31, 2018;
  • Form 10-Q for the quarters ended March 31, 2019; June 30, 2019; September 30, 2019 and
  • Form 8-Ks filed during 2019.
About Humana
Humana Inc. (NYSE: HUM) is committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well-being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large.
To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools – such as in-home care, behavioral health, pharmacy services, data analytics and wellness solutions – combine to produce a simplified experience that makes health care easier to navigate and more effective.
More information regarding Humana is available to investors via the Investor Relations page of the company’s website at humana.com, including copies of:
  • Annual reports to stockholders
  • Securities and Exchange Commission filings
  • Most recent investor conference presentations
  • Quarterly earnings news releases and conference calls
  • Calendar of events
  • Corporate Governance information
About Enclara Healthcare
Enclara Healthcare is a leading solutions provider focused on simplifying care delivery in chronic and complex care patient populations to improve patient experience, quality, and cost. We collaborate with healthcare organizations to drive value-based care through expertise, process, and technology. To learn more about our services visit enclarahealthcare.com.
About Consonance Capital Partners
Consonance Capital Partners invests in private companies in the lower middle market of the U.S. healthcare industry with an emphasis on businesses driving efficiency, cost containment and high quality clinical care to patients. Consonance Capital Partners participates in growth equity, leveraged buyout, and recapitalization transactions. For more information, visit www.consonancecapital.com.
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Humana to Acquire Enclara; Honor Expands in California – Home Health Care News (Highlighted and Summarized)
Summary: Humana bought Enclara which includes Enclara Pharmacy, GuidantRx, and Avanti Health Care Services and it is projected to close within the first 6 months of 2020; At your service home care joins Honor and will receive access to many things to increase business while Honor gains revenue; HealthPartners cut jobs but doesn’t expect to lay off anyone else this year; M&M Home Care acquires Hearts & Hands to expand reach.
 
By Andrew Donlan | December 17, 2019 December 18, 2019

Humana to acquire Enclara

Consonance Capital Partners, a health care investment firm, has agreed to sell Enclara Healthcare to Humana Inc. (NYSE: HUM).
The transaction includes the privately held pharmacy company’s subsidiaries Enclara Pharmacia, GuidantRx and Avanti Health Care Services. The deal is expected to close during the first six months of 2020.
For Louisville, Kentucky-based Humana, the acquisition gives the company the opportunity to harness Enclara’s current capabilities to supplement Humana’s existing care delivery system. Broadly, Enclara is a logical extension of the health insurer’s overarching strategy, according to Humana Senior Vice President Scott Greenwell.
Consonance first invested in Enclara in 2014. After that, it worked with the management team as Enclara made acquisitions of its own over the years.
The hospice pharmacy and benefit manager company Consonance serves over 450 hospice providers and 97,000 hospice patients per day. Humana indicated that the purchase would have little impact on 2020 earnings.
Since 2018, Humana has been expanding its operations to include ownership of various components of the health care continuum. Last year, the company acquired the large hospice and home health care providers Kindred at Home for $4.1 billion, then Curo Health Services for $1.4 billion.
Private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe partnered with Humuna on the Kindred transaction.

At Your Service Home Care joins Honor

The San Francisco-based Honor is expanding. Dr. Lucy Andrews, the CEO of At Your Service Home Care, it now joining the Honor Care Network.
The news marks the second Honor expansion in the final months of 2019.
Andrews currently serves as the chair of the California Association for Health Services at Home.
By joining the Honor Care Network, Santa Rosa, California-based At Your Service Home Care will gain access to a shared pool of caregivers, management technology and an operations support team from Honor. In turn, Honor will receive an undisclosed share of the agency’s revenue.
“As a home care agency owner for nearly 20 years, I have personally experienced the evolution of our industry with increased regulations, new legislation and the continued workforce shortage,” Andrews said in a release. “This is the ‘new normal,’ which is putting increased pressure on agency owners struggling to keep up with the growing demand for elder care in their communities.”
In other recent Honor news, CNBC reported on Dec. 5 that SoftBank’s Vision Fund 2 was considering a $150 million investment in Honor, which has already raised roughly $115 million since it launched in 2014.

HealthPartners cuts jobs in Minnesota

HealthPartners is shutting down a home care service in St. Paul, Minnesota and 70 people are expected to lose their jobs, according to a report from the StarTribune.
The Bloomington, Minnesota-based health insurer and care system had cut jobs twice in the past two months before the St. Paul location took a hit. The communications manager said that the company does not expect to lay off anyone else this year.
The union that represents many of the workers laid off expressed dismay with the company’s decision, saying it was “an example of a health system putting their profit margin before people.”
The move could have been made to curb financial issues in the coming year, when the company expects there will be less federal reimbursements. HealthPartners had about $7 billion in revenue last year and employs close to 26,000 people.

M & M Home Care Expands in Michigan

M & M Home Care Inc. has acquired Hearts & Hands Home Health Care in order to expand its reach in southeastern Michigan.
The deal will allow the Livonia, Michigan-based company to serve six additional counties in the state and further its footing in the home care space. Hearts and Hands Home Health Care is a private duty company that offers a variety of services, from elder to special needs care.
*Editor’s note (Dec. 18, 2019): This story was updated to correct a factual error in an earlier version saying SoftBank invested $150 million in Honor. SoftBank has not confirmed investing in Honor; CNBC reported Dec. 5 that that group was considering such an investment.
HHCN also updated the language of the story to better reflect At Your Service Home Care’s relationship to Honor and the Honor Care Network.
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