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New Hampshire regulators block Partners acquisition over antitrust concerns – Boston Business Journal

MM 1 Sentence Summary- NH attorney general blocks Massachusetts Gen Hospital from acquiring Partners saying it will violate state antitrust laws 

New Hampshire regulators block Partners acquisition over antitrust concerns

Sep 20, 2019, 1:07pm EDT
Partners HealthCare’s plan to further its expansion into New Hampshire ran into a roadblock on Friday, with the Granite State’s attorney general, Gordon MacDonald, saying the acquisition would violate state antitrust laws.
In May 2018, Partners’ flagship Massachusetts General Hospital announced that it planned to acquire Exeter Health Resources in New Hampshire. Plans called for Exeter to merge with Wentworth-Douglass Hospital, which MGH acquired in 2017, forming a new non-profit system for New Hampshire’s Seacoast region.
While the attorney general’s charitable trusts unit has been reviewing the transaction since the hospitals submitted materials in May 2019, the attorney general’s consumer protection and antitrust bureau has been conducting a private review of the transactions for over a year.
Last week, the antitrust division issued a notice of intent to halt the transaction over concerns of antitrust violations. The charitable trusts unit subsequently issued a report Friday objecting to the proposed transaction, noting that if the hospitals resolve concerns with the antitrust division, it can refile its submission to charitable trusts.
“Our most important duty is to protect the public and we will not hesitate to use the enforcement tools available to us to do so,” MacDonald said in a statement. “New Hampshire patients already pay some of the highest prices for health care in the country. Based on our investigation, we have concluded that this transaction implicates our laws protecting free and fair competition and therefore threatens even higher health care costs to be borne by New Hampshire consumers.”
In a release, hospital officials said they expect to continue conversations with the attorney general on the benefits of the transaction to ultimately resolve the concerns.
“We are optimistic that the parties can continue to have an open dialogue with the regulators or government officials about this important affiliation,” said Dr. Peter Slavin, MGH’s president. “We remain fully committed to seeing this transaction through and are confident that the Attorney General’s Office will ultimately determine that our affiliation will pass antitrust review based on the thorough review that the expert economists have completed on this proposal. We look forward to continuing to enhance quality healthcare in the Seacoast Region.”
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Blue Cross puts merger on hold amid video showing CEO sideswiping tractor trailer on I-85

MM 1 Sentence Summary- BCBS and Cambia Health’s merge has been delayed because of CEO Conway’s legal trouble 

Blue Cross puts merger on hold amid video showing CEO sideswiping tractor trailer on I-85

September 24, 2019 12:57 PM
Video appears to show BCBS CEO driving erratically, hitting tractor-trailer on I-85
A video provided to The News & Observer appears to show an SUV driven by Patrick Conway, president and CEO of Blue Cross and Blue Shield of NC, weaving between lanes for several miles on Interstate 85 before colliding with a tractor-trailer. By Submitted Video
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North Carolina’s largest health insurer on Tuesday suspended an ongoing merger, making the announcement the same day new details emerged about its CEO’s recent driving charges.
“Blue Cross NC has decided to put its proposed strategic affiliation with Cambia Health Solutions on temporary hold,” the company announced in an email to media shortly after 3 p.m. “Blue Cross NC is committed to focusing on its customers, employees and the North Carolina communities it serves.”
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Blue Cross and Blue Shield of North Carolina and Cambia, an Oregon-based company, announced their intentions to form a partnership in March. The two companies would together cover around 6 million people and have about $16 billion in combined revenue, the News & Observer previously reported.

Blue Cross is bigger than Cambia, reporting $9.9 billion in revenue last year and covering 3.7 million people. Cambia had revenue of about $6 billion on coverage of around 2.6 million people.
Blue Cross announced the merger being put on hold on the same day that new details emerged about Dr. Patrick Conway, its president and CEO. A video provided to The News & Observer Tuesday appears to show Conway weaving between lanes for several miles on Interstate 85 before sideswiping a tractor-trailer.
Conway, 45, was charged with driving while impaired and misdemeanor child abuse after the June 22 accident. His two daughters were in the car, according to police.

Video of Conway’s car

The video, shot by a motorist on I-85 and sent to police, shows an SUV that appears to match the 2017 Cadillac listed on the report from Archdale police.
An affidavit from the Archdale officer said Conway smelled of alcohol, had bloodshot eyes and slurred speech and was unsteady on his feet. He refused a blood-alcohol test and had his license revoked for 30 days, according to court records.
According to a confidential police report obtained by WRAL, Conway denied wrongdoing and later became “belligerent” at the police station.
The report quotes Conway saying: “’You had a choice. You could have let me go. You don’t know who I am. I am a doctor, a CO of a company. I’ll call Governor Cooper and get you in trouble,’“ WRAL reported.
Cooper “was not involved in this incident in any way,” spokesman Ford Porter told The N&O.
Blue Cross didn’t comment on Tuesday’s reports. Conway’s attorney, Thomas Walker, released a statement to the N&O saying the CEO is “deeply ashamed and embarrassed” about the pain he caused family and co-workers.
“He knows his conduct was unacceptable and not consistent with who he is as a person. He has never had an incident like this before,” Walker said.
“To his credit, he immediately disclosed the incident to the Blue Cross NC Board. He stepped down from his daily duties and voluntarily and successfully completed 30 days of inpatient substance use treatment. He’s committed to continuing to handle this appropriately going forward and will do so.”

Blue Cross response

Last week, state Insurance Commissioner Mike Causey asked for Conway to be replaced by an interim president while his charges are resolved, calling them “alarming.”
He also chided the Blue Cross board for appearing to hide the arrest, saying he expected the insurer’s executive team to be more “accountable, responsible and transparent.”
Conway earned $3.59 million last year, WRAL reported.
In response, board Chairman Frank Holding Jr. said Conway had undergone a professional substance abuse assessment and attended a 30-day inpatient treatment.
“Based on detailed information shared by the facility based on Dr. Conway’s assessment and treatment, the board was satisfied Dr. Conway could continue to provide strong leadership to BlueCross NC,” Holding’s letter said.
Blue Cross “refrained” from talking publicly about Conway’s incident “out of respect for the legal process underway in Randolph County, Dr. Conway’s right to due process, and medical privacy concerns and obligations,” Holding added.

Washington commissioner’s letter

On Tuesday night, Washington’s state insurance commissioner released a letter he sent to Cambia Heath Solutions’ Board of Directors earlier that day.
In the letter, Commissioner Mike Kreidler said his office is reviewing the proposed merger of Cambia with Blue Cross. Cambia was formerly known as The Regence Group, according to its website.
Krieidler said he learned only about Conway’s June arrest on Sept. 19, the day news reports were published about the allegations. He said he learned about the arrest after Cambia CEO Mark Ganz asked for his personal cell phone number “to communicate an urgent message that could not wait until normal business hours.”
Kreidler said Blue Cross should have notified him immediately and had a “legal obligation” to inform him within two business days of “any material changes” to Conway’s biographical affidavit.
“The fact that Dr. Conway was arrested and faces serious allegations and charges is without question a material change,” Kreidler wrote.
“I am deeply troubled by your failure to communicate responsibly and transparently,” he said in the letter to the board of directors. “Both the board and CEO share the responsibility to deal with my office in a straightforward and honest fashion. Secrets are not permissible.
“Your behavior in this matter must, and will, be taken into account as my office considers the Cambia/Regence’s request for a merger,” the letter concluded.
Staff writers Zachery Eanes and Mark Schultz contributed to this story
Paul “Andy” Specht reports on North Carolina leaders and state politics for The News & Observer and PolitiFact. Specht previously covered Raleigh City Hall and town governments around the Triangle. He’s a Raleigh native who graduated from Campbell University in Buies Creek, N.C. Contact him at as*****@**********er.com or (919) 829-4870.

Major Blue Health Insurers Drop Deal to Combine

Move comes after resignation of North Carolina insurer CEO Patrick Conway

By
Anna Wilde Mathews,
Leslie Scism and
Valerie Bauerlein
Oct. 11, 2019 8:51 pm ET
Blue Cross and Blue Shield of North Carolina and Cambia Health Solutions said they were dropping plans to combine, after the resignation of the North Carolina insurer’s chief executive.
Former Blue Cross of North Carolina CEO Patrick Conway had stepped down amid fallout over an allegedly alcohol-related traffic accident. The two insurers had said they were pausing their deal on Sept. 24, as details of the June incident emerged.
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Optima Health to take majority stake in Virginia Premier | Virginia Business

MM 1 Sentence Summary- Optima Health Plan takes majority ownership of MCO VA Premier and together they will serve 800k members. 

Optima Health to take majority stake in Virginia Premier (Highlighted)

Published September 26, 2019 by Robert Powell, III
Virginia Beach-based Optima Health Plan will become the majority owner of Richmond-based Virginia Premier, a nonprofit managed-care organization.
Virginia Premier was founded in 1995 by VCU Health System. The Richmond-based health system will retain a 20% ownership stake in Virginia Premier. Together, Optima and Virginia Premier will serve nearly 800,000 members. Optima is a subsidiary of Norfolk-based Sentara Healthcare.
“As provider-led health plans, Optima Health and Virginia Premier share similar cultures, values and a commitment to delivering innovative services that meet the unique needs of the populations we serve,” Dennis A. Matheis, president of Optima Health and executive vice president of Sentara Healthcare, said in a statement. “Together, we will be better positioned to increase access to quality care, achieve greater efficiencies and develop new services to improve our members’ overall experience.”
Optima and Virginia Premier are two of the state’s original Medicaid managed care organizations. Company officials said Virginia Premier and Optima will continue to operate as separate entities, retaining their names and brands. Virginia Premier will maintain an operations center in Richmond and a presence in other areas in the state.
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-Centene, Walgreens and RxAdvance Announce Partnership to Provide Innovative Pharmacy Management Model


Centene, Walgreens and RxAdvance Announce Partnership to Provide Innovative Pharmacy Management Model (highlighted)

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Oct 17, 2019, 07:00 ET
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ST. LOUIS and DEERFIELD, Ill., Oct. 17, 2019 /PRNewswire/ — Centene Corporation (NYSE: CNC), Walgreens and RxAdvance today announced a strategic partnership to introduce an innovative model for pharmacy management that aims to increase transparency, enhance customer experience and ultimately result in better health outcomes at lower costs. The partnership builds upon an existing Centene and Walgreens relationship, leveraging Walgreens trusted retail pharmacy expertise and Centene’s national leadership in providing comprehensive health care services to the underserved, while also utilizing RxAdvance’s innovative pharmacy benefit management model powered by its Collaborative PBM Cloud platform.
There is a growing need for new approaches to pharmacy benefit management, particularly to serve the Medicaid population. This partnership addresses the need for leading companies to collaborate on a better model, and one which provides higher quality care and lower pricing for drugs.
“Centene is committed to supporting a transparent pharmacy benefit management model that is sustainable with higher quality care for members at a lower cost to our customers,” said Michael F. Neidorff, chairman, president and CEO, Centene. “This new approach to pharmacy management will improve the transparency and quality of care, while reducing unnecessary medical costs for millions of people.”
Using RxAdvance’s Collaborative PBM Cloud™ transactional platform and clinical intelligence, the companies will work together to improve overall patient care across the continuum of health care and to offer such a model to other large payers.
“Collaboration between retail pharmacies and payers like Centene can further transform the way we provide care,” said Stefano Pessina, executive vice chairman and CEO, Walgreens Boots Alliance, Inc. “Using RxAdvance’s Collaborative PBM Cloud, our partnership can empower our pharmacists to make critical decisions at the point of sale to help improve adherence and also to reduce avoidable medical costs.”
The parties have identified initial markets to deploy the partnership model and are working with community leaders on new pharmacy models.
Further exemplifying this commitment, Walgreens has made a small investment in RxAdvance, and Centene has increased its stake in RxAdvance, following its initial investment announced in March 2018.
“I am excited that today we have partners across the care continuum – Centene and Walgreens – who are committed to the power of RxAdvance’s collaborative PBM model, and to completely reimagine what is possible in this industry,” said Ravi Ika, founder and CEO, RxAdvance. “By pushing the limits of innovative technology and existing transaction standards, there is a clear path forward to reduce administrative costs, avoidable medical costs, and to improve overall quality of care.”
About Centene Corporation
Centene Corporation, a Fortune 100 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Many receive benefits provided under Medicaid, including the State Children’s Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long-Term Services and Supports (LTSS), in addition to other state-sponsored programs, Medicare (including the Medicare prescription drug benefit commonly known as “Part D”), dual eligible programs and programs with the U.S. Department of Defense. Centene also provides healthcare services to groups and individuals delivered through commercial health plans. Centene operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, commercial programs, home-based primary care services, life and health management, vision benefits management, pharmacy benefits management, specialty pharmacy and telehealth services.
Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene’s investor relations website, http://www.centene.com/investors.
About Walgreens
Walgreens (walgreens.com), one of the nation’s largest drugstore chains, is included in the Retail Pharmacy USA Division of Walgreens Boots Alliance, Inc. (NASDAQ: WBA), the first global pharmacy-led, health and wellbeing enterprise. Approximately 8 million customers interact with Walgreens in stores and online each day, using the most convenient, multichannel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice. As of Aug. 31, 2018, Walgreens operates 9,560 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omni-channel business, Walgreens.com. Approximately 400 Walgreens stores offer Healthcare Clinic or other provider retail clinic services.
About RxAdvance
RxAdvance is an innovative national full-service pharmacy benefit manager (PBM) that leverages their Collaborative PBM Cloud™ platform to deliver integrated services that reduce overall pharmacy costs and avoidable drug-impacted medical costs while optimizing specialty spend. In addition, standing shoulder-to-shoulder with plan sponsors, RxAdvance offers a global pharmacy risk partnership model. Our tailored, world-class services are for all plan sponsors — health plans, accountable care organizations (ACOs), exchanges, state Medicaid programs, and employer groups. We provide contractually guaranteed savings in administrative costs, ingredient unit costs, and rebate revenues. For more information, visit www.rxadvance.com.
Forward-Looking Statements
All statements in this release that are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, forward-looking statements often use words such as “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “seek,” “target,” “goal,” “may,” “will,” “would,” “could,” “should,” “can,” “continue” and other similar words or expressions (and the negative thereof). In particular, these statements include, without limitation, statements about our future operating or financial performance, market opportunity, growth strategy, competition and investments. These forward-looking statements reflect current views with respect to future events and are based on numerous assumptions and assessments made in light of current experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors believed to be appropriate. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including those described in: “Risk Factors” appearing in the registration statement on Form S-4 filed by Centene Corporation with the Securities Exchange Commission on May 23, 2019; Item 1A (Risk Factors) of the Walgreens Boots Alliance, Inc. Form 10-K for the fiscal year ended August 31, 2018; and in other documents that Centene Corporation, Walgreens Boots Alliance and RxAdvance may file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results from this collaborative effort may vary materially. These forward-looking statements speak only as of the date they are made and are based only on information available on the date hereof. Except to the extent required by law, Centene Corporation, Walgreens Boots Alliance, Walgreens and RxAdvance do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise. You should not place undue reliance on any forward-looking statements, as actual results may differ materially.
SOURCE Centene Corporation

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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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MEDNAX Reaches Agreement to Sell MedData Business to Frazier Healthcare Partners (Highlighted)

MEDNAX Reaches Agreement to Sell MedData Business to Frazier Healthcare Partners

October 10, 2019 06:50 AM Eastern Daylight Time
FORT LAUDERDALE, Fla.–(BUSINESS WIRE)–MEDNAX, Inc. (NYSE:MD) (“MEDNAX” or “the Company”) and Frazier Healthcare Partners (“Frazier”) today announced that they have entered into a definitive agreement under which MEDNAX will sell its MedData business to Frazier.
MedData is a leading provider of technology-enabled management services for hospitals, health systems and healthcare providers. For four decades, MedData has been providing innovative solutions to the medical community and serving hundreds of millions of patients across numerous medical specialties. MedData currently serves more than 10,000 physicians at a network of 3,000+ facilities nationwide from its headquarters in Brecksville, Ohio, and more than 20 regional offices across the United States.
Nader Naini, Managing Partner of Frazier, said, “We are excited to be partnering with MedData’s 2,000 dedicated employees to continue to provide best-in-class patient financial and advocacy services to the company’s broad base of customers. As part of our growth strategy, we are committed to bringing additional resources to accelerate and enhance its offerings to help our customers reduce costs, recover revenue and optimize their operations.”
Stephen D. Farber, Executive Vice President and Chief Financial Officer of MEDNAX, said, “This agreement is an important step forward in MEDNAX’s ongoing transformation. The sale of MedData will better position MEDNAX, both financially and strategically, for long-term shareholder value creation by allowing it to focus on its core physician services business and significantly reducing the Company’s leverage and future capital expenditures. This transaction also aligns MEDNAX, a key customer of MedData’s, to participate in the success of that organization under Frazier’s ownership.”
In November 2018, MEDNAX announced the initiation of a process to divest MedData to allow the Company to focus on its core physician services business. In connection with the divestment, the Company classified MedData as discontinued operations beginning in the first quarter of 2019.
Under the terms of the purchase agreement, MEDNAX will receive cash consideration of approximately $250 million at closing, as well as economic consideration of up to $50 million that is contingent on both short and long-term performance of MedData. MEDNAX also anticipates certain cash tax benefits from the transaction in the coming quarters. Finally, in connection with the transaction, MEDNAX has entered into a long-term services agreement with MedData, effective as of the closing, and will be one of MedData’s largest customers following the closing of the transaction.
As previously announced with the initiation of the sale process, MEDNAX expects to use net proceeds from the sale for debt repayment, share repurchases and strategic acquisitions.
Further transaction details can be found in a Form 8-K filed by MEDNAX today with the Securities and Exchange Commission. The transaction is subject to customary closing conditions and is expected to close during the fourth quarter of 2019.
Barclays and Guggenheim Securities LLC are serving as financial advisors and Cleary Gottlieb Steen & Hamilton LLP and McDermott, Will & Emery LLP are serving as legal counsel to MEDNAX on the transaction. Goodwin Procter LLP is serving as legal counsel to Frazier Healthcare Partners.
About MEDNAX
MEDNAX, Inc. is a national health solutions partner comprised of the nation’s leading providers of physician services. Physicians and advanced practitioners practicing as part of MEDNAX are reshaping the delivery of care within their specialties and subspecialties, using evidence-based tools, continuous quality initiatives, clinical research and telemedicine to enhance patient outcomes and provide high-quality, cost-effective care. The Company was founded in 1979, and today, through its affiliated professional corporations, MEDNAX provides services through a network of approximately 4,200 physicians in all 50 states and Puerto Rico. In addition to its national physician network, MEDNAX provides services to healthcare facilities and physicians in over 40 states through two complementary businesses, consisting of a management services company and a consulting services company. Additional information is available at www.mednax.com.
About Frazier Healthcare Partners
Founded in 1991, Frazier Healthcare Partners is a leading provider of private equity capital to healthcare companies. With more than $4.2 billion total capital raised, Frazier has invested in more than 170 companies with investment type ranging from company creation and venture capital to buyouts of profitable lower-middle market companies. Frazier has offices in Seattle, WA, and Menlo Park, CA, and invests broadly across the U.S., Canada and Europe. For more information about Frazier Healthcare Partners, visit www.frazierhealthcare.com.
Forward Looking Statements
Certain statements and information in this press release may be deemed to contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by MEDNAX’s management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this press release are made as of the date hereof, and MEDNAX undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments, and business decisions to differ materially from forward-looking statements are described in MEDNAX’s most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, including the sections entitled “Risk Factors”, as well MEDNAX’s current reports on Form 8-K, filed with the Securities and Exchange Commission, and include the effects of economic conditions on MEDNAX’s business; the effects of the Affordable Care Act and potential changes thereto or a repeal thereof; MEDNAX’s relationships with government-sponsored or funded healthcare programs, including Medicare and Medicaid, and with managed care organizations and commercial health insurance payors; MEDNAX’s ability to consummate the proposed disposition of MedData; the performance of MedData subsequent to its disposition; the timing and contribution of future acquisitions; the effects of share repurchases; and the effects of MEDNAX’s shared services and operational initiatives.

Contacts

MEDNAX Investor and Media Contacts:
Investors:
Charles Lynch
Vice President, Strategy and Investor Relations
954-384-0175, x 5692
Media:
Andy Brimmer / Jim Golden / Tanner Kaufman / Jeffrey Kauth
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Frazier Contacts
Frazier Healthcare Partners
Carol Eckert
Director of Investor Relations
206-621-7200
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Saint Peter’s signs LOI to join with RWJBarnabas Health (Highlighted(

Saint Peter’s Hirsch: ‘Ongoing changes in health care delivery made it vital for us to identify a dynamic and strong strategic partner that would allow Saint Peter’s to retain its Catholic mission and identity’

Saint Peter’s Health Care may soon be joining the RWJBarnabas Health family.
The two institutions announced Monday they have signed a Letter of Intent to explore a potential partnership. The agreement is nonbinding, but it puts the systems on a path toward reaching a definitive agreement, which is expected within the coming months.
Under the terms of the LOI, the role of New Brunswick-based Saint Peter’s as a full-service provider of acute health care services for the greater Middlesex County community would be enhanced. West Orange-based RWJBH would make significant investments in Saint Peter’s and expand the network of outpatient services it currently provides, resulting in an even higher level of care for the community. Saint Peter’s would remain a Catholic institution and continue to abide by the Ethical and Religious Directives for Catholic Health Care Services.
The LOI is the first step in the process of evaluating and designing a new relationship. The structure of the relationship — whether it is a merger, acquisition, partnership or affiliation — has not yet been decided.
Both parties will now engage in a due diligence process to define the specifics of the relationship. Approvals will be necessary from state and federal officials, the Catholic Church and others before the transaction is considered complete.
Saint Peter’s CEO and President Les Hirsch said the agreement puts Saint Peter’s in a stronger position moving forward.
“The rapid consolidation of hospitals in New Jersey and need for greater scale, as well as ongoing changes in health care delivery, made it vital for us to identify a dynamic and strong strategic partner that would allow Saint Peter’s to retain its Catholic mission and identity, remain competitive and yield the best possible outcome for our patients, employees, medical staff and the communities we serve,” he said in a statement. “Working in partnership with RWJBarnabas Health would give us an opportunity to enhance the unique strengths of both organizations.”
The announcement follows the request for proposals Saint Peter’s released in October 2018, when it said it was considering a strategic partner. Saint Peter’s discernment process has involved a comprehensive and detailed analysis of the organization, its rich Catholic mission, the competitive market and broader industry trends, Hirsch said.
The Most Rev. James F. Checchio, who as bishop of the Roman Catholic Diocese of Metuchen is the sole member of the corporation, affirmed his support of the recommendation of the board of governors to pursue the partnership.
“As an independent institution for the last 112 years, Saint Peter’s has helped to fulfill the Church’s mission of healing in an extraordinary way while making Christ’s love and mercy known to people of all ages and backgrounds, from conception to natural death,” he said in a statement.
“Through this proposed strategic partnership, Saint Peter’s will be strengthened to continue to serve those who are in need of — and greatly benefit from — the excellent, accessible and life-affirming care intrinsic to Saint Peter’s Catholic identity and mission. This partnership will also position Saint Peter’s to continue caring for the whole person with a compassionate response and to greater inform the wider community to the full range of human needs, hallmarks of our Catholic faith.
“I am grateful for the work of Saint Peter’s leadership in bringing this potential transaction to this stage, and am particularly appreciative of the ongoing oversight and guidance of Dr. John Haas, president emeritus of the National Catholic Bioethics Center, in assuring that any transaction is structured such that Saint Peter’s will remain stalwart in its fidelity to the Catholic health care tradition.”
The parties have been in discussions for some time and share a common perspective and culture regarding providing high quality, cost-effective services to their communities consistent with their respective missions and the need to move in the direction of population health management.
RWJBarnabas Health CEO and President Barry Ostrowsky said coming together makes sense for all parties involved — especially those seeking health care services.
“The rapidly changing health care landscape presents new challenges and opportunities,” he said in a statement. “Saint Peter’s is a vital resource to central New Jersey, and through this agreement we would greatly enhance our commitment in these communities with our mission of improving the health and well-being of its residents.
“With tremendous support from municipal, county and state elected officials, our Robert Wood Johnson University Hospital academic medical center has enjoyed a longstanding collegial relationship with Saint Peter’s, and we are incredibly excited about the many possibilities for enhanced collaboration signaled by this Letter of Intent.”
RWJBarnabas Health is New Jersey’s most comprehensive academic health care system, with a service area of nine counties covering 5 million people. The system includes 11 acute care hospitals, three acute care children’s hospitals and a renowned pediatric rehabilitation hospital, among many other facilities. RWJBH has a partnership with Rutgers University, creating New Jersey’s largest academic health care system.
Saint Peter’s University Hospital, a 478-bed acute-care teaching hospital sponsored by the Roman Catholic Diocese of Metuchen, is the flagship of Saint Peter’s Healthcare System that also includes the Children’s Hospital at Saint Peter’s. Saint Peter’s is one of a few independent Catholic hospitals in the country sponsored by a Roman Catholic diocese.

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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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Mergers, Acquisitions and Investments (Q4_2019)

  • Plans
  • Providers
  • VeNdors

Summary analysis

Q4 2019 saw significant plan M&A activity. 

  • Humana will acquire hospice pharmacy provider Enclara. Enclara currently serves 97,000 hospice patients. The deal is projectd to close early 2020. 
  • The Partners (NH) plan to acquire Exeter Health Resources was stopped by the state Attorney General over antitrust concerns. 
  • Centene, Walgreens and RxAdvance announced plans to pursue opportunites in certain “underserved” markets. Initial messaging suggests the alliance will pursue Medicaid PBM opportunities. 
  • Health Alliance Plan (HAP) is re-entering the Michigan market with the approval of its purchase of Trusted Health- Michigan. HAP buys footprint in Medicaid Region 10 with the buy. 
  • The BCBS NC merger with Cambria Health Solutions was scuttled after video of BC CEO Patrick Conway driving drunk surfaced in late Septmeber. BCBS NC reported $10B in revenue in 2018, compared to Cambia’s $6B. 
  • Molina bought NY footprint with its purchase of YourCare Health Plan. The deal comes with 46,000 Medicaid lives in Western NY. The deal cost Molina $40M. 
  • United bought a Medicare Advantage plan in VA. Piedmont Community Health Plans sold its MA enrollment of 5,000 members Oct. 1.
  • Optima (Sentarra) acquired majority owner status of one of the state’s oldest MCO- VA Premier- in late September. The combined MCO will have 800,000 Medicaid lives. 
  • MCNA Dental bought Healthplex. The new entity will provide dental services to more than 8M CHIP/Medicaid members.  
  • The long-strained deal to sell Fidelis (NY) encountered new obstabcles in October, when CMS questioned  Gov. Cuomo’s efforts to extract money from the sale of Fidelis to Centene. Cuomo argued that since Fidelis received significant Medicaid funding, the state should receive payments as part of the Centene purchase of Fidelis. 
  • Concerns over the Centene ownership of Arkansas Total Care mounted in Q4. Under the state PASSE (provider led plans) model, providers are supposed to own 51% of the entities. Centene’s arrangement with Mercy health system allows Arkansas Total Care plan to technically meet the requirement, but many are calling foul. 
  • BCBS of AZ bought Steward Health Choice AZ. Much of the purchase strategy centers on building competency serving duals. Steward currently serves 200,000 Medicaid members. 
  • The Centene-Wellcare deal progressed on multiple fronts, including: 
    • CVS Health will pick up Centene’s IL Medicaid and Medicare plans as part of divestment requirements.
    • Multiple states completed the approval of the Centene-WellCare merger.  
  • The Health Plan (WV) announced it will drop plans to merge with WVU Medicine. Early analysis did not yield reasons for the aborted deal. 

Related News Items 

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Summary Analysis

Q4 2019 saw significant provider M&A activity.

  • Highlights from health system deals included: 
    • Hackensack Meridien Health and Englewood Health (NJ) executed a merger agreement. Hackensack brought 17 hospitals and $400M in cash to the deal. Hackensack has focused recently on expanding the service array, including opening a behavioral health urgent care center. 
    • CHS will sold 3 of its VA hospitals (totalling 485 beds) to Bon Secours Mercy Health. 
    • The CA St Joseph-Adventist merger was blocked by the state Attorney General. The deal would have created a new network of 9 rural hospitals.  
    • Sanford Health (SD) and UnityPoint (IA) backed out of the planned $11B merger they announced in the summer. Early analysis suggests there may have been some issues related to kickbacks allegations at Sanford that were not uncovered in initial discovery. 
    • Quorum Health is said to be exploring investment from KKR. Quorum, formed in 2016, has 24 facilities and has posted losses the last 2 years. 
  • The investment focus on home health continued in Q4, including: 
    • Walmart and Amedisys announced their intent to take their pilot nationwide. Amedisyis provides care coordination and referrals to home health services working with 700 different home care agencies. Early efforts with Walmart are based on a kiosk in the retail space designed to assess for home health needs. 
    • Revelstoke PE invested in The Care Team (TCT). TCT provides home health / home care services in Michigan. 
    • Alpine invested in AmeriBest, a home care agency in PA. 
    • CareFinders bought At Home Quality Care (PA) and Philadelphia Home Care. 
    • CareAdvantage bought Team Nurse, Inc. CareAdvantage operates an in-hom nurse network in DE, MD, VA and D.C. 
  • Hospice activity included: 
    • Towerbrook PE and Ascension Health teamed up to buy Compassus (Nashville-based hospice provider) or $1B. Compassus has locations in 30 states.
    • Addus closed out an intense year of acqusitions with its $130M purchase of Hospice Partners of America (based in AL, with 21 locations nationwide). 
  • There was intense activity in the behavioral health space, including: 
    • 4 Arkansas provider groups formed Arisa Health, with the new organization totalling 1,275 employees.
    •  The Stepping Stones Group bought New England ABA (an applied behavioral analysis therapy provider)
    • Acorn Health acquired Behavior Therapy Specialists (an ABA provider). BTS has operations in IL and MO. 
    • Seaside Healthcare (LA) bought Strategic Interventions (NC) to expand its footprint in NC, LA, GA and TX. Both entities provide substance abuse and behavioral health services. 

Related news items

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Summary Analysis

There was limited activity for investment in solution vendors related to Medicaid in Q4. 

  • Insight and Regroup (both telehealth) merged to become the largest telepsychiatry provider in the nation. 
  • MEDNAX sold its data division (MedData) to Frazier Healthcare Partners. MedData has 10,000 physician clients and 3,000 facility clients and 2,000 employees.

Related News Items

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