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.

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.

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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.

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