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Insurer’s stake in firm stirs concern in Arkansas


Insurer’s stake in firm stirs concern in Arkansas (highlighted)

To participate in Arkansas’ Medicaid managed care initiative, national health insurance giant Centene teamed up with Mercy health system in 2017 to form a new company known as Arkansas Total Care.
That company is one of three that now receive millions of dollars from the state Medicaid program each month to pay for the care of about 45,000 Arkansans who have significant mental illness or developmental disabilities.
Under the state law authorizing the initiative, such companies — known as Provider-led Arkansas Share Savings Entities, or PASSEs — are required to be at least 51% owned by participating health care providers, such as doctors, hospitals or organizations offering services for the developmentally disabled.
Filings with the state Insurance Department indicate that Mercy, which owns hospitals in Arkansas and three other states, owned no more than 26% of Arkansas Total Care as of June 30. Centene owned the remaining 74%.
Despite the insurer’s large stake, the state Insurance Department considers Arkansas Total Care to meet the provider ownership requirement because Centene owns part of its share through a subsidiary, LifeShare Management Group.
The Arkansas Department of Human Services issued LifeShare a temporary certificate as a provider of services for the developmentally disabled in 2017, just over a month before Arkansas Total Care was approved to participate in the managed care program.
“The law doesn’t provide for us to look at parent companies,” Insurance Department spokesman Ryan James said. “If it’s a provider, we count it on the provider list.”
Rep. Aaron Pilkington, who sponsored the legislation, said Centene’s ownership stake is “concerning” and doesn’t follow his “intent that it would be 51% owned by providers.”
“That’s why we called it provider-led organized care,” Pilkington, R-Clarksville, said. “Literally the first word is provider.”
Sen. Missy Irvin, R-Mountain View, who is chairman of the Senate Committee on Public Health, Welfare and Labor, had a similar reaction when she recently learned about Arkansas Total Care’s ownership.
“This to me seems like an end-run around that legislation and that legislative intent, and that’s not what I believe that the Legislature endorsed,” said Irvin, who works at her husband’s family medicine practice.
She and many health care providers would have opposed Pilkington’s bill, which became Act 775, if the requirement of provider ownership had not been included, she said.
John Ryan, chief executive of Arkansas Total Care, said in a statement that his company “meets the requirements of a certified PASSE as established by Arkansas DHS and regulated by the Arkansas Insurance Department.”
“As a certified Arkansas Medicaid Provider, with an active Arkansas Medicaid Provider number, LifeShare has been serving members of the PASSE program since the program’s inception,” he said.
Under the Provider-led Arkansas Share Savings Entities initiative’s first phase, Arkansas Total Care and three other companies last year began coordinating Medicaid recipients’ care in exchange for monthly payments of $173.33 per recipient.
On March 1, three of the companies became responsible for paying for all the recipients’ care in exchange for larger monthly payments, ranging from $998.86 to $12,672.62 per recipient.
One of the companies, Forevercare, dropped out before the larger payments started.
From March through June 30, payments to the three remaining companies totaled $540 million, including $123 million that went to Arkansas Total Care.
The initiative was designed to reduce costs by better coordinating care while generating money for the state through its 2.5% tax on insurance premiums.
It emerged in 2016 as a compromise with providers who feared that managed care would lead to cuts in benefits and reimbursement rates.
“We wanted to create a new type of organization that combined the strengths of providers rooted here in the state with partners that have expertise in operating business systems that could immediately comply with insurance laws and regulations as well as federal Medicaid requirements,” Human Services Department spokeswoman Amy Webb said in an email.
“The model minimizes the incentive to deny or decrease service to our members because 51% of the ownership is by the same providers paid to provide the direct service. This forces the model to look for a better way to maintain efficiency by targeted, coordinated, care coordination to improve the overall health and care of the member, and in turn, will save money by avoiding high cost services like hospitalizations/institutions.”
The proposal won the support of providers, sailing through the Legislature with little opposition.
The federal government provides 70% of the funding for the payments that go to the managed care companies. Arkansas then recoups 2.5% of the payments — including the share funded by the federal government — through a tax on insurance premiums.
Act 775 of 2017 requires half of the premium tax money to go toward reducing the number of people with developmental disabilities on a waiting list for home-based services, such as help with dressing and bathing.
As of August, about 4,500 people were receiving the services and 3,300 were on the waiting list.
THE OTHER COMPANIES
Anthem, an Indianapolis-based health insurer, owns 49% of one of the managed care companies, Summit Community Care.
The remaining 51% of Summit is owned by the Arkansas Provider Coalition. According to materials presented by the Human Services Department to state legislators in April, the coalition includes the Little Rock-based Baptist Health system, all but one of the state’s 12 community mental health centers and dozens of other providers of mental-health care and services for the developmentally disabled.
Through its pending acquisition of Boston-based Beacon Health Options, Anthem is also set to own a sixth of the other managed care company, Empower Healthcare Solutions.
The rest of Empower’s ownership is evenly split among five other entities: Arkansas Community Health Network, the Arkansas Healthcare Alliance, Independent Case Management, Woodruff Health Group and Statera.
Arkansas Community Health Network consists of Baxter Regional Health System, North Arkansas Medical System, Unity Health and White River Health System.
The Arkansas Healthcare Alliance is made up of 22 providers of mental health and substance abuse treatment services and services for the developmentally disabled, according to the Human Services Department.
Independent Case Management, based in Little Rock, serves the developmentally disabled.
Woodruff Health Group “was created to hold the interest of ARcare,” a federally funded, Augusta-based community health center with more than 40 clinics in Arkansas, Mississippi and Kentucky, according to a June 15, 2017, letter to the Insurance Department announcing Empower’s intention to participate in the managed care initiative.
Statera is “an entity comprised of leaders and innovators committed to serving the long-term support services needs of Arkansans,” according to Empower’s website.
Representatives of Summit Community Care and Empower didn’t return calls seeking comment.
INFORMATION REMOVED
As of June 30, Centene owned 49% of Arkansas Total Care through a health plan subsidiary, Arkansas Health and Wellness, and an additional 25% through LifeShare, according to Insurance Department filings.
LifeShare’s temporary Arkansas certification allowed it to provide case management and supportive living services to the developmentally disabled.
The certification was upgraded to a regular license on Feb. 1 of this year.
According to since-removed pages from its website, LifeShare was founded in New Hampshire in 1995 and acquired by Centene in 2015.
At a conference with investors that year in New York City, Centene executive Holly Benson said LifeShare had helped address the needs of the disabled by developing a “pathways model for coordinating in partnership with managed care” as well as a “rapid crisis response” program to reduce unnecessary emergency room visits, according to a transcript of the conference.
As recently as April 6, LifeShare said on its website that it “develops and delivers person-centered solutions for people with [intellectual and developmental disabilities] and others with complex needs through managed care organizations,” according to version of a page from the site captured by the San Francisco-based Internet Archive.
LifeShare’s website also said then that it is a “direct services IDD and child welfare provider in multiple states.”
Centene’s site, as recently as July 19, said LifeShare “develops and delivers person-centered solutions for people with intellectual or developmental disabilities (IDD) and others with complex needs through managed care and state and health organizations,” according to an archived page.
That information had disappeared from the version of that page on Centene’s website as of Friday.
LifeShare’s site appeared to contain little more than a link to Arkansas Total Care’s website and a staff member’s phone number and email address. The staff member didn’t return a call seeking comment.
In a response to written questions from the Arkansas Democrat-Gazette, including why the website was changed, Arkansas Total Care provided only Ryan’s statement.
‘PERSON-CENTERED APPROACH’
The 2017 state law defines a “participating provider” as one that “delivers healthcare services” to Medicaid recipients served or eligible to be served by one of the managed care companies.
Webb, the Human Services Department spokeswoman, said LifeShare has never filed a claim with the state Medicaid program.
As of last month, she said it also didn’t appear that LifeShare had billed Arkansas Total Care or the other two managed care entities for any services.
She added that “providers would not have to bill immediately, and it’s my understanding that PASSEs have not submitted all encounters yet, so I can’t say for certain there won’t be any encounters for this timeframe.”
Tom Masseau, executive director of Disability Rights Arkansas, a federally funded nonprofit, said the size of Centene’s stake in Arkansas Total Care “kind of defeats the whole entire purpose” of the provider-led managed care legislation.
“If that’s the direction the state wanted to go, they should have just done that in the first place and just had Centene or Anthem come in and operate the managed care program,” he said.
He added, however, that he hadn’t heard any complaints about Arkansas Total Care and was impressed by a presentation the company gave in May.
“They really seemed to really understand the person-centered approach,” he said. “They were looking at how the person could live successfully in the community and not just within going to their group home or day [habilitation] program.”
Stephanie Smith, chief operating officer of Easterseals Arkansas, said “all three PASSEs have figured ways to meet the spirit and intent of the provider-led requirement.” Easterseals Arkansas serves the developmentally disabled and, according to the Human Services Department, has a small stake in Summit Community Care,
Of the three Provider-led Arkansas Share Savings Entities, she said, Arkansas Total Care is “the one most willing to come to the table and meet with providers and [has] really been the lead in being proactive in getting some of the initial problems solved.”
Those problems included delayed payments and difficulties that providers encountered submitting claims during the rollout of the managed care initiative’s second phase.
“As long as they’re doing a good job making sure that the individuals with behavioral health needs and developmental disability needs are getting the services that they need, they’re getting the care coordination that they need, and they’re working well with providers to ensure that they’re timely in prior authorizing services and making sure there’s access to services — to me that’s the piece that’s most important,” she said.
A Section on 11/02/2019
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Blue Cross Blue Shield of Arizona acquires Steward Health Choice Arizona | AZ Big Media


Blue Cross Blue Shield of Arizona acquires Steward Health Choice Arizona


Above: Pam Kehaly is president and CEO of Blue Cross Blue Shield of Arizona (BCBSAZ), the state’s largest locally owned healthcare insurer.  

Blue Cross Blue Shield of Arizona (BCBSAZ) plans to acquire Steward Health Choice Arizona from Steward Health Care System LLC, including the Arizona Health Care Cost Containment System (AHCCCS) Complete Care plan and the “Generations” Medicare health plan for dual-eligible special needs members. The acquisition will give BCBSAZ the capability to serve Arizonans who are eligible for Medicaid and those who are dual-eligible for both Medicare and Medicaid. It advances the organization’s strategy of expanding access to quality healthcare in Arizona, addressing members’ evolving healthcare needs, and better supporting Arizona’s vulnerable populations.
The transaction is expected to close following regulatory approval. The Health Choice plans will remain fully operational, stand-alone plans, and the local leadership team will remain the same.
“As a local, non-profit plan, our job is to help Arizonans with their healthcare needs,” said Pam Kehaly, President and CEO of BCBSAZ. “This investment brings us closer to Arizonans who need our support, and gives us more opportunity to inspire health, which is truly at the heart of what we do.”
BCBSAZ and Steward Health Choice Arizona both share long-term commitments to the state of Arizona, its residents and providers. Both companies have decades of experience serving a broad range of managed care programs, including commercial, employer based, and large government-sponsored programs in Arizona.
“Steward Health Choice Arizona shares our values, our commitment to members and Arizona, and our vision of bringing affordable, innovative healthcare solutions to the people of Arizona,” Kehaly added. “This acquisition will allow BCBSAZ to work in partnership with the state of Arizona to support a population that is heavily burdened with health challenges.”
With more than 17,000 healthcare professionals providing services to more than 200,000 AHCCCS members, Steward Health Choice Arizona has laid the groundwork for BCBSAZ to improve the quality of life for more individuals and families.
“Steward’s guiding principle and proven model as a leading Accountable Care Organization is to provide an integrated approach to health and wellness for our patients,” said Dr. Michael Callum, Executive Vice President of Steward Health Care. “By concentrating on our providers and our Accountable Care Organization, we’re enhancing our commitment to patients’ well-being.”
“BCBSAZ’s acquisition of Steward Health Choice Arizona will give Arizonans of all ages access to a wider range of comprehensive programs and solutions, and further enhance both organizations’ focus on affordable and high-quality healthcare services,” said Rubén José King-Shaw Jr., President of Steward Health Care Network.
BCBSAZ and Steward Health Choice Arizona will work diligently in partnership with AHCCCS for a smooth transition for both employees and members so that members continue to receive healthcare benefits throughout the transition period.
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Centene and CVS Health Announce Agreement for CVS Health to Acquire IlliniCare Health | Centene Corporation

Centene and CVS Health Announce Agreement for CVS Health to Acquire IlliniCare Health (Highlighted)

ST. LOUIS, Dec. 2, 2019 /PRNewswire/ — Centene Corporation (NYSE: CNC) (“Centene”) and CVS Health (NYSE: CVS) announced today that, in connection with the previously announced merger agreement between Centene and WellCare Health Plans, Inc. (NYSE: WCG), Centene has entered into a definitive agreement under which CVS Health will acquire Centene’s Illinois health plan subsidiary, IlliniCare Health Plan, Inc. (“IlliniCare”). The transaction entails the sale of Centene’s Medicaid and Medicare Advantage lines of business in Illinois.
Centene will retain IlliniCare’s Medicare-Medicaid Alignment Initiative (“MMAI”) business and IlliniCare’s statewide YouthCare foster care contract, set to commence in February 2020. Centene’s Ambetter business in Illinois is not affected. The companies are committed to ensuring that there is a smooth transition for members.
“We are continuing to make progress towards completing our transaction with WellCare and the divestiture of our IlliniCare Health plan is the next step in that process,” said Michael F. Neidorff, Centene’s Chairman, President and Chief Executive Officer. “Our employees in Illinois have done an exceptional job serving our communities in the state. We are pleased to enter this agreement with CVS Health, under which these employees can continue helping members achieve better health outcomes while delivering benefits to providers. We will work closely with CVS Health to ensure a smooth transition of this business for members, employees and providers.”
“Expanding our Medicaid and Medicare Advantage presence in Illinois will allow us to serve more members with our proven holistic approach that addresses physical, behavioral and social determinants of care,” said Karen S. Lynch, Executive Vice President, CVS Health and President, Aetna. “We look forward to working with Centene on a seamless transition and developing a deeper relationship with the state and local providers.”
The closing of the transaction with CVS Health is subject to U.S. federal antitrust clearance, receipt of Illinois state regulatory approvals and other customary closing conditions, as well as the closing of the Centene – WellCare transaction.
As previously announced on March 27, 2019, Centene and WellCare agreed to combine in a transaction that will create a premier healthcare enterprise focused on government-sponsored healthcare programs and a leader in Medicaid, Medicare and the Health Insurance Marketplace. The combination has received approvals from insurance and health care departments from 26 states. Completion of the Centene – WellCare transaction remains subject to clearance under the Hart-Scott-Rodino Act, receipt of required state regulatory approvals and other customary closing conditions.
Centene and WellCare continue to expect that the Centene – WellCare transaction will be completed by the first half of 2020.
The financial terms of this transaction will not be disclosed and the impact to CVS Health earnings once closed is expected to be immaterial.
Additional information about the Centene – WellCare transaction can be found at centene-wellcare.com.
About Centene
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 CVS Health
CVS Health is the nation’s premier health innovation company helping people on their path to better health. Whether in one of its pharmacies or through its health services and plans, CVS Health is pioneering a bold new approach to total health by making quality care more affordable, accessible, simple and seamless. CVS Health is community-based and locally focused, engaging consumers with the care they need when and where they need it. The Company has more than 9,800 retail locations, approximately 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 93 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy services, and a leading stand-alone Medicare Part D prescription drug plan. CVS Health also serves an estimated 39 million people through traditional, voluntary and consumer-directed health insurance products and related services, including a rapidly expanding Medicare Advantage offering. This innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at https://www.cvshealth.com.
Cautionary Statement on Forward-Looking Statements of Centene
All statements, other than statements of current or historical fact, contained in this communication are forward-looking statements. 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 Centene’s future operating or financial performance, market opportunity, growth strategy, competition, expected activities in completed and future acquisitions, including statements about the impact of Centene’s proposed acquisition of WellCare Health Plans, Inc. (the “WellCare Transaction”), Centene’s recent acquisition (the “Fidelis Care Transaction”) of substantially all the assets of New York State Catholic Health Plan, Inc., d/b/a Fidelis Care New York (“Fidelis Care”), investments and the adequacy of Centene’s available cash resources.
These forward-looking statements reflect Centene’s current views with respect to future events and are based on numerous assumptions and assessments made by us in light of Centene’s experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors Centene believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause Centene’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.
All forward-looking statements included in this filing are based on information available to us on the date of this communication. Except as may be otherwise required by law, Centene undertakes no obligation to update or revise the forward-looking statements included in this communication, whether as a result of new information, future events or otherwise, after the date of this filing. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to, the following: (i) the risk that regulatory or other approvals required for the WellCare Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and Centene’s resources or otherwise have an adverse effect on Centene; (ii) the possibility that certain conditions to the consummation of the WellCare Transaction will not be satisfied or completed on a timely basis and accordingly the WellCare Transaction may not be consummated on a timely basis or at all; (iii) uncertainty as to the expected financial performance of the combined company following completion of the WellCare Transaction; (iv) the possibility that the expected synergies and value creation from the WellCare Transaction will not be realized, or will not be realized within the expected time period; (v) the exertion of management’s time and Centene’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for the WellCare Transaction; (vi) the risk that unexpected costs will be incurred in connection with the completion and/or integration of the WellCare Transaction or that the integration of WellCare will be more difficult or time consuming than expected; (vii) the risk that potential litigation in connection with the WellCare Transaction may affect the timing or occurrence of the WellCare Transaction or result in significant costs of defense, indemnification and liability; (viii) a downgrade of the credit rating of Centene’s indebtedness, which could give rise to an obligation to redeem existing indebtedness; (ix) unexpected costs, charges or expenses resulting from the WellCare Transaction; (x) the inability to retain key personnel; (xi) disruption from the announcement, pendency and/or completion of the WellCare Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and (xii) the risk that, following the WellCare Transaction, the combined company may not be able to effectively manage its expanded operations.
Additional factors that may cause actual results to differ materially from projections, estimates, or other forward-looking statements include, but are not limited to, the following: (i) Centene’s ability to accurately predict and effectively manage health benefits and other operating expenses and reserves; (ii) competition; (iii) membership and revenue declines or unexpected trends; (iv) changes in healthcare practices, new technologies, and advances in medicine; (v) increased healthcare costs, (vi) changes in economic, political or market conditions; (vii) changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, collectively referred to as the Affordable Care Act (“ACA”), and any regulations enacted thereunder that may result from changing political conditions or judicial actions, including the ultimate outcome of the District Court decision in “Texas v. United States of America” regarding the constitutionality of the ACA; (viii) rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting Centene’s government businesses; (ix) Centene’s ability to adequately price products on federally facilitated and state-based Health Insurance Marketplaces; (x) tax matters; (xi) disasters or major epidemics; (xii) the outcome of legal and regulatory proceedings; (xiii) changes in expected contract start dates; (xiv) provider, state, federal and other contract changes and timing of regulatory approval of contracts; (xv) the expiration, suspension, or termination of Centene’s contracts with federal or state governments (including but not limited to Medicaid, Medicare, TRICARE or other customers); (xvi) the difficulty of predicting the timing or outcome of pending or future litigation or government investigations; (xvii) challenges to Centene’s contract awards; (xviii) cyber-attacks or other privacy or data security incidents; (xix) the possibility that the expected synergies and value creation from acquired businesses, including, without limitation, the Fidelis Care Transaction, will not be realized, or will not be realized within the expected time period; (xx) the exertion of management’s time and Centene’s resources, and other expenses incurred and business changes required in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for acquisitions, including the Fidelis Care Transaction; (xxi) disruption caused by significant completed and pending acquisitions, including, among others, the Fidelis Care Transaction, making it more difficult to maintain business and operational relationships; (xxii) the risk that unexpected costs will be incurred in connection with the completion and/or integration of acquisition transactions, including, among others, the Fidelis Care Transaction; (xxiii) changes in expected closing dates, estimated purchase price and accretion for acquisitions; (xxiv) the risk that acquired businesses, including Fidelis Care, will not be integrated successfully; (xxv) the risk that, following the Fidelis Care Transaction, Centene may not be able to effectively manage its expanded operations; (xxvi) restrictions and limitations in connection with Centene’s indebtedness; (xxvii) Centene’s ability to maintain the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth; (xxviii) availability of debt and equity financing, on terms that are favorable to us; (xxxix) inflation; and (xxx) foreign currency fluctuations.
This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect Centene’s business operations, financial condition and results of operations, in Centene’s filings with the Securities and Exchange Commission (the “SEC”), including the registration statement on Form S-4 filed by Centene with the Securities and Exchange Commission on May 23, 2019 (the “Registration Statement”), and Centene’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, Centene cannot give assurances with respect to Centene’s future performance, including without limitation Centene’s ability to maintain adequate premium levels or Centene’s ability to control its future medical and selling, general and administrative costs.
Important Additional Information and Where to Find It
In connection with the WellCare Transaction, on May 23, 2019, Centene filed with the SEC the Registration Statement, which included a prospectus with respect to the shares of Centene’s common stock to be issued in the WellCare Transaction and a joint proxy statement for Centene’s and WellCare’s respective stockholders (the “Joint Proxy Statement”). The SEC declared the Registration Statement effective on May 23, 2019, and the Joint Proxy Statement was first mailed to stockholders of Centene and WellCare on or about May 24, 2019. Each of Centene and WellCare may file other documents regarding the WellCare Transaction with the SEC. This communication is not a substitute for the Registration Statement, the Joint Proxy Statement or any other document that Centene or WellCare may send to their respective stockholders in connection with the WellCare Transaction. INVESTORS AND SECURITY HOLDERS OF CENTENE AND WELLCARE ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CENTENE, WELLCARE, THE WELLCARE TRANSACTION AND RELATED MATTERS. Investors and security holders of Centene and WellCare are able to obtain free copies of the Registration Statement, the Joint Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about Centene and WellCare through the website maintained by the SEC at www.sec.gov. Centene and WellCare make available free of charge at www.centene.com and www.ir.wellcare.com, respectively, copies of materials they file with, or furnish to, the SEC.
No Offer or Solicitation
This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Centene and WellCare Receive State Approvals for Pending Merger from Illinois and New Jersey

All 27 States Have Provided Approvals of Centene’s Control of WellCare Domestic Insurers  
ST. LOUIS and TAMPA, Fla., Dec. 5, 2019 /PRNewswire/ — Centene Corporation (NYSE: CNC) (“Centene”) and WellCare Health Plans, Inc. (NYSE: WCG) (“WellCare”) today announced that the Illinois Department of Insurance, the New Jersey Department of Banking and Insurance and the New Jersey Division of Medical Assistance and Health Services have each approved Centene’s indirect pending acquisition of WellCare domestic insurers in those respective states. Completion of the transaction remains subject to clearance under the Hart-Scott-Rodino Act, approval of the divestitures of legal entities in the states of Illinois and Nebraska, and other customary closing conditions.
“We are pleased to have received these additional approvals necessary to close the WellCare merger, which remains on track to close by the first half of 2020,” said Michael F. Neidorff, Centene’s Chairman, President and Chief Executive Officer. “We are now one step closer to completing our combination of two high-performing growth companies that are committed to helping people live healthier lives. We are focused on completing the remaining milestones needed to close the transaction, so we can provide our members and communities access to high-quality healthcare through the combined company’s wide range of affordable health solutions.”
Additional information about the transaction can be found at centene-wellcare.com.
About Centene
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 WellCare Health Plans, Inc.
Headquartered in Tampa, Fla., WellCare Health Plans, Inc. (NYSE: WCG) focuses primarily on providing government-sponsored managed care services to families, children, seniors and individuals with complex medical needs primarily through Medicaid, Medicare Advantage and Medicare Prescription Drug Plans, as well as individuals in the Health Insurance Marketplace. WellCare serves approximately 6.4 million members nationwide as of September 30, 2019. For more information about WellCare, please visit the company’s website at www.wellcare.com.
Cautionary Statement on Forward-Looking Statements of Centene
All statements, other than statements of current or historical fact, contained in this communication are forward-looking statements. 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 Centene’s future operating or financial performance, market opportunity, growth strategy, competition, expected activities in completed and future acquisitions, including statements about the impact of Centene’s proposed acquisition of WellCare Health Plans, Inc. (the “WellCare Transaction”), Centene’s recent acquisition (the “Fidelis Care Transaction”) of substantially all the assets of New York State Catholic Health Plan, Inc., d/b/a Fidelis Care New York (“Fidelis Care”), investments and the adequacy of Centene’s available cash resources.
These forward-looking statements reflect Centene’s current views with respect to future events and are based on numerous assumptions and assessments made by us in light of Centene’s experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors Centene believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause Centene’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.
All forward-looking statements included in this filing are based on information available to us on the date of this communication. Except as may be otherwise required by law, Centene undertakes no obligation to update or revise the forward-looking statements included in this communication, whether as a result of new information, future events or otherwise, after the date of this filing. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to, the following: (i) the risk that regulatory or other approvals required for the WellCare Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and Centene’s resources or otherwise have an adverse effect on Centene; (ii) the possibility that certain conditions to the consummation of the WellCare Transaction will not be satisfied or completed on a timely basis and accordingly the WellCare Transaction may not be consummated on a timely basis or at all; (iii) uncertainty as to the expected financial performance of the combined company following completion of the WellCare Transaction; (iv) the possibility that the expected synergies and value creation from the WellCare Transaction will not be realized, or will not be realized within the expected time period; (v) the exertion of management’s time and Centene’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for the WellCare Transaction; (vi) the risk that unexpected costs will be incurred in connection with the completion and/or integration of the WellCare Transaction or that the integration of WellCare will be more difficult or time consuming than expected; (vii) the risk that potential litigation in connection with the WellCare Transaction may affect the timing or occurrence of the WellCare Transaction or result in significant costs of defense, indemnification and liability; (viii) a downgrade of the credit rating of Centene’s indebtedness, which could give rise to an obligation to redeem existing indebtedness; (ix) unexpected costs, charges or expenses resulting from the WellCare Transaction; (x) the inability to retain key personnel; (xi) disruption from the announcement, pendency and/or completion of the WellCare Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and (xii) the risk that, following the WellCare Transaction, the combined company may not be able to effectively manage its expanded operations.
Additional factors that may cause actual results to differ materially from projections, estimates, or other forward-looking statements include, but are not limited to, the following: (i) Centene’s ability to accurately predict and effectively manage health benefits and other operating expenses and reserves; (ii) competition; (iii) membership and revenue declines or unexpected trends; (iv) changes in healthcare practices, new technologies, and advances in medicine; (v) increased healthcare costs, (vi) changes in economic, political or market conditions; (vii) changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, collectively referred to as the Affordable Care Act (“ACA”), and any regulations enacted thereunder that may result from changing political conditions or judicial actions, including the ultimate outcome of the District Court decision in “Texas v. United States of America” regarding the constitutionality of the ACA; (viii) rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting Centene’s government businesses; (ix) Centene’s ability to adequately price products on federally facilitated and state-based Health Insurance Marketplaces; (x) tax matters; (xi) disasters or major epidemics; (xii) the outcome of legal and regulatory proceedings; (xiii) changes in expected contract start dates; (xiv) provider, state, federal and other contract changes and timing of regulatory approval of contracts; (xv) the expiration, suspension, or termination of Centene’s contracts with federal or state governments (including but not limited to Medicaid, Medicare, TRICARE or other customers); (xvi) the difficulty of predicting the timing or outcome of pending or future litigation or government investigations; (xvii) challenges to Centene’s contract awards; (xviii) cyber-attacks or other privacy or data security incidents; (xix) the possibility that the expected synergies and value creation from acquired businesses, including, without limitation, the Fidelis Care Transaction, will not be realized, or will not be realized within the expected time period; (xx) the exertion of management’s time and Centene’s resources, and other expenses incurred and business changes required in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for acquisitions, including the Fidelis Care Transaction; (xxi) disruption caused by significant completed and pending acquisitions, including, among others, the Fidelis Care Transaction, making it more difficult to maintain business and operational relationships; (xxii) the risk that unexpected costs will be incurred in connection with the completion and/or integration of acquisition transactions, including, among others, the Fidelis Care Transaction; (xxiii) changes in expected closing dates, estimated purchase price and accretion for acquisitions; (xxiv) the risk that acquired businesses, including Fidelis Care, will not be integrated successfully; (xxv) the risk that, following the Fidelis Care Transaction, Centene may not be able to effectively manage its expanded operations; (xxvi) restrictions and limitations in connection with Centene’s indebtedness; (xxvii) Centene’s ability to maintain the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth; (xxviii) availability of debt and equity financing, on terms that are favorable to us; (xxxix) inflation; and (xxx) foreign currency fluctuations.
This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect Centene’s business operations, financial condition and results of operations, in Centene’s filings with the Securities and Exchange Commission (the “SEC”), including the registration statement on Form S-4 filed by Centene with the Securities and Exchange Commission on May 23, 2019 (the “Registration Statement”), and Centene’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, Centene cannot give assurances with respect to Centene’s future performance, including without limitation Centene’s ability to maintain adequate premium levels or Centene’s ability to control its future medical and selling, general and administrative costs.
Cautionary Statement on Forward-Looking Statements of WellCare
All statements, other than statements of current or historical fact, contained in this communication are forward-looking statements. 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). Such forward-looking statements are intended to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and this statement is included for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about WellCare’s future operating or financial performance, market opportunity, growth strategy, competition, expected activities in completed and future acquisitions, including statements about the impact of the Transaction, investments and the adequacy of WellCare’s available cash resources.
These forward-looking statements reflect WellCare’s current views with respect to future events and are based on numerous assumptions and assessments made by WellCare in light of WellCare’s experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors WellCare believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause WellCare or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.
All forward-looking statements included in this filing are based on information available to WellCare on the date of this communication. Except as may be otherwise required by law, WellCare undertakes no obligation to update or revise the forward-looking statements included in this communication, whether as a result of new information, future events or otherwise, after the date of this filing. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to, the following: (i) the risk that regulatory or other approvals required for the Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and WellCare’s resources or otherwise have an adverse effect on WellCare; (ii) the possibility that certain conditions to the consummation of the Transaction will not be satisfied or completed on a timely basis and accordingly the Transaction may not be consummated on a timely basis or at all; (iii) uncertainty as to the expected financial performance of the combined company following completion of the Transaction; (iv) the possibility that the expected synergies and value creation from the Transaction will not be realized, or will not be realized within the expected time period; (v) the exertion of management’s time and WellCare’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for the Transaction; (vi) the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Transaction or that the integration of WellCare will be more difficult or time consuming than expected; (vii) the risk that potential litigation in connection with the Transaction may affect the timing or occurrence of the Transaction or result in significant costs of defense, indemnification and liability; (viii) a downgrade of the credit rating of WellCare’s indebtedness, which could give rise to an obligation to redeem existing indebtedness; (ix) unexpected costs, charges or expenses resulting from the Transaction; (x) the inability to retain key personnel; (xi) disruption from the announcement, pendency and/or completion of the Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and (xii) the risk that, following the Transaction, the combined company may not be able to effectively manage its expanded operations.
Additional factors that may cause actual results to differ materially from projections, estimates, or other forward-looking statements include, but are not limited to, the following: (i) WellCare’s progress on top priorities such as integrating care management, advocating for WellCare’s members, building advanced relationships with providers and government partners, ensuring a competitive cost position, and delivering prudent, profitable growth, (ii) WellCare’s ability to effectively identify, estimate and manage growth, (iii) the ability to achieve accretion to WellCare’s earnings, revenues or other benefits expected, (iv) disruption to business relationships, operating results, and business generally of WellCare, (v) potential reductions in Medicaid and Medicare revenue, (vi) WellCare’s ability to estimate and manage medical benefits expense effectively, including through its vendors, (vii) WellCare’s ability to negotiate actuarially sound rates, especially in new programs with limited experience, (viii) WellCare’s ability to improve healthcare quality and access, (ix) the appropriation and payment by state governments of Medicaid premiums receivable, (x) the outcome of any protests and litigation related to Medicaid awards, (xi) the approval of Medicaid contracts by the Centers for Medicare & Medicaid Services, (xii) any changes to the programs or contracts, (xiii) WellCare’s ability to address operational challenges related to new business and (xiv) WellCare’s ability to meet the requirements of readiness reviews.
This list of important factors is not intended to be exhaustive. WellCare discusses certain of these matters more fully, as well as certain other factors that may affect its business operations, financial condition and results of operations, in its filings with the Securities and Exchange Commission (the “SEC”), including WellCare’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, WellCare cannot give assurances with respect to its future performance, including without limitation its ability to maintain adequate premium levels or its ability to control its future medical and selling, general and administrative costs.
Important Additional Information and Where to Find It
In connection with the WellCare Transaction, on May 23, 2019, Centene filed with the SEC the Registration Statement, which included a prospectus with respect to the shares of Centene’s common stock to be issued in the WellCare Transaction and a joint proxy statement for Centene’s and WellCare’s respective stockholders (the “Joint Proxy Statement”). The SEC declared the Registration Statement effective on May 23, 2019, and the Joint Proxy Statement was first mailed to stockholders of Centene and WellCare on or about May 24, 2019. Each of Centene and WellCare may file other documents regarding the WellCare Transaction with the SEC. This communication is not a substitute for the Registration Statement, the Joint Proxy Statement or any other document that Centene or WellCare may send to their respective stockholders in connection with the WellCare Transaction. INVESTORS AND SECURITY HOLDERS OF CENTENE AND WELLCARE ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CENTENE, WELLCARE, THE WELLCARE TRANSACTION AND RELATED MATTERS. Investors and security holders of Centene and WellCare are able to obtain free copies of the Registration Statement, the Joint Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about Centene and WellCare through the website maintained by the SEC at www.sec.gov. Centene and WellCare make available free of charge at www.centene.com and ir.wellcare.com, respectively, copies of materials they file with, or furnish to, the SEC.
No Offer or Solicitation
This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
SOURCE Centene Corporation
Centene Contacts: Media, Marcela Manjarrez-Hawn, Senior Vice President and Chief Communications Officer, me************@*****ne.com, (314) 445-0790, OR Investors, Edmund E. Kroll, Jr., Senior Vice President, Finance & Investor Relations, in*******@*****ne.com, (212) 759-0382, OR WellCare Contacts: Media, Rhonda Mims, Executive Vice President and Chief Public Affairs Officer, We********************@******re.com, (813) 290-6208, OR Investors, Beau Garverick, Senior Vice President, Corporate Development, Investor Relations and Strategy, be************@******re.com, (813) 206-2329 
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WV MetroNews The Health Plan clarifies that its marriage with WVU Medicine is off – WV MetroNews


The Health Plan clarifies that its marriage with WVU Medicine is off (highlighted)

By Brad McElhinny in News | December 04, 2019 at 4:09PM
CHARLESTON, W.Va. — The Health Plan says its proposed long-term partnership with WVU Medicine is off.
The Health Plan, a managed care organization based in Wheeling, put out a statement on Wednesday titled, “The Health Plan and West Virginia University Health System agree to terminate transactional agreement.”
The bottom line, according to The Health Plan, is the two will no longer become a single entity.
The statement confirmed that the managed care organization on Nov. 27 notified the state Insurance Commission that a deal proposed months ago has been terminated.
“While this effective transaction is no longer moving forward, The Health Plan remains committed to building a statewide integrated healthcare finance and delivery network that will include all major health systems,” the Health Plan stated.
The suggestion of a broader network including all major health systems may align with aspects of a statement put out a day earlier by WVU Medicine.
That statement said the relationship was being re-evaluated but suggested the two organizations were better off in a committed relationship over the long haul.
“Both The Health Plan and WVU Medicine continue to believe that coming together is critical, as both believe they can better manage the healthcare challenges of West Virginia more effectively together than apart,” WVU Medicine stated.
“To that end, they both remain committed to building an integrated healthcare finance and delivery network, one that will allow for the better coordination of care and management of the population’s health.”
But WVU Medicine acknowledged that a proposed partnership between the companies would not be what was described last spring.
“As they continue to work towards that goal, they have agreed to move away from the original transaction and are going back to the drawing board to make sure the partnership is the ultimate win-win and that each is optimally positioned to enter this new model of providing healthcare in West Virginia.”
Under the proposed partnership announced in May, the West Virginia University Health System would have integrated with The Health Plan.
The proposal meant WVU Medicine would have provide the healthcare at nine hospitals, and The Health Plan would provided managed care services for people who are insured through the company.
The resulting healthcare footprint was already having a ripple effect.
Charleston Area Medical Center, another major health care provider, in September informed The Health Plan it would terminate its contract at the end of this year.
At the time, Health Plan President Jim Pennington said CAMC’s decision was a reaction to the partnership with WVU Medicine.
“CAMC sees that as an aggressive play on WVU’s part. In our meeting they called them ‘the northern aggressor’ several times,” Pennington said earlier this year.
Pennington, The Health Plan’s president, announced in October that he intended to step down at the end of the year.
Today’s announcement does not change or affect coverage for anyone insured by The Health Plan who receives services from West Virginia University Health System facilities, the company clarified.

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-Hackensack Meridian Health to merge with Englewood Health


Hackensack Meridian Health commits $400M to Englewood Health in proposed merger

Hackensack Meridian Health and Englewood Health have signed a definitive agreement to merge, the not-for-profit New Jersey health system and hospital announced Tuesday.
Hackensack pledged a $400 million capital investment in Englewood, which executives hope will further Englewood’s position as a tertiary academic hub in northern New Jersey. Those investments include new operating rooms, additional ambulatory care facilities and expanded cardiac catheterization labs, among others.
State and federal officials will need to sign off on the deal, which is expected to be completed in a year.
“We recognize that more and more healthcare is delivered outside of the four walls of a hospital,” said Robert Garrett, CEO of Hackensack Meridian Health.
An expanded ambulatory network will increase access and lower costs, he added.
Hackensack, which has 17 hospitals and an affiliation with Memorial Sloan Kettering Cancer Center, has had a clinical and academic partnership with Englewood since 2015. Englewood Health includes Englewood Health Physician Network, Englewood Health Foundation and Englewood Hospital and Medical Center, which deliver cardiovascular care, neurosciences, oncology, robotic surgery, women’s health and neonatal intensive care, stroke care, thoracic surgery and ambulatory care. They both operate on the Epic electronic health record.
“Hackensack recently opened its first behavioral health urgent care center—those are areas where on your own you could really just scratch the surface, but together you can make the investments necessary to create access and address affordability at the same time,” said Warren Geller, president and CEO of Englewood Health.
Hackensack and Englewood plan to create a regional cardiac surgery program, but that doesn’t mean those services will cease at Englewood, Geller said. It means they will link the patient to the right care in the most effective setting, he said.
The number of independent hospitals, in New Jersey and across the country, continues to wane. Nearly three-quarters of all hospitals were part of multihospital systems in 2017, up from 70.4% in 2012, according to Modern Healthcare Metrics data.
Lower reimbursement rates, declining inpatient admissions, and higher staffing, pharmaceutical and technology costs are weakening margins. More than half the nation’s stand-alone hospitals (53.2%) have lost money on an operating basis each year spanning 2012 to 2017, which is more than twice the share of system-owned hospitals (25.9%), Metrics data show.
Meanwhile, health systems are looking to acquire hospitals in the same or adjacent markets as they claim that scale is necessary to contain costs, improve access to capital, bolster care and boost their leverage with payers and vendors. Economists maintain that health systems often raise prices following mergers and so-called efficiencies are seldom reached given the complexity of integration.
Fellow New Jersey health system RWJBarnabas Health announced a deal to acquire Trinitas Regional Medical Center last week.
“There is no question that many of the independent hospitals in New Jersey have either merged with a larger health network or affiliated to receive the benefits that a large network can bring,” Garrett said, citing potential supply chain savings, better pricing on drugs and supplies, and clinical alignment. But one size does not fit all, he added.
Hackensack, which formed a clinical partnership with St. Joseph’s Health last month, reported an operating income of $274.4 million on revenue of $5.4 billion in 2018, down from $228.2 million of operating income on $4.4 billion of revenue in 2017, according to Modern Healthcare’s financial database.
Englewood’s operating revenue was cut in half in 2018, dropping to $14.5 million on operating revenue of $665.9 million. It reported $32.5 million in operating revenue on $629.9 million of operating revenue in 2017.
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-Community Health Systems Announces Definitive Agreements to Sell Three Virginia Hospitals | Community Health Systems, Inc.


Community Health Systems Announces Definitive Agreements to Sell Three Virginia Hospitals

10/28/19
FRANKLIN, Tenn.–(BUSINESS WIRE)–Oct. 28, 2019– Community Health Systems, Inc. (NYSE: CYH) announced today that affiliates of the Company have signed a definitive agreement to sell three Virginia hospitals – 300-bed Southside Regional Medical Center in Petersburg, 105-bed Southampton Memorial Hospital in Franklin and 80-bed Southern Virginia Regional Medical Center in Emporia, and their associated assets to subsidiaries of Bon Secours Mercy Health, Inc. The transaction is expected to close by the end of 2019, subject to customary regulatory approvals and closing conditions.
About Community Health Systems, Inc.
Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 102 affiliated hospitals in 18 states with an aggregate of approximately 17,000 licensed beds. The Company’s headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol “CYH.” More information about the Company can be found on its website at www.chs.net.
Forward-Looking Statements
Statements contained in this news release regarding potential transactions, operating results, and other events are forward-looking statements that involve risk and uncertainties. Actual future events or results may differ materially from these statements. Readers are referred to the documents filed by Community Health Systems, Inc. with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191028005620/en/
Source: Community Health Systems, Inc.
Investor Contacts:
Thomas J. Aaron, 615-465-7000
Executive Vice President and Chief Financial Officer
or
Ross W. Comeaux, 615-465-7012
Vice President – Investor Relations
Media Contact:
Tomi Galin, 615-628-6607
Senior Vice President, Corporate
Communications, Marketing and Public Affairs
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-California AG rejects Adventist-St. Joseph merger


California AG rejects Adventist-St. Joseph merger

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California Attorney General Xavier Becerra
California regulators have rejected a proposed merger between Adventist Health System/West and St. Joseph Health System that would have created a joint operating company to manage nine hospitals in six largely rural counties in Northern California.
The California Justice Department issued a denial letter Thursday citing concerns that the transaction is not in the public interest, has the potential to increase healthcare costs, and could limit access and availability of healthcare services.
The health systems said the merger would boost access to quality care throughout Northern California, with a focus on vulnerable and underserved populations. They also said the merger would enable their facilities to compete more effectively against Kaiser Permanente, which has a large market share in those six counties even though it has no hospital there.
But the state Justice Department did not agree.
“After careful review, we found this proposal falls short of protecting consumers,” said Sean McCluskie, chief deputy to Attorney General Xavier Becerra.
The health systems indicated they were blindsided by the decision.
“Both Adventist Health and St. Joseph Health are very disappointed in the outcome of this decision,” the systems said in a joint written statement. “Our intent has always been to better serve our communities, increase access to services, and create a stronger safety net for families in northern California. At this time, our organizations will need to take a step back and determine implications of this decision. The well-being of our communities remains our top priority.”
Consumer advocacy groups had objected to the merger, warning that it would raise prices and could limit access to certain services that are prohibited by the Ethical and Religious Directives for Catholic Health Care Services, such as tubal ligations, contraception, gender transition care and physician aid-in-dying.
A transgender patient has a lawsuit pending against St. Joseph, claiming he was discharged from the St. Joseph Hospital in Eureka minutes before a scheduled hysterectomy in 2017, after hospital officials learned he was transgender.
In its response to the suit, St. Joseph said it has a constitutional right to refuse to perform procedures barred by Catholic religious doctrine.
The American Civil Liberties Union of Northern California applauded the state’s decision to bar the merger.
“This is a strong statement by the attorney general that healthcare should be available and accessible to patients,” said Phyllida Burlingame, the group’s reproductive justice and gender equity director. “More than one in six hospital beds in California are already in hospitals like those in the St. Joseph network that deny patients needed reproductive healthcare and gender-affirming care based on doctrine established by Catholic bishops. Californians, particularly those in the rural areas where these hospitals are primarily located, need more access to these essential healthcare services, not less. This decision helps move our state in a positive direction.”
The merger denial contrasts with the same agency’s decision last November to approve the much larger merger of CHI and Dignity Health, two Catholic-affiliated systems which formed CommonSpirit Health earlier this year. That deal also was opposed by the ACLU and a number of other advocacy groups on the grounds that it would raise costs and limit access to certain types of care.
Adventist and St. Joseph had sought to reassure regulators and their religious sponsors that the merger would not change either organization’s mission or religious operating rules. Under the deal, each partner would retain management and control over its own facilities. Neither would be allowed to cause the other to violate its religious rules.
Unlike Catholic-sponsored St. Joseph, Adventist permits contraception, sterilization, in vitro fertilization, and calls itself LGBTQ-friendly. But Adventist, like St. Joseph, does not offer gender transition surgery or participate in physician aid-in-dying.
Anthony Wright, executive director of Health Access California said the proposed merger raised other concerns as well, including potentially higher costs in the already highly concentrated California market.
“Bigger is not often better with hospital chains and health care in general, as consolidation is closely correlated with much higher costs for consumers,” he said.
Correction: The proposed merger involved only nine hospitals. The attorney general’s statement listed one hospital under two names.
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-Sanford Health, UnityPoint Health call off merger


Sanford Health, UnityPoint Health call off $11 billion merger

Watertown SD Nurse photos
Sanford Health and UnityPoint Health nixed their proposed merger that would have formed an $11 billion, 76-hospital system, the organizations said late Tuesday.
The not-for-profit health systems announced their letter of intent to merge in June. The combined entity would have ranked among the top 15 not-for-profit health systems by revenue, with operations across 26 states and more than 83,000 employees.
Kelby Krabbenhoft, the president and CEO of Sanford, said in a statement that the UnityPoint board failed to embrace the vision of a new health system of national prominence.
“We were excited at the opportunity our combination would have provided to create a new health system of national prominence,” he said. “The executive management teams and physicians worked diligently for 18 months to provide a merger recommendation to the boards. We are disappointed that the UnityPoint Health board failed to embrace the vision. Our focus now is on the patients and communities we serve and the 50,000 people working tirelessly to support them.”
Vision represents a long-term view of how the business will operate and how the culture will manifest both within the organization and as it faces patients and stakeholders, said Joe Lupica, chairman of Newpoint Healthcare Advisors.
“When one party says visions don’t align, this means it is not a failure that happened in the trenches,” said Lupica, explaining that it’s something more fundamental than disparate IT systems or fragmented supply chains.
Executives hoped that the merger would have allowed the combined organization to become a world leader in personalized primary care.
“Our organization concluded we can most effectively fulfill our mission by maintaining our existing corporate structure,” Kevin Vermeer, president and CEO of UnityPoint Health, said in a statement.” As a leader in the delivery of value-based care, UnityPoint Health remains strong and competitively positioned for the future.”
It is hard to imagine spending a year and a half on a transaction and having it fall apart, said Robert Creighton, managing partner at Farrell Fritz.
“It makes me think that the preliminary work maybe was not as thorough,” said Creighton, adding that they may have never come to an understanding of what the vision was.
The deal may have been related to a culture clash, mismatched or unmet expectations when it comes to estimated savings benchmarks, their relationships with physicians or other labor-related issues, he said.
“These are incredibly complex (and costly) transactions,” Creighton said. “You have to get all the pieces to fit, and it is not surprising that some deals will fail.”
Sioux Falls, S.D.-based Sanford reported an operating income of $117.1 million on $4.59 billion of operating revenue through the first nine months of fiscal year 2019, up from $92.3 million of operating income on operating revenue of $3.53 billion over the same period last year, according to Modern Healthcare’s financial database.
Last month, Sanford agreed to pay the federal government $20.25 million to settle allegations that one of its neurosurgeons received kickbacks for using implantable devices distributed by his physician-owned distributorship. The settlement also involved hiring a compliance officer and setting up a compliance committee, implementing a risk-assessment program and hiring an independent review organization to oversee Medicare and Medicaid claims at Sanford Medical Center. Sanford denied any wrongdoing.
Des Moines, Iowa-based UnityPoint reported an operating income of $49.4 million on revenue of $2.26 billion through six months of fiscal year 2019—the most recent financial statement available. That was up from $32.8 million of operating income on $2.19 billion of revenue over the same period the year prior. UnityPoint recorded a $21.5 million operating loss in 2017.
While this dismantled deal may throw up a caution flag to other providers exploring mergers, Creighton still expects significant consolidation in the hospital sector given the potential cost and quality benefits of a smaller organization joining a bigger system, he said.
As health systems continue to pursue massive regional and national networks in search of the highly touted benefits of scale, economists and policy experts have cautioned about consolidation’s tendency to raise prices.
Hospital mergers and acquisitions have seemingly cooled in 2019 after several years of significant activity, possibly in part because the projected synergies of scale have not met expectations, hospital M&A experts said. In some cases, health systems rushed into a letter of intent, they said.
Baylor Scott & White Health and Memorial Hermann Health System called off their merger in February, about five months after the Texas-based health systems signed a letter of intent.
M&A experts expected there had been some concern regarding the alignment of their academic missions as well as a mismatch of their physician-management models.
Atrium Health (formerly Carolinas HealthCare System) and UNC Health Care scuttled their deal last year, about six months after the letter of intent was signed.
Cone Health and Randolph Health, also based in North Carolina, called off their deal in May 2018 after more than a year of talks as Cone Health was unwilling to “scale back projects or put them on hold,” Cone Health executives said.
“The savings executives thought they were getting from eliminating redundancies haven’t panned out,” Lupica said.
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Quorum Health considering buyout offer from KKR

MM 1 Sentence Summary- Quorum Health and, private equity firm, KKR talking about buyout which would help Quorum with their debt and decrease in value. 

Quorum Health considering buyout offer from KKR

Quorum Health could be the latest healthcare provider to be gobbled up by private equity investors, if the beleagured chain accepts a buy-out proposal from KKR.
The 24-hospital, publicly traded company has struggled since it was formed in 2016, posting more than $300 million in net losses in 2017 and 2018 combined. Quorum said it’s considering private equity firm KKR’s offer to buy out its public shares held by minority owners for $1 per share. That would value the company at about $33 million, based on the number of outstanding shares as of Nov. 6.
“The fact that they’re being approached with a potential solution, I would think their board would take that very serious, and it sounds like they are,” said Frank Morgan, an analyst with RBC Capital Markets.
The deal would mean that Brentwood, Tenn.-based Quorum join the ranks of other privately held hospital companies, such as Boston-based Steward Health Care.
Quorum’s stock fell 5.6% on Wednesday and has plummeted 80% in the past two years.
“The company’s board of directors will, together with its financial and legal advisors, carefully consider this letter as part of its ongoing engagement with its debt and equity holders,” Quorum wrote in a statement.
KKR currently owns more than 9% of Quorum’s common stock, according to a letter the company wrote to Quorum’s board. The letter also said KKR is the largest holder of Quorum’s outstanding debt. It said the two companies have been in discussions over a potential deal.
In addition to the buy-out, KKR says the deal should include restructuring Quorum’s debt, equitizing the par value of the senior notes and injecting new capital by raising equity from participating noteholders. New capital would be issued as common stock in the recapitalized company and offered to participating noteholders, the letter says. KKR declined to comment beyond the letter.
RBC’s Morgan said Quorum would benefit from having a strong financial partner as opposed to having to renegotiate its debt covenants with banks on its own. He noted the $1 per share offer equates to about 8.4 times Quorum’s projected 2019 earnings before interest, taxes, depreciation and amortization.
“In today’s world, looking at it purely from a valuation perspective, that would seem to be pretty good,” he said.
Quorum, which operates in rural and mid-sized markets, spun off from Franklin, Tenn.-based Community Health Systems in April 2016. Since then, it’s been working to sell off underperforming hospitals to pay down its debt. The company had 38 hospitals when it was spun off.
Quorum has struggled in recent years, posting a $200.2 million net loss in 2018 on nearly $1.9 billion in net operating revenue, compared with a $114.2 million net loss in 2017 on $2 billion in operating revenue, according to Modern Healthcare’s financial database.
Meanwhile, the company’s stock price has shed 73% of its value since the beginning of the year, about 80% in the past two years. It’s currently valued at 85 cents per share.
Quorum’s high debt load and interest expenses severely constrain its cash flow, Moody’s Investors Service wrote in its November downgrade and negative outlook for the company. Difficulty selling off hospitals and implementing efficiency programs will limit Quorum’s ability to improve its near-term performance, the agency said.
KKR is among a long list of private equity firms that have increasingly invested in healthcare assets, especially physician specialty groups. There were 181 private equity deals for all types of physician practices last year, according to a Bloomberg Law analysis.
KKR bought physician staffing company Envision Healthcare Corp. last year in a deal valued at $9.9 billion in cash and debt. Envision had previously been a public company.
Another physician staffing firm, TeamHealth, was purchased by affiliates of the Blackstone Group, one of the country’s largest private equity firms, in 2016.
More broadly, healthcare assets attracted private equity investors at record levels last year, with disclosed deal values surging almost 50% to $63.1 billion in 2018, compared with $42.6 billion in 2017, according to an April report from Bain & Company.
The outsized presence of private equity in healthcare service companies is one reason S&P Global Ratings tends to rate healthcare service providers lower than medical device and pharmaceutical companies, the agency wrote in a January 2018 report. That’s partly because of private equity owners’ tendency to aggressively use debt leverage. S&P noted that private equity investors owned 60% of the health care services companies it rated at the time, compared with just 10% of its pharmaceutical companies and 30% of healthcare equipment companies.
Quorum announced earlier this year it would outsource its revenue cycle management to Chicago-based R1 RCM. Moody’s said that change was one factor behind its negative outlook for the company, as such moves come with high execution risk. Another factor was the difficulty of divestitures and the potential operating disruption that could come from migrating IT and other systems away from the agreement Quorum still holds with CHS over the next 12 to 18 months.
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[Updated] Walmart Health, Amedisys Partner to Expand Home Health Access Nationwide – Home Health Care News

MM 1 Sentence Summary- Walmart and Amedisys partner up and Amedisys will have kiosk in location that explains home health services it provides to patients. 


Walmart Health, Amedisys Partner to Expand Home Health Access Nationwide

September 19, 2019
Amedisys Inc. (Nasdaq: AMED) and Walmart (NYSE: WMT) have entered into a new partnership to expand home health care access nationwide, according to an analyst report from William Blair.
The global investment and wealth management firm has learned that Baton Rouge, Louisiana-based Amedisys is part of the retail giant’s new health care initiative, dubbed “Walmart Health.”
The news comes after Walmart announced its health care push earlier this month. The goal is to provide services from clinic-based primary care and counseling to home-based care and dentistry at a reduced cost, Walmart’s president of health and wellness Sean Slovenski previously told Business Insider.
Already, Walmart has opened its first 10,000 square-foot health center in Dallas, Georgia. The location is adjacent to a Walmart store there.
“We are testing a variety of services with partners in our Walmart Health prototype in Dallas, Georgia,” a Walmart spokesperson told Home Health Care News. “Among them is home health, hospice and personal care, so if a customer has questions or needs information, they can discuss with the on-site partner, Amedisys.”
William Blair analyst Matt Larew provided more details in his Wednesday report. The prototype clinic features an Amedisys kiosk, which is designed to help educate customers and potential patients on the home health services it provides, he wrote.
On top of that — and maybe even more importantly — Amedisys is a care coordination partner and preferred provider for the Walmart Health initiative, according to the report.
“If Walmart Health is successful in redirecting patient flow from the primary care algorithm into its locations, or driving additional patient interactions by providing more convenient access points, Amedisys stands to benefit from any home health referrals generated,” Larew wrote.
That benefit is potentially massive: About 90% of the U.S. population lives within 10 miles of a Walmart, and more than half of the population shops in Walmart weekly. Plus, the company plans to open as many as 200 more health clinic locations over the next several years, the report says.
Specifically, if pilots of the model are successful, Walmart intends to deepen its health presence in Georgia and expand elsewhere in the country.
“In addition, Walmart is the largest self-insured employer in the country,” Larew wrote. “So the disruptive potential of Walmart (and its partners) in health care, in our view, remains vastly underappreciated.”
While the specifics of the partnership are new, those following the retail giant’s health push may have seen the writing on the wall. Last week, Slovenski told Business Insider he was especially interested in partnering with outside companies to provide behavioral health, telemedicine and in-home care services.
“We see these as being a crown jewel of what we want to accomplish in the physical world, in the home, and in the virtual world as well,” Slovenski said.
Amedisys has been making partnership news all summer: In July, the publicly traded home health behemoth struck an agreement with technology company ClearCare Inc. The deal allows Amedisys to partner with personal care companies nationwide to supplement its services without having to acquire new targets.
To date, Amedisys is partnering with more than 700 home care agencies representing 80,000 caregivers nationwide, CEO and President Paul Kusserow told attendees Wednesday at HHCN’s annual summit.