This is Jacob Emerson with the Becker's Payer
Issues podcast.
Here is your biweekly industry news briefing for
July 29th.
Optum is closing clinics in multiple states and
laying off 524
employees across California.
According to regulatory documents filed July 18th, the
UnitedHealth Group company will terminate those employees in
California
starting September 16th through January of 2025
at clinic and administrative office locations in the
Bay Area and Southern California.
The layoffs include some roam remote employees in
other states. At Optum California's corporate office in
El Segundo,
64 employees will be laid off. Another 157
employees will be laid off at an office
in Cerritos.
Landmark employees began posting on social media begin
July 18th regarding a large reduction in force
they say occurred nationwide.
Optum described permanent closures at an additional 15
addresses in California, including urgent and primary care
clinics, infusion services, facilities, and medical groups. Across
those facilities, 303
employees will be terminated.
Well, the justice department is pointing to antitrust
scrutiny for why Optum backed out of its
planned acquisition
of Steward Healthcare's physician group Stewardship Health.
Steward, which filed for chapter 11 bankruptcy back
in May, is working to offload its 31
hospitals alongside Stewardship Health. Steward was also recently
hit with a criminal investigation
by Stewardship Health. Steward was also recently hit
with a criminal investigation by federal prosecutors at
the US attorney's office in Boston.
Optum backing out of acquiring Stewardship Health comes
amid an antitrust investigation that the DOJ opened
into UnitedHealth Group back in February.
The investigation is partially looking into Optum's physician
group acquisition and how the health plan and
physician unit ownerships impact competition.
Optum employs or is affiliated with more than
90,000
physicians.
Well, Centene says it will exit a handful
of state Medicare Advantage markets in 2025.
On a July 26th investor call, its CEO,
Sarah London, said the exits are designed to
align with the company's company's
longer term strategy. She said, we think the
team has done a really good job in
terms of thoughtfully designing bids consistent with our
long term strategy
even in a challenging bright year. We're being
thoughtful about how to streamline that book further
in alignment with our Medicaid footprint because that's
where the puck is going. Centene is focused
MA plans for beneficiaries duly eligible for Medicaid
and Medicare.
Other payers said they have also planned to
exit the MA markets in 2025 as they
face rising medical costs and a tougher reimbursement
environment.
Humana CFO, Susan Diamond, said in April that
the company anticipates leaving some markets in
2025 and expects a decline in membership. A
similar message came from CVS Health executives earlier
this year.
Molina Healthcare has more acquisition opportunities in the
pipeline. That's according to its CEO.
In July, Molina said it plans to acquire
ConnectiCare, a subsidiary of EmblemHealth
in New York City,
for $350,000,000.
On a July 25th earnings call with investors,
Molina CEO Joseph Zebratsky said the ConnectiCare acquisition
is a departure from its previous mergers and
acquisitions strategy.
Historically, the company has only established marketplace and
Medicare lines in areas where Molina already operates
Medicaid businesses.
Medicare
operates Medicare Marketplace and some commercial plans in
Connecticut.
Connecticut would be the 2nd major acquisition for
Molina in less than a year. Back in
January, the company closed on its purchase of
Bright Health Care's Medicare Advantage Business for $500,000,000
adding over 100,000
members to its ranks.
Over 80% of Molina's 5,600,000
total members are within the Medicaid business
through its past due though its past due
acquisitions were not Medicaid plans, they are still
core acquisitions for Molina's business according to mister
Zubretsky. And he said they have a very
active pipeline of Medicaid acquisition opportunities on the
horizon,
hopefully over the next 12 to 18 months.
Well, Humana is partnering with Google Cloud on
cloud infrastructure
and AI capabilities. The agreement builds on a
previous partnership between Humana and Google to develop
population health solutions.
The financial terms of that deal was not
disclosed, but they're hoping that can make contact
centers more responsive, provider networks simpler to navigate,
health care coverage easier to understand, and primary
care better tailored to individual needs.
Centene is selling collaborative health systems to Astra
Health for an undisclosed
amount. CHS is based in Tampa, Florida. It's
a management services subsidiary that partners with independent
primary care physicians
around value based care models. It currently has
it currently works with a 129,000
beneficiaries
across 17 states.
Astrana, it's formerly called ApolloMed. They offer technology
solutions that enable providers to participate in value
based arrangements. They work with 10,000 providers and
1,000,000 patients.
Pending regulatory approvals, that deal with Centene is
expected to close by the end of
2024.
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