This week Anthem announced it has entered an agreement with InnovaCare Health to acquire its Puerto Rico-based subsidiaries, including MMM Holdings and its Medicare Advantage plan, MMM Healthcare, as well as affiliated companies and a Medicaid plan.
InnovaCare Health is an integrated, value-based payer and provider service organization, and a portfolio company of global growth equity investor Summit Partners.
Financial terms of the transaction were not disclosed. The acquisition is expected to close by the second quarter of 2021 and is subject to approval by the Commonwealth of Puerto Rico regulatory authorities, standard closing conditions and customary approvals required under the Hart-Scott-Rodino Antitrust Improvements Act.
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The company's 2021 EPS guidance remains unchanged.
WHAT'S THE IMPACT?
MMM, a vertically integrated healthcare organization, is Puerto Rico's largest MA plan. With more than 267,000 MA members and more than 305,000 Medicaid members, MMM represents the ninth-largest MA plan in the country and second-largest Medicaid plan on the island of Puerto Rico.
MMM boasts a network of specialized clinics and wholly-owned independent physician associations including Castellana Physicians Services and PHM, as well as independent IPAs. Together, the MMM network includes more than 10,000 providers and more than a dozen offices across Puerto Rico.
MMM holds the only 4.5 Star MA contract in Puerto Rico from the Centers for Medicare and Medicaid Services.
THE LARGER TREND
Insurers are doing well in the Medicare Advantage market, and consumers also like the plans that come with additional benefits to original Medicare. A Medicare Advantage study published in December found that more consumers chose MA plans for 2021 due to the plans' supplemental benefits, including those for telehealth and COVID-19.
ON THE RECORD
"We are pleased to expand Anthem's commitment to serve Medicare and Medicaid-eligible individuals and consumers to Puerto Rico," said Anthem President and CEO said Gail K. Boudreaux. "We remain focused on providing services that drive greater value while giving members access to care and services that meet their diverse needs, enhance their experience, and help them lead healthier lives."
"This transaction aligns with Anthem's vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve," said Felicia Norwood, EVP and president of the government business division of Anthem. "Our approach to the whole-health needs of our members and a focus on addressing the social drivers of health will enable us to make a positive difference in the health of our communities."