Press & News

Aetna Completes Acquisition of Coventry Health Care, Inc

Tuesday, May 7, 2013

HARTFORD, Conn.–BUSINESS WIRE– announced it has completed its acquisition of Coventry Health Care, Inc., a diversified managed health care company based in Bethesda, Md.

Aetna now projects full-year 2013 operating earnings per share of $5.70 to $5.85,(1) an increase of $0.20 to $0.25 per share due to the completion of the Coventry acquisition. Aetna’s previous projection was $5.50 to $5.60 of operating earnings per share.(1) Aetna will host a brief conference call today at 5 p.m. ET to provide details on its combined company projections for 2013. At that time, an updated summary of Aetna’s full-year projections will be made available on the Investor Information section of

“The successful completion of our acquisition of Coventry presents new opportunities for Aetna and supports our strategy for growth in the changing health care marketplace,” said Mark T. Bertolini, Aetna’s chairman, CEO and president. “Together, we are well positioned – competitively, strategically and financially – to meet the evolving needs of the people we serve.”

The acquisition builds on Aetna’s existing resources and capabilities, and increases the company’s mix of business in higher-growth Government programs. As a result of the acquisition, Aetna has added approximately 3.7 million medical members and 1.5 million Medicare Part D members. In addition, Aetna’s Medicaid business has grown from 1.1 million members to more than 2 million members, and its Medicaid footprint has expanded from 12 to 16 states. Bertolini continued, “An integral part of Aetna’s growth strategy is to enhance the depth and breadth of our core insurance business while increasing our presence in the fast-growing government sector, all toward expanding our relationships with local providers. Coventry helps us realize these goals.”

The public may access the conference call through a live audio webcast available via Aetna’s Investor Information link on the Internet at Financial and other information, including any GAAP reconciliations, related to the conference call also will be available on Aetna’s Investor Information website. A replay of the call may be accessed through Aetna’s Investor Information link on the Internet at or by dialing 1-888-203-1112, or +1-719-457-0820 for international callers.

Anyone listening to Aetna’s call and/or webcast is encouraged to read Aetna’s 2012 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the first quarter of 2013 and Coventry’s Quarterly Report on Form 10-Q for the first quarter of 2013, each on file with the Securities and Exchange Commission, including the discussion of risk factors contained therein and the discussion of Aetna’s historical results of operations and financial condition contained in Aetna’s filings.


UnitedHealth buys 2 Florida health plans

JACKIE CROSBY – Star Tribune February 28, 2012

UnitedHealth Group said Tuesday that it is buying two Florida-based health plans that focus on seniors, continuing its pattern of growth by acquisition. In separate deals, the Minnetonka-based company picked up Preferred Care Partners and Medica HealthCare Plans, companies that sell insurance and operate hospitals and clinics in south and central Florida. Terms were not disclosed.

United Healthcare, which is the insurance division of UnitedHealth Group, already leads the nation in number of enrolled customers and in providing insurance for seniors. The company claims to cover one in five of the country’s Medicare recipients. The purchases of Preferred Care and Medica (no affiliation to the Minnetonka-based nonprofit plan) will enhance UnitedHealthcare’s offerings in Florida, where it provides access to a network of more than 21,000 physicians and 161 hospitals, according to the company.

“Preferred Care and Medica each combine a strong record of providing quality, affordable health care coverage to Floridians with solid relationships with physicians and other health care providers,” Gail Boudreaux, CEO of UnitedHealthcare, said in a statement. UnitedHealth, a Fortune 50 company with more than $102 billion in revenue last year, has acquired 85 companies since 2000. Earlier this month is it closed a deal for XLHealth, a health plan for special-needs seniors, that is expected to add about $2 billion to revenues and 5 cents to net earnings per share in 2012. The company’s fast-growing services arm, Optum, has bought doctors’ groups and physician management operations in recent years.

Miami-based Preferred Care covers about 50,000 seniors on Medicare and about 5,000 low-income or disabled Floridians receiving Medicaid. As part of the deal, UnitedHealthcare also will take over operation of six primary care centers in Miami-Dade and Broward Counties. Medica, based in Coral Cables, Fla., has about 35,000 Medicare members and 7,200 Medicaid beneficiaries. It has two medical centers in Coral Gables and Hialeah, Fla. The purchase is expected to be completed later this year.


Survey: Health insurance costs surge in 2011

TOM MURPHY – AP Business Writer September 27, 2011

INDIANAPOLIS (AP) — The cost of employer-sponsored health insurance surged this year, snapping a trend toward moderate growth, but experts say these increases may slow again in 2012.

Annual premiums for family coverage climbed 9 percent and surpassed $15,000 for the first time, according to a report released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums for single coverage rose 8 percent compared to 2010. That growth compares to increases last year of 3 and 5 percent for family and single coverage, respectively. The study does not delve into why rates jumped in 2011, but foundation CEO Drew Altman said a number of factors may have played a role. He noted that health care costs continue to rise. Insurer profits and the health care overhaul also have some impact. Companies and workers split premiums for employer-sponsored coverage, the most common form of health insurance in the United States. Businesses likely reacted to these cost increases by freezing retirement account contributions or giving a flat wage or smaller increase to their workers, said Helen Darling, CEO of the National Business Group on Health, a nonprofit organization that represents large employers on health care issues. “(Workers) basically are giving their pay raise to the health system,” said Darling, who was not involved with the Kaiser study. “It’s really bad news.”

The annual study was conducted earlier this year and includes results from more than 2,000 companies across the country. It also indicates that many more families than previously believed have benefited from a popular provision in President Barack Obama’s health care overhaul allowing young adults to stay on a parent’s health plan until they turn 26. Kaiser asked employers how many people were added to their insurance plans because of this provision and estimated that 2.3 million young adults enrolled. Last week the government had reported that the number of uninsured young adults had dropped by nearly 1 million since the law took effect, a finding independently corroborated by Gallup.

The difference isn’t necessarily a contradiction.

The Kaiser survey may have counted young adults who were covered by a more expensive policy and switched to their parent’s plan to save money. The overhaul aims to eventually cover millions of uninsured people. Altman said initial provisions from the law, which was passed last year, added about 1.5 percent to this year’s premiums, which is about what many insurance analysts and benefits experts expected. Many workers are about to receive notices from their employers regarding health insurance coverage for next year. Altman said he cannot say whether this year’s increase represents a bad omen for 2012 or if it is just a one-year blip.

Insurers have been saying for months that health care use has grown more slowly this year, something industry observers pin on the sluggish economy. Altman and other benefits experts say that could lead to lower premium increases next year, since insurers base their rates in part on how often people use care. Benefits consultant Mercer said earlier this month an employer survey it did shows that 2012 health insurance costs will rise by the smallest amount since 1997.


Summary Box: Survey finds 2011 employer-sponsored health insurance costs surge, breaking trend.

By The Associated Press | AP – Wed, Sep 28, 2011

RISING RATES: A Kaiser Family Foundation study shows that the cost of employer-sponsored health insurance surged 9 percent for family coverage and 8 percent for singles this year, snapping a trend toward moderate growth.

WHY: The study doesn’t explore why rates increased, but Kaiser officials note that the cost of care continues to rise, and the health care overhaul played a relatively small role in the increase.

WHY THIS MATTERS: Employer-sponsored coverage is the most common form of health insurance in the United States, and big jumps in insurance costs means workers may see flat wages or smaller increases.


Goldman Sachs Urban Investment Group and Pharos Capital Group Invest In Leading Medical Management Services Company In South Florida

New York, NY, Miami, FL and Nashvilie, TN H January 10, 2006 — MCCI Holdings, LLC (“MCCI”), a South Florida-based provider of medical management selvices for managed care organizations, announced today a transaction with the Goldman Sachs Urban Investment Group (“UIG”), Pharos Capital Group, LLC (“Pharos”) and GE Healthcare Financial Sewices (“GE”). Goldman Sachs, Pharos and GE Healthcare Financial Sen/ices invested an undisclosed sum in the recapitalization of privately-held MCCI Holdings to facilitate the Company’s organic growth and to provide capital for future acquisitions. GE also provided the investor group with a senior credit facility and credit line as part of the transaction.

MCCI is a leading provider of integrated outpatient health care services in South Florida’s Miami-Dede, Broward and Palm Beach counties. The Company primary care services to over 43,000 Medicare, Medicaid and commercial beneficiaries on behalf of managed care organizations. MCCI differentiates itself by providing superior preventative and urgent care to its patients and focusing its clinical model on improving the overall health of its membership base.

Driven by an aging population, healthcare spending in the US. has increased dramatically over the past four decades. It is expected to continue to increase over the next decade primarily through growth in Medicare and Medicaid. The Congressional Budget Office expects that Medicare expenditures will rise at a compounded annual growth rate of 9.3%, from approximately $372 billion in 2006 to approximately $909 billion in 2016.

Since 1997, Medicare beneficiaries have had the option to receive care on a fee—for-service basis with no network or provider restrictions, or to enroll in a managed care program, now known as Medicare Advantage (“MA”). In 2005, nationwide Medicare Advantage penetration, expressed as a percentage of total Medicare eligible beneficiaries who belong to a Medicare Advantage plan, was approximately 13%. Medicare Advantage penetration is anticipated to grow to almost 30% by 2013, according to the Henry J. Kaiser Famiiy Foundation. MCCI is well positioned to benefit from the projected increase in MA penetration, as the Company has proven its ability to maintain cost controls while providing quality healthcare to its patients.

“The completion of this transaction provides MCCI the ability to further invest in and improve the quality of care provided at our facilities. We welcome Goldman Sachs and Pharcs as our newest partners and look forward to building and growing MCCI together,” said Dr. Jose Armas, Chairman and Chief Executive Officer of MCCI Holdings. “We also look fonvard to partnering with our existing managed care payers to enter new markets beyond the South Florida area,” stated Dr. Armas.

Martin Chavez, Managing Director at Goldman Sachs said, “We are very pleased to have the opportunity to work with MCCI’s management team. We believe MCCI is well positioned for strong and continued growth clue to the Company’s superior primary care model, and we look forward to helping the Company achieve its strategic growth plans. We believe our investment in MCCI represents an attractive opportunity to benefit from the anticipated growth in medical services of an elderly population compounded by the growth of the Hispanic population in South Florida and other markets.” UIG is the primary vehicle through which Goldman Sachs provides long-term capital for both corporations operated or owned by ethnic minorities and real estate developers targeting urban communities. UIG seeks to invest up to $50 million of equity per transaction. The group also looks to work with top-quality companies that are driven by strong and experienced management teams.

“MCCI represents a growth opportunity in a growth market and we are pleased to be invested in taking the company to the next level. The MCCI business model has strong potential for South Florida as well as other communities with growing elderly populations and we look forward to working with management and our partners to achieve future growth and continued success,” said Bob Crants, Managing Partner of Pharos Capital.

Florida is the second largest Medicare Advantage state, behind California, and is the fourth largest HMO market in the US. behind California, New York, and Pennsylvania. Over 640,000 individuals are enrolled in MA plans out of approximately 3.} million Medicare beneficiaries, and approximately 4.4 million individuals are enrolled in HMOs out of a total population of 17.8 million. According to the U.S. Census Bureau, the Florida population is projected to grow 20.5% from the years 2000 to 2010, as compared to only 9.8% growth for the total U.S. population. Population growth among Florida residents who are 65 years of age or older is expected to grow 21.8% from the years 2000 to 2010, and 49.4% from the years 2010 to 2020, as compared to 15.0% and 35.8% respectively for the U.S. as a whole.

The Hispanic population represents an important demographic segment in South Florida. In aggregate, the total Hispanic population is over 1.7 million in South Florida with over 1.2 million, 270,000, and 140,000 Hispanic individuals in Miami-Dade, Broward and Palm Beach counties, respectively. The Medicare-eligible Hispanic population in Florida is projected to grow 29.2% from 2000 to 2025. MCCI is positioned well to serve this growing group of Medicare-eligible beneficiaries through its extensive network of physicians, affiliated physician groups and specialists, many of whom are bilingual. The large Hispanic population in the South Florida region is expected to drive growth among MA enrollees. According to the US. Census Bureau, 14.1% of Florida residents between the ages of 65 and 85 are Hispanic. This same figure is only 7.3% nationally.


Palm Beach Health Associates Acquired By MCCI Holdings

Miami, FL, New York, NY, and Nashville, TN — February 11, 2008 — MCCI Holdings, LLC (“MCCI”), a South Florida-based provider of medical management services for managed care organizations, announced today the acquisition of Palm Beach Health Associates, Inc. (“PBHA”). MCCI acquired the privately-held Palm Beach Health Associates for an undisclosed sum. Goldman Sachs Urban Investment Group (“UIG”), Pharos Capital Group, LLC (“Pharos”) and the MCCI management team are among the existing investors in MCCI.

Palm Beach Health Associates, Inc. is a leading provider of primary care physician services in Palm Beach County, Florida. PBHA was founded in 1998 by a group of physicians and currently provides medical services to over 9,000 Medicare beneficiaries enrolled in Humana plans. PBHA differentiates itself by providing superior preventative and urgent care to its patients and focusing its clinical model on improving the overall health of its membership base.

The combined organization will have over 56,000 members and a significant market position in Palm Beach, Dade and Broward counties. The acquisition complements and solidifies MCCI’S existing presence in Palm Beach County.

“We are excited about the opportunity to add PBHA to the MCCI family of medical centers,” said Dr. Jose Armas, Chairman and Chief Executive Officer of the combined companies. “MCCI’s acquisition of PBHA exemplifies our commitment to delivering high-quality, technologically advanced care to a diverse population. The combined companies will be uniquely positioned to support market-leading health plans, physicians, and hospitals in providing exemplary care to patients.”


Leon Medical Center’s health plan sold for $3.8 billion

By John Dorschner

The national health insurer Cigna purchased the holding company that owns Miami’s Leon Medical Centers Health Plans in a $3.8 billion deal. National health insurance giant Cigna on Monday announced the $3.8 billion purchase of the holding company that owns Miami-Dade’s Leon Medical Center’s Medicare insurance plan. The Nashville-based holding company, HealthSpring, runs Medicare health maintenance organizations in a half-dozen states. In 2007, it spent $400 million to purchase Leon Medical Centers Health Plans. The plan’s 37,000 members get most of their treatment at seven Leon Medical Centers, which continue to be owned and operated by the Leon family. “This will be a great opportunity for our members,” said Benjamin Leon Jr., founder of the medical centers and health plan and a board member of HealthSpring. “We will be working with a much stronger partner.” Any changes will not be seen for months. Open enrollment in Medicare Advantage plans, as Medicare HMOs are called, started Oct. 15. The deal is expected to close during the first six months of 2012, Cigna said.

Cigna Chief Financial Officer Ralph Nicoletti told The Herald the purchase is a major move into the Medicare Advantage market, an area where the Loomfield, Conn., company has not been strong. He said Cigna was attracted by HealthSpring’s “unique collaborative relationships with physicians that provide incentives for good outcomes at good value.” Nicoletti said he “couldn’t even begin to speculate” on whether the Leon health plan would continue to be marketed under its own name, but “we are very conscious” of HealthSpring’s successful operations, and “we want to be very careful not to disrupt that.”, the U.S.-government website for consumers, ranks the Leon plan at four stars (out of five), measuring 36 areas including screenings to stay healthy, managing chronic conditions, membership overall satisfaction, handling members’ calls and how often members choose to leave the plan. Cigna is buying into a model of clinics traditionally favored by Cuban-Americans with an emphasis on primary care — along with cafecitos and pastelitos. Leon started Clinica Cubana in Little Havana in 1964, when the monthly charge was $5 for a family. His newer clinics have emphasized bubbling fountains and white-gloved doormen greeting patients who arrive in free transportation via Leon vans.

In 2009, the prestigious trade journal Health Affairs featured Leon as one of four organizations nationwide in an article titled “American Medical Home Runs.” The article praised Leon for emphasizing primary care and keeping costs 15 to 20 percent below the national average. On Monday, Leon said the clinics’ reach continues to grow. The latest effort involves expanding the Little Havana clinic by 60 percent, meaning it will be able to serve 4,500 to 5,000 new members in addition to the 7,500 already there.



Jackson Health System sells Medicaid plan to Fernandez-owned company

By John Dorschner

Jackson’s board approved the sale of its troubled Medicaid insurance business to Simply Healthcare, a Mike Fernandez-owned company. Jackson Health System’s board agreed Wednesday to negotiate the sale of its failing Medicaid insurance business to Simply Healthcare, a new insurer whose main investor is a close friend of Jackson’s chief executive, Carlos Migoya. Migoya told the board he was friends with several Simply shareholders, but it was the only company that had offered any money to take over the 12,000 Medicaid recipients in the JMH Health Plan, which consists of insurance HMOs offered by the system. The Medicaid portion consists of many high-risk patients that caused plan losses of $14.3 million so far this calendar year.

Under the proposed deal, Simply will pay Jackson up to $2.5 million and absolve Jackson of a potential $3 million more in losses. Until Simply came along, Jackson planned to abandon the Medicaid business without any payment. Miguel “Mike” Fernandez, Simply’s leading shareholder, said, “They recognize that a health plan is not Jackson’s core business. … I’ve turned around 11 companies that were supposed to be beyond redemption. … This is another way that the private sector can assist Jackson through its turnaround.” The board approved by a vote of 3-1 a motion to allow Migoya to negotiate and execute a deal with Simply. State regulators need to accept the sale before its final. The dissenting vote came from Darryl Sharpton, who objected to the sudden emergence of the deal. Migoya said a tentative agreement had been reached only at 5:30 a.m. Wednesday when Fernandez sent him a text message. Board Chairman Marcos Lapciuc strongly supported the arrangement to wind out the losing parts of the JMH Health Plan — a move that includes transferring all Jackson employees and dependents to AvMed starting Jan. 1. “This health plan business is basically driving us insane.” Lapciuc said the health plan was a “nightmare” for Jackson, which has lost more than $400 million the past three years. Last month, Migoya asked — and the board approved — dropping its Medicaid plan. He said the problem was that only the sickest patients — including some with HIV/AIDS — had signed up for the plan. For every $1,400 a patient in the plan cost Jackson, the state Medicaid program paid $1,000.

At first, Jackson executives thought dropping the patients would gain no benefit, but the state said it could seek a buyer for its Medicaid plan. Migoya said Jackson approached five insurers. Three showed no interest. A fourth offered to take the patients but offered no cash. Simply Healthcare offered to pay $625,000 in cash, plus another $1.8 million if certain conditions were met over the next year. The company also offered to take over the patients on Nov. 1. Since the state required a 60-day notification to patients before dropping them, Migoya calculated that Simply’s takeover would save Jackson about $3 million in losses over that period.

In the past year, Fernandez, a veteran health insurance executive, has built up Simply Healthcare Holdings quickly, growing from 22 to 170 employees supervising coverage of 54,000 persons, including many that had been members of money-losing plans. Jackson board members were told that one reason why Simply could succeed where Jackson had failed was that the JMH Health Plan had University of Miami doctors and hospitals in its network — and the UM contracts required high payments from JMH. Simply does not use UM providers. “I recognize an expensive restaurant when I see it,” said Fernandez Wednesday. He’s a UM trustee and strong supporter of the university, but said there’s no reason why all customers have to eat in expensive restaurants. Migoya said Jackson can use all the cash it can get. “We live from hand to mouth every day.” On Sept. 30, Jackson had 16 days of cash on hand. That figure would have been considerably worse, but the system delayed paying $15 million in vendors’ bills, said Chief Financial Officer Mark Knight.

In other news, the Jackson board was told that an internal investigation of psychiatric patients who went to the emergency room showed a 97 percent error rate in 25 patients surveyed, which caused Jackson to be underpaid $150,000 on Medicare and Medicaid claims. The problem is being corrected, executives said.


Healthcare swims against layoff tide in Miami-Dade


Construction leads the list of Miami-Dade’s job losers, while healthcare is way ahead of the hiring pack during the last four years. Don’t just be thankful for your health. Be thankful for the healthcare industry. For an upcoming story on construction employment, I calculated the jobs lost and gained during the last four years in Miami-Dade County. Almost all industries employ fewer people than they did in August 2007. The big exception: health care.

Employment Change  Share 
Construction -24,533 28.2%
Manufacturing -13,300 15.3%
Financial Activities -12,367 14.2%
Administrative and Waste Services -9,067 10.4%
Wholesale Trade -7,167 8.2%
Retail Trade -4,533 5.2%
Local govt -4,100 4.7%
Information -4,067 4.7%
Transportation, Warehousing, and Utilities -3,067 3.5%
Professional and Technical Services -2,000 2.3%
Other Services -1,667 1.9%
Management of Companies and Enterprises -600 0.7%
Natural Resources and Mining -300 0.3%
Federal -133 0.2%
State govt 1,400 6.3%
Leisure and Hospitality 7,067 32%
Education and Health Services 13,600 61.6%

Combined with the private education industry, healthcare added 13,600 jobs since August 2007, according to federal labor statistics. About three-fourths of that came from hospitals, health clinics and doctor offices. The government doesn’t break out the education jobs separately, but clearly most of the gains came from health care. This is partially thanks to the larger share of elderly residents in Miami-Dade, and partially thanks to the fact that government entitlements help insulate healthcare providers from economic downturns. Since so few industries added jobs in the last 48 months, the healthcare and education category accounts for 62 percent of all jobs created since the summer of 2007. On the other end of the spectrum: construction. It has shed almost 25,000 jobs since the summer of 2007, accounting for about one out of every four lost payroll slots in the last four years. More on that later in the week.