Health Care
3:50 pm
Thu July 25, 2013

Insurance Giant Humana To Buy Key Player In Medicaid Program

Credit medicaid.gov

As Florida prepares to move forward next month with shifting thousands of seniors into Medicaid managed-care plans, Humana, Inc., announced that it will buy a major player in the program.

Humana reached agreement to acquire American Eldercare, Inc., which has received contracts to provide Medicaid long-term care services to seniors throughout the state, according to a Humana news release Wednesday. American Eldercare also has been the largest provider in the state's longstanding "nursing home diversion" program.

The announcement came little more than a week before the first phase of the state's controversial effort to shift almost all Medicaid beneficiaries into managed-care plans. That first phase, which will happen Aug. 1, involves seniors who need long-term care and live in Orange, Osceola, Seminole and Brevard counties.

American Eldercare and three other managed-care plans --- Coventry Health Care of Florida, Sunshine State Health Plan and UnitedHealthcare of Florida --- have received contracts to compete in that central Florida region.

The state Agency for Health Care Administration will gradually expand the managed-care program to other regions of the state, first for seniors who need long-term care and later adding the broader Medicaid population.

In the news release, Humana said it expects to close the deal to buy American Eldercare by the fourth quarter of this year. Terms of the deal were not disclosed, but the release pointed to what is expected to be a large amount of growth for American Eldercare.

"Annualized revenues for American Eldercare of approximately $75 million are anticipated to increase to over $1 billion in 2015,'' the release said.

AHCA spokeswoman Michelle Dahnke said Thursday the agency had been "fully informed" on the pending sale, which she said should not have any effect on people in the Medicaid program.

The basic thrust of shifting seniors into managed-care plans is to provide services that will allow them to stay in their homes and communities, rather than placing them in more-expensive nursing facilities. That also has been the concept behind the nursing-home diversion program.

Florida lawmakers in 2011 approved the shift to statewide Medicaid managed-care and required AHCA to award varying numbers of contracts in 11 regions of the state. The Delray Beach-based American Eldercare, which is a type of managed-care plan known as a "provider service network," was the only long-term care provider to get contracts in all of the regions.

Humana, meanwhile, received long-term care contracts in three regions of northeast Florida and South Florida. AHCA is expected to award contracts in September to managed-care plans that will oversee services for the broader Medicaid population, and Humana also is seeking contracts in that portion of the program.