Anthem to acquire MMM Holdings from InnovaCare Health
Transaction to close in second quarter of 2021; Expands insurer’s coverage in Puerto Rico’s Medicare, Medicaid programs
SAN JUAN — Anthem Inc. announced Tuesday that it has entered into an agreement with InnovaCare Health L.P., to acquire its Puerto Rico-based subsidiaries, including MMM Holdings LLC (MMM) and its Medicare Advantage (MA) plan, MMM Healthcare LLC, as well as affiliated companies and Medicaid plan.
“We are pleased to expand Anthem’s commitment to serve Medicare and Medicaid-eligible individuals and consumers to Puerto Rico,” Anthem Inc. President and CEO Gail K. Boudreaux said in a press release, which said that MMM is one of the fastest-growing healthcare organizations in the United States. “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.”
The transaction, whose price was not disclosed, is expected to close by the second quarter of 2021 and is subject to approval by Puerto Rico regulatory authorities, standard closing conditions and customary approvals required under the Hart-Scott-Rodino Antitrust Improvements Act, according to the press release, which added that Anthem’s “2021 earnings per share (EPS) guidance remains unchanged as a result of this acquisition.”
Anthem (NYSE:ANTM) stock rose by $6.43, or 2.2 percent, to close at $298.99 in New York Stock Exchange trading on Tuesday.
MMM is the island’s largest MA plan and the ninth-largest MA plan in the United States. The medical insurer, established locally in 2000, has more than 267,000 MA members. Private MA insurers are hired by the Centers for Medicare and Medicaid Services (CMS) to provide expanded Medicare coverage to seniors. The island has the highest participation of MA beneficiaries in the United States, at approximately 75 percent.
MMM is one of the four managed care organizations (MCOs)—including First Medical, Plan de Salud Menonita and Triple-S—that have contracts with the Medicaid- and commonwealth-subsidized Vital program to cover some 1.1 million medically indigent people residing on the island. MMM covers 305,000 Medicaid members, making it the second-largest Medicaid plan on the island.
The MMM network includes more than 10,000 healthcare providers and more than a dozen offices across Puerto Rico. MMM holds the only 4.5 Stars MA contract in Puerto Rico from CMS.
“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, head of the Government Business Division for 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.”
Anthem’s legal advisers are White & Case LLP and Faegre Drinker Biddle & Reath LLP. Credit Suisse is acting as lead financial adviser and J.P. Morgan Securities LLC is also acting as financial adviser for InnovaCare. Kirkland & Ellis LLP and Epstein Becker & Green P.C. are acting as legal advisers for InnovaCare.
Anthem serves more than 107 million people, including approximately 43 million within its family of health plans.
Indianapolis-based Anthem’s operating revenue was $31.5 billion in the fourth quarter of 2020, an increase of $4.4 billion, or 16.2 percent, versus the prior year quarter, driven by higher premium revenue due to growth in Medicaid and Medicare. Medical enrollment totaled approximately 42.9 million members at Dec. 31, 2020, an increase of 1.9 million, or 4.7 percent from Dec. 31, 2019.
The company, formed when WellPoint Health Networks Inc. and Anthem merged in 2004, is an independent licensee of the Blue Cross and Blue Shield Association serving members in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin; and specialty plan members in other states.