Centene is expanding its role servicing high need populations, buying a majority stake in a home care management company.
St. Louis-based Centene has signed an agreement to acquire a 68 percent interest in the Troy, Michigan based U.S. Medical Management, the manager of the Visiting Physicians Association, for about $200 million.
Along with the new investment, Centene announced the formation of a new holding company connecting Centene and other health service firms like U.S. Medical Management.
"The partnership with USMM is the next step in Centene's strategy to provide a continuum of high quality services that allow us to effectively manage the complex needs of our growing high acuity populations," said Michael Neidorff, Centene chairman and CEO, in a media release.
"The integrated, home-based primary care model is a capability expansion for Centene," Neidorff said, arguing that it will position the firm "to offer quality healthcare services and programs for an aging population in the comfort of their own homes. We believe that there is significant opportunity to enhance access to health services and quality of life for complex populations by removing barriers to receiving care in the home," he said.
Founded in 1993 and employing almost 2,000 nationwide, U.S. Medical Management is the administrative and managerial supporter of the Visiting Physician Association, a company also founded in 1993 that provides a range of medical, supportive, diagnostic and hospice care to about 50,000 seniors and homebound patients in Colorado, Florida, Indiana, Kentucky, Michigan, Missouri, Ohio, Texas, Virginia and Wisconsin. U.S. Medical Management also owns Pinnacle Senior Care, Grace Hospice, The Home DME and Visiting Podiatry.
Centene, which has about 150,000 high acuity members in seven of the states serviced by USMM and Visiting Physicians, is financing the $200 purchase with about $66 million in cash and the rest in stock. Annually, Centene said it's expecting the new stake in U.S. Medical Management to add $220 to $240 million in revenue.