Signify Health — a technology-enabled health care services provider — and Remedy Partners — a software company that aligns providers in “episode-based” bundled payment models — have signed a definitive agreement to merge.
Financial terms of the deal were not disclosed.
Together, the companies — which are both portfolio companies of New York City-based private equity firm New Mountain Capital — have a combined revenue of more than $600 million with strong double-digit revenue growth, according to a press release announcing the news.
The goal of the merger is to improve patient care and efficiency in bundled payment models in Medicare fee-for-service and managed care alike, according to Nathan Goldstein, chief product officer of Signify Health.
Signify Health’s team of about 9,000 mobile doctors and nurses who visit patients in their homes will supplement Remedy Partners’ current services to help make it happen, Goldstein told Home Health Care News.
“We see an exciting opportunity to use the deeply unique Signify mobile field force of nurses and physicians to improve outcomes for patients in episodes and help the government meet its goals in Bundled Payments for Care Improvement (BPCI),” Goldstein said. “And through our longitudinal complex care management services and solutions to address social determinants, help our other insurance partners meet goals around improving the efficiency of care and the quality of the experience for their members.”
Currently, health care providers can choose to participate in BPCI. Those who choose to do so enter into payment agreements based largely on financial and performance outcomes. Multiple providers are then paid for coordinating the treatment of a patient for a single episode of care, of which there are 48 eligible types.
That’s where Remedy Partners comes in: The Norwalk, Connecticut-based company helps the providers working together to manage a single episode of care to make sure they’re aligned.
Remedy aids the initiator of the episode — for example, a hospital — in identifying skilled nursing facilities, rehab centers, home health agencies and other provider partners that will best manage the care and cost of the patient for the rest of the episode. Then, Remedy gets all the providers on the same operating platform for the purposes of managing the bundle.
As part of the merger, Dallas, Texas-based Signify will then send doctors and nurses into the home of patients when appropriate to supplement care.
“Signify is not looking to replace any of the participants in the bundle today,” Goldstein said. “We’re looking to support them to make the bundle perform better.”
A large part of that comes down to addressing social determinants of health.
In March, Signify acquired the technology company TAV Health, which it rebranded as Signify Community, “the first and only social determinants of health (SDOH) solution that ties social interventions to outcomes,” according to a release announcing the news.
That’s just one of Signify’s tech solutions designed to streamline care in the home.
Annually, Signify Health and Remedy Partners see a total of more than one million members in the home. Additionally, together, they manage more than 600,000 episodes of care and address more than 25 million social determinants of health for more than 3 million members.
“Both these companies believe that if you focus on the experience of the patient and use technology to unlock that care experience, the whole system will benefit,” Goldstein said.
The merger is already underway and in its early stages, he added.
Kyle Armbrester, CEO of Signify, will head up the new company as CEO, while Steve Senneff, chief financial officer at Remedy Partners, will serve as president and CFO of the combined business.
Goldstein did not speculate on future rebranding, saying “we’re focused on our clients and product at this time.”
The merger is made easier in part because Signify and Remedy have been collaborating clinically, technologically and operationally since early this year, Goldstein said.
“Our common capital partner, New Mountain, … began to see the tremendous opportunity to combine the two more formally,” Goldstein said. “We are in direct discussions jointly with a number of national payers and major regional health systems who have given tremendous validation to the thesis of the combination.”
While participation in bundled payment models is currently voluntary, providers may see a lot more of it: Health and Human Services (HHS) Secretary Alex Azar announced last November that he would explore mandatory bundled payment models in Medicare fee-for-service going forward.
Goldstein also identified them as an important part of the future.
“Bundled payments and episode care is one of the places where health care is going,” he said. “We believe it’s one of the most powerful tools for bringing our fragmented system into alignment around a beneficiary. That’s the key.”