Anthem Reportedly in Talks to Buy CareCentrix

Dealmaking rumors continue to swirl this week.

In the latest piece of M&A gossip, Anthem Inc. (NYSE: ANTM) is reportedly in “late-stage” talks to acquire the PE-backed CareCentrix, according to PE Hub. Rumors of a possible CareCentrix deal come just days after reports surfaced about Centerbridge Partners and Vistria Group going after Wellspring Capital Management’s Help at Home.

Hartford, Connecticut-based CareCentrix provides a variety of post-acute and home-based care services, in addition to discharge management support and durable medical equipment (DME).

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“The COVID crisis has underscored how important home health is to the future of health care,” Kenneth Baer, a CareCentrix spokesperson, told Home Health Care News in an email. “Based on that and the strength of our business, we have received many interesting inquiries, but we are focused on delivering better health for the thousands of patients who rely on us for care.”

For Anthem, a potential acquisition of CareCentrix would further build out the insurer’s care delivery capabilities, particularly around gap-filling palliative care services. Anthem previously acquired Aspire Health — the nation’s largest non-hospice, community-based palliative care provider — in 2018.

CareCentrix just recently expanded into palliative care through its play for Turn-Key Health in May. Turn-Key Health, a portfolio company of Consonance Capital Partners, is a community-based palliative care organization.

Heightened interest in palliative care from Medicare Advantage plans was one of the main reasons behind that acquisition, Melissa Carr, CareCentrix VP and general manager of home services, previously told HHCN.

More than 60 MA plans across the country are offering in-home palliative care as a supplemental benefit in 2020, according to an analysis by ATI Advisory.

“We’ve seen tremendous growth, especially within Medicare Advantage payers, in the last couple of years,” Carr told HHCN in May. “There is interest amongst Medicaid and commercial payers as well. There’s growing evidence of palliative care’s ability to decrease the total cost of care while improving patient and caregiver experience. We think it’s a great time to enter the market.”

CareCentrix was originally looking to secure a $1 billion valuation in a prospective deal, PE Hub reported, citing sources familiar with the discussions. The outlet says that asking price has now come down to the $600 million to $700 million range.

According to PE Hub, Anthem has not been the only payer interested in CareCentrix. Another was apparently close to landing CareCentrix, but walked away.

Outside of palliative care, CareCentrix — backed by private equity firm Summit Partners — has also been positioning itself for more managed care action. In July, the company announced it had hired Scott Markovich to serve as CareCentrix’s general manager of Medicaid.

“[Before this], they’d never had programs for Medicaid, specifically,” Markovich told HHCN at the time of the announcement. “The company is, without question, making a pivot to invest more in Medicaid.”

Anthem did not respond to a request for comment from HHCN prior to publishing this story.

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