Anthem Inc. (NYSE: ANTM) is bolstering its home-based care capabilities.
The Indianapolis-based health insurer announced Wednesday that it has entered into an agreement to buy myNEXUS Inc., a technology-enabled company that manages home-based care for payers. Financial terms of the agreement were not disclosed.
“Providing timely care for members in their homes allows for both excellent personalized care as well as the comfort of being in preferred environments,” Dr. Prakash Patel, president of Anthem’s diversified business group, said in a statement.
Anthem has steadily invested in its in-home care strategy over the past few years. In addition to acquiring community-based palliative care provider Aspire Health in 2018, the insurer has formed multiple working relationships with in-home care organizations Papa, Heal and others.
At the same time, Anthem and a number of its affiliated health plans have also embraced the home care-related supplemental benefits flexibility for Medicare Advantage (MA) granted by the U.S. Centers for Medicare & Medicaid Services (CMS) under the Trump administration.
“Bringing the right level of whole-person care into the home has been demonstrated to improve outcomes, reduce readmissions and improve members’ and their family’s experience of well-being,” Patel added.
Once the myNEXUS acquisition is completed, Anthem will be able to better leverage its existing infrastructure to serve its members in the home, potentially keeping them out of the hospital and costlier health care settings. Moving forward, Anthem will also have access to myNEXUS’ nationwide network of high-performing home health providers and nurse agencies.
Currently, myNEXUS delivers integrated clinical support services for about 1.7 million MA members across 20 states. Alongside its technology platform and advanced-analytics capabilities, myNEXUS has a clinical staff of more than 250 health care professionals who help plan and optimize home-based care.
Anthem has had a relationship with myNEXUS since 2017, a spokesperson for the insurer told Home Health Care News. The company currently manages about 830,000 of Anthem’s MA and group retiree members.
Anthem is acquiring myNEXUS from an investor group led by WindRose Health Investors, a New York-based health care private equity firm. The deal is expected to close in the second quarter of this year, subject to customary closing conditions.
After closing, myNEXUS will operate as a wholly owned subsidiary of Anthem, joining the insurer’s diversified business group. The Brentwood, Tennessee-based myNEXUS first launched in 2014.
For myNEXUS, joining Anthem allows the company to expand its focus as it continues to rethink how care is delivered in the U.S.
“The myNEXUS team is thrilled to be partnering with Anthem to build upon the value we deliver to our customers and their members,” Juan Vallarino, CEO of myNEXUS, said in a statement. “The strength of Anthem’s diversified business group platform will allow us to broaden our capabilities as we strive to transform how quality health care is delivered to the people we serve.”
Vallarino — a former HCA Healthcare executive who previously served on the myNEXUS board of directors — assumed the role of CEO in December 2019. He replaced co-founder and former CEO McArthur VanOsdale, who stepped down as myNEXUS transitioned from a startup phrase to a more mature health care company.
Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) is one of myNEXUS’ largest home health provider partners. The two announced a collaborative partnership in 2018 aimed at boosting quality outcomes and lowering total cost of care for MA plans.
“Quality clinical programs, outstanding patient outcomes and a solid value proposition are the cornerstone of our home health care solutions,” Amedisys executive Christy Vitulli said at the time. “Quality and affordability are top of mind, and the opportunity with myNEXUS allows us to focus on patient outcomes, increase the predictability of care in the home, and better align payor, provider and patient goals.”
Anthem’s Aspire Health and myNexus similarly announced a home health-focused collaboration in 2018.
Additionally, just before the COVID-19 pandemic, myNEXUS likewise announced a partnership with the American Academy for Home Care Medicine, an industry association dedicated to advancing the delivery of health care services in the home.
Wednesday’s myNEXUS announcement comes roughly six months after reports surfaced that Anthem was in “late-stage talks” to acquire CareCentrix, another technology-enabled in-home care coordination company that works with payers.
A deal between Anthem and CareCentrix never materialized, however. By November of 2020, CareCentrix had reportedly shelved its sale process, according to PE Hub.
Anthem, which saw its stock value rise 2.63% as of mid-day trading Wednesday, noted that its planned myNEXUS purchase will not impact its 2021 EPS guidance. Analysts from Stephens described the acquisition as “an attractive next move” in the build-out of Anthem’s diversified business group.
On a high level, Wednesday’s news reflects the broader trend of payers investing in home-based care to improve quality while reducing their spend. The trend has been apparent for some time, but has since accelerated due to the public health emergency and its related financial challenges.
Health insurers posted hefty profits in early 2020, as their members opted to delay care to minimize COVID-19 exposure. But as coronavirus-related costs and hospitalization figures started to rise, most insurers saw their financials slip.
Anthem, for example, ended the fourth quarter of 2020 with profits of $551 million, down 41% from $934 million in Q4 2019.