Humana looks to buy clinics from private equity partner for up to $550M

Dive Brief:

  • Humana expects to pay between $450 million and $550 million to acquire the first group of senior-focused primary care centers that it developed through a joint venture with Welsh, Carson, Anderson & Stowe, Chief Financial Officer Susan Diamond said Friday during the insurer’s investor day.
  • The agreement inked with Welsh Carson in 2020 included options for Humana to acquire the private equity firm’s interest in the joint venture in stages over the next five to 10 years. The venture was expected to open 67 clinics by early 2023. “We are planning for the full acquisition of centers built in partnership with Welsh Carson through our put and call options beginning in 2025,” Diamond said.
  • In mid-May, Humana and Welsh Carson announced a second joint venture that will spend up to $1.2 billion to open about 100 new value-based primary care clinics for Medicare patients between 2023 and 2025 under the CenterWell Senior Primary Care brand.

Dive Insight:

Humana is accelerating into primary care by expanding its chain of clinics serving Medicare patients into more markets.

The payer in May said it expected to operate about 250 clinics, under the CenterWell and Conviva Care Solutions brands, by the end of 2022. The total is up from 214 as of March, including 37 through its partnership with Welsh Carson and 177 wholly owned centers.

Humana expects to boost its total number of clinics by 30 to 50 per year through 2025, with up to 15 to 25 being added through acquisitions, Diamond said. The remaining about 30 per year will be added through joint ventures with Welsh Carson.

“We will continue to be focused and strategic in considering M&A opportunities as we look to extend our CenterWell capabilities with a particular focus on growing our primary care and home businesses,” Diamond said.

Longer term, Humana plans to spend a total of $2.5 billion to $3.5 billion from 2026 to 2030 on clinic expansion as it accelerates its level of annual builds, she said.

Humana currently has CenterWell clinics in Georgia, South Carolina, Florida, North Carolina, Texas, Kansas, Missouri, Nevada and Louisiana, according to the company’s website.

Like the first joint venture, Humana’s second collaboration with Welsh Carson includes a series of put and call options through which Humana may acquire the PE firm’s interest in the partnership. Under the agreement, Humana could acquire Welsh Carson’s stake in the second joint venture beginning in 2028, or five years after the opening of each set of clinics, or the firm could require Humana to buy its interest beginning in 2030, or seven years after each group of clinics opens.

In addition to the primary care centers, the CenterWell brand includes Humana’s home health and pharmacy businesses.

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Amazon, Walmart among hundreds of employers, health groups urging Senate to extend telehealth flexibilities

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Dive Brief:

  • A group of 375 organizations sent a letter to the Senate on Tuesday urging lawmakers to act to pass legislation extending COVID-19-era telehealth flexibilities for another two years.
  • The letter was led by health IT and telehealth lobbies, but also joined by a number of health systems including Ascension and Cleveland Clinic, physician groups including the American Medical Association, tech companies including Amazon and Google and large employers including Walmart.
  • Without action, the policies — which threw open the doors to telehealth and led to skyrocketing utilization in the early days of the pandemic — will expire 151 days after the end of the COVID-19 public health emergency.

Dive Insight:

The letter asks the Senate to extend telehealth flexibilities for both Medicare and commercial market patients, including waiving provider and patient location limitations, lifting in-person requirements for telemental health and allowing providers to continue prescribing controlled substances via virtual care.

It also asks lawmakers to take steps to increase access to telehealth in the commercial market, including allowing people with high-deductible health plan health savings accounts to access telehealth coverage without first meeting annual deductibles.

Telehealth use snowballed in the first year of the pandemic. More than 28 million Medicare beneficiaries — roughly two in five — used virtual care in that year. In total, beneficiaries used 88 times more telehealth services in COVID-19’s first year than in the year prior, according to government data.

Telehealth interests are racing to shore up access as pandemic tailwinds ease. Though telehealth use has dropped from its 2020 highs, studies show a sustained level of demand among consumers for virtually delivered care.

The potential for waste and abuse is a sticking point for some lawmakers mulling expanded telehealth access, though a recent HHS report found telehealth fraud is relatively rare.

The House recently passed a two-year extension of telehealth flexibilities, though the Senate has yet to take up the bill. Meanwhile, physicians are urging the CMS not to decrease payment rates for telehealth services next year, after reimbursing virtual care visits at the same rate as in-office visits during COVID-19.

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Period tracker Flo launches anonymous mode amid post-Roe privacy concerns

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Dive Brief:

  • Period tracking app Flo has rolled out an anonymous mode to protect users’ sensitive reproductive health data months after the U.S. Supreme Court overturned Roe v. Wade.
  • The company, which has dominant market share with 48 million monthly users and has faced regulatory scrutiny over privacy in the past, pledged to release the mode shortly after the court’s decision.
  • The new anonymous mode gives users the option to use the app without their name, email address or technical identifiers associated with their health data.

Dive Insight:

The Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization overturned decades of precedent and threw the nation’s healthcare system into chaos. The ruling gave rise to a patchwork system of reproductive health access in the U.S., and concerns among pro-abortion activists and privacy advocates that states could use data from period tracking and other reproductive health apps against patients seeking abortion services.

In the wake of the decision, a number of popular women’s health apps pledged to enhance their privacy and security protocols, including Flo. The U.K.-based women’s health app launched its anonymous mode Wednesday for all iOS users. The company said Android users will get access next month.

To secure patients’ data, Flo partnered with security firm Cloudflare to integrate a system ensuring no single party that processes user data for anonymous mode accounts has complete information on who the user is or what they’re trying to access. That’s on top of steps Flo has already taken, including encrypting all data and passcode protection to lower risk of unauthorized app access, the company said.

“Women’s health information shouldn’t be a liability,” Cath Everett, VP of product and content at Flo, said in a statement. “Now, more than ever, women deserve to access, track, and gain insight into their personal health information without fearing government prosecution.”

The company doesn’t have a spotless track record when it comes to keeping user data in-house. Last year, the Federal Trade Commission finalized a settlement with Flo requiring it to obtain user consent before sharing their personal health information, after finding Flo shared sensitive health data from millions of users with marketing and analytics firms including Google and Facebook.

Flo is offering anonymous mode as an option and not as a default because there are some downsides to the setting. Once anonymous mode is activated, users won’t be able to recover their data if their device is lost or stolen, and it may limit personalization benefits, the company said.

Democrats in Washington have been taking a harsher line on data privacy in a post-Roe world.

In July, the House Oversight Committee began investigating how the business practices of reproductive health apps and data brokers could potentially weaponize consumers’ private information, and the FTC pledged to crack down on medical and location data sharing, following an executive order from President Joe Biden.

One month later, the agency sued Idaho-based data broker Kochava for selling geolocation data that could be used to track consumers’ locations, including to and from sensitive areas like reproductive health clinics.

But advocates say the administration could be doing more. On Tuesday, dozens of Democrat senators asked the HHS to safeguard women’s privacy through the Health Information Portability and Accountability Act, by restricting providers from sharing patients’ reproductive health information without their explicit consent. However, it’s unclear how much the administration could lean on HIPAA to protect abortion data without congressional action.

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