Humana Announces Agreement to Acquire SeniorBridge

Leading care-management and in-home care provider helps seniors stay healthier and stay in their homes

LOUISVILLE, Ky.--(BUSINESS WIRE)--Humana Inc. (NYSE: HUM) announced today it has signed an agreement to acquire SeniorBridge, a New York-based chronic-care provider best known for providing in-home care for seniors. Terms were not disclosed.

“Both of our companies are dedicated to ensuring the lifelong well-being of seniors. Together, Humana and SeniorBridge can transform how we care for adults with chronic conditions to help them stay safely at home.”

Since its founding in 2000, SeniorBridge has been managing complex chronic care for seniors across the U.S. SeniorBridge’s care-management teams of nurse practitioners, nurses, social workers and certified caregivers help seniors maintain and improve their health while remaining in their homes. A typical SeniorBridge patient is 65 or older and has multiple chronic conditions.
“SeniorBridge fills a growing market need and is consistent with Humana’s focus on delivering clinical care for seniors in their homes,” said Michael B. McCallister, Humana’s Chairman and Chief Executive Officer. “Acquiring SeniorBridge will immediately expand Humana’s existing clinical capabilities with the addition of SeniorBridge’s national network of 1,500 care managers. The company does a terrific job of reducing hospital readmissions and emergency-room utilization, all while helping seniors achieve lifelong well-being.”
“We are excited to join the Humana family,” said Eric Rackow, M.D., President and Chief Executive Officer of SeniorBridge. “Both of our companies are dedicated to ensuring the lifelong well-being of seniors. Together, Humana and SeniorBridge can transform how we care for adults with chronic conditions to help them stay safely at home.”
While SeniorBridge’s current focus is private-pay customers, Humana also intends to fully leverage SeniorBridge’s capabilities across Humana’s current health plan membership – especially with Humana’s Medicare members and growing population of members enrolled in Special Needs Plans by seeking the appropriate certification as a Medicare provider.
Professional senior-care services can greatly improve health outcomes, alleviate stress and increase function. When patients with complicated medical, functional and cognitive conditions receive care coordination in the home by specially trained geriatric care managers, hospitalizations and emergency-room admissions can be substantially reduced.
“With SeniorBridge services available for Humana members in the years ahead, Humana will enable more seniors to stay in their homes while spending less for their overall care,” said Paul Kusserow, Humana’s Chief Strategy and Corporate Development Officer. “The acquisition will also increase Humana’s clinical knowledge and strengthen the company’s offerings for members with complex chronic-care needs – expanding the continuum of care options for its sickest members.”
Current demographic trends indicate an increased need for a depth of care-management services available to seniors. As the baby boomer generation ages into Medicare, the 65+ population is expected to grow from more than 40 million today to 55 million by 2020 and 72 million by 2030.^* Meanwhile, people are developing more chronic conditions – 73 percent of people who are 65 or older have two or more chronic conditions.^**
Through its Humana Cares division, Humana has strong programs in place to provide care management to chronically ill members. SeniorBridge will enable Humana to provide care services directly, particularly to support activities of daily living (i.e. eating, dressing) and instrumental activities of daily living (i.e. housework, money management, grocery shopping). This combination of care management and custodial care services will enhance Humana’s ability to meet the holistic needs of seniors, their families and caregivers.
The acquisition also demonstrates Humana’s commitment to grow its overall Health and Well-Being Services segment, as the company’s in-home-care reach will expand with SeniorBridge joining Humana.
SeniorBridge’s 2011 revenue is projected to be approximately $72 million. The transaction is subject to both state and federal regulatory approvals and is expected to close in the first half of 2012. Humana’s acquisition of SeniorBridge is not expected to have a material impact on Humana’s financial earnings guidance for the year ending December 31, 2012.
* Source: U.S. Commerce Department, Bureau of the Census
** Source: The Robert Wood Johnson Foundation analysis of 2006 Medical Expenditures Survey
Cautionary Statement
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in investor presentations, press releases, Securities and Exchange Commission (SEC) filings, and in oral statements made by or with the approval of one of Humana’s executive officers, the words or phrases like “expects,” “anticipates,” “intends,” “likely will result,” “estimates,” “projects” or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, among other things, information set forth in the “Risk Factors” section of the company’s SEC filings, a summary of which includes but is not limited to the following:

• Health insurance reform legislation, including The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, could have a material adverse effect on Humana’s results of operations, including restricting revenue, enrollment and premium growth in certain products and market segments, increasing the company's medical and administrative costs by, among other things, requiring a minimum benefit ratio, lowering the company’s Medicare payment rates and increasing the company’s expenses associated with a non-deductible federal premium tax; financial position, including the company's ability to maintain the value of its goodwill; and cash flows. In addition, if the new non-deductible federal premium tax is imposed as enacted, and if Humana is unable to adjust its business model to address this new tax, there can be no assurance that the non-deductible federal premium tax would not have a material adverse effect on the company’s results of operations, financial position, and cash flows.
• If Humana does not design and price its products properly and competitively, if the premiums Humana charges are insufficient to cover the cost of health care services delivered to its members, or if its estimates of benefit expenses are inadequate, Humana’s profitability could be materially adversely affected. Humana estimates the costs of its benefit expense payments, and designs and prices its products accordingly, using actuarial methods and assumptions based upon, among other relevant factors, claim payment patterns, medical cost inflation, and historical developments such as claim inventory levels and claim receipt patterns. These estimates, however, involve extensive judgment, and have considerable inherent variability that is extremely sensitive to payment patterns and medical cost trends.
• If Humana fails to effectively implement its operational and strategic initiatives, including its Medicare initiatives, the company’s business may be materially adversely affected, which is of particular importance given the concentration of the company’s revenues in the Medicare business.
• If Humana fails to properly maintain the integrity of its data, to strategically implement new information systems, or to protect Humana’s proprietary rights to its systems, the company’s business may be materially adversely affected.
• Humana is involved in various legal actions and governmental and internal investigations, including without limitation, an ongoing internal investigation related to certain aspects of its Florida subsidiary operations, the outcome of any of which could result in substantial monetary damages, penalties, fines or other sanctions. Increased litigation or regulatory action and any related negative publicity could increase the company’s cost of doing business.
• Humana’s business activities are subject to substantial government regulation and related audits for compliance, including, among others, existing audits regarding Medicare risk adjustment data. New laws or regulations, or changes in existing laws or regulations or their manner of application, including the methodology that may be used by the government in implementing results of risk adjustment audits, could increase the company’s cost of doing business and may adversely affect the company’s business, profitability and financial condition. In addition, as a government contractor, Humana is exposed to additional risks that may adversely affect the company’s business or the company’s willingness to participate in government health care programs.
• On February 25, 2011, the Department of Defense TRICARE Management Activity, or TMA, awarded the TRICARE South Region contract to Humana. On March 7, 2011, the competing bidder filed a protest of the award with the Government Accountability Office. Also on March 7, 2011, as provided in the Federal Acquisition Regulations, TMA issued a stop work order to Humana in connection with the award. On June 14, 2011, the GAO upheld the award of the contract to Humana and TMA subsequently lifted the stop work order. On June 21, 2011, the competing bidder filed a complaint in the United States Court of Federal Claims objecting to the award of the contract to Humana. On October 14, 2011, the Court upheld the award of the contract to Humana, and the competing bidder has until December 13, 2011, to appeal it in the Court of Appeals for the Federal Circuit. As a result of the award of the TRICARE South Region contract to the company, Humana no longer expects a goodwill impairment to occur during the second half of 2011. Ultimate disposition of the contract award is, however, subject to the resolution of any additional actions the unsuccessful bidder may take.
• Any failure to manage administrative costs could hamper Humana’s profitability.
• Any failure by Humana to manage acquisitions and other significant transactions successfully may have a material adverse effect on its results of operations, financial position, and cash flows.
• If Humana fails to develop and maintain satisfactory relationships with the providers of care to its members, the company’s business may be adversely affected.
• Humana’s home-delivery pharmacy business is highly competitive and subjects it to regulations in addition to those the company faces with its core health benefits businesses.
• Changes in the prescription drug industry pricing benchmarks may adversely affect Humana’s financial performance.
• If Humana does not continue to earn and retain purchase discounts and volume rebates from pharmaceutical manufacturers at current levels, Humana’s gross margins may decline.
• Humana’s ability to obtain funds from its subsidiaries is restricted by state insurance regulations.
• Downgrades in Humana’s debt ratings, should they occur, may adversely affect its business, results of operations, and financial condition.
• Federal government contracts account for a substantial portion of Humana’s revenue and earnings. A delay by Congress in raising the federal government’s debt ceiling, should it occur, could lead to a reduction, suspension or cancellation of federal government spending that could, in turn, have a material adverse effect on Humana’s business and profitability.
• Changes in economic conditions could adversely affect Humana’s business and results of operations.
• The securities and credit markets may experience volatility and disruption, which may adversely affect Humana’s business.
• Given the current economic climate, Humana’s stock and the stock of other companies in the insurance industry may be increasingly subject to stock price and trading volume volatility.

In making forward-looking statements, Humana is not undertaking to address or update them in future filings or communications regarding its business or results. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed herein may or may not occur. There also may be other risks that the company is unable to predict at this time. Any of these risks and uncertainties may cause actual results to differ materially from the results discussed in the forward-looking statements.
Humana advises investors to read the following documents as filed by the company with the SEC for further discussion both of the risks it faces and its historical performance:

• Form 10-K for the year ended December 31, 2010;
• Form 10-Q for the quarters ended March 31, 2011, June 30, 2011, and September 30, 2011;
• Form 8-Ks filed during 2011.

About SeniorBridge
SeniorBridge is a leading national care management company with an 11-year heritage in helping people cope with the challenges of complex chronic illnesses such as congestive heart failure, chronic obstructive pulmonary disease, Parkinson’s disease, and Alzheimer’s disease. The company’s 44 offices and national care management network works with families, physicians, hospitals and health plans to address the total well-being of its clients through a comprehensive process of care assessment, planning, coordination and advocacy. The company is headquartered in New York City and benefits from the support of its advisory board of internationally known experts in geriatrics.
For more information about SeniorBridge, visit www.seniorbridge.com.
About Humana
Humana Inc., headquartered in Louisville, Kentucky, is a leading health care company that offers a wide range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being. By leveraging the strengths of its core businesses, Humana believes it can better explore opportunities for existing and emerging adjacencies in health care that can further enhance wellness opportunities for the millions of people across the nation with whom the company has relationships.
More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

• Annual reports to stockholders
• Securities and Exchange Commission filings
• Most recent investor conference presentations
• Quarterly earnings news releases
• Replays of most recent earnings release conference calls
• Calendar of events (including upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors)
• Corporate Governance information

Contacts

Humana Investor Relations
Regina Nethery, 502-580-3644
rnethery@humana.com
or
Humana Corporate Communications
Tom Noland, 502-580-3674
tnoland@humana.com

CMS survey shows high satisfaction rates for Medicaid and CHIP

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs

MEDICAID NEWS

FOR IMMEDIATE RELEASE                       Contact: CMS Media Relations Group

November 8, 2011                                                                   (202) 690-6145

CMS survey shows high satisfaction rates for Medicaid and CHIP
Satisfaction Rates Higher than in Employer Sponsored Coverage

             

Parents of children with Medicaid and Children’s Health Insurance Program (CHIP) coverage are showing high satisfaction with their access to doctors and the quality of health care, according to a survey announced today by the Centers for Medicare & Medicaid Services (CMS).

“These results show how Medicaid and CHIP are making a positive difference in providing high quality care and peace of mind for families,” said CMS Administrator Donald Berwick, M.D. 

Findings from the report, “Parents’ Views of CHIP and Medicaid: Snapshot of Findings From a Survey of Low-Income Parents,” was announced at the fall meeting of the National Association of Medicaid Directors. 

Highlights of the survey of more than 1,900 parents with family incomes below 250 % of the federal poverty line include:

·        Positive Views of Medicaid and CHIP: Seven in ten surveyed say the Medicaid and CHIP programs are very or somewhat good. 

·        Higher Satisfaction with Medicaid and CHIP than Employer Coverage: 66 percent of low-income parents surveyed were very satisfied with the Medicaid and CHIP programs, compared with 48 percent of low-income parents who said they were very satisfied with employer coverage. 

·        High Quality of Care with Medicaid and CHIP: 66 percent of Medicaid and CHIP parents were very satisfied with the quality of care compared to 55 percent with employer coverage. 

·        Access to Care with Medicaid and CHIP:

o   62% of families with a child covered under Medicaid or CHIP were very satisfied with the ease of finding a doctor to take the child’s insurance, as compared with 58% of families with employer coverage.

o   57 percent of parents were very satisfied with how quickly they could get an appointment with a medical doctor under Medicaid and CHIP compared to 53 percent with employer coverage.

·        Medicaid and CHIP Provide Peace of Mind, Affordability: 71% of parents say a very motivating factor for enrolling their child in Medicaid or CHIP is “getting peace of mind.”  Seventy percent (70%) of parents whose children were enrolled in the programs at the time of the survey said they were very motivated to enroll by finding out that the coverage was something they could afford. 

“This survey amplifies the voice of consumers, and we are listening,” said Cindy Mann, director of the Center for Medicaid and CHIP Services.  “We continue to work on streamlining the enrollment process and on providing families a variety of ways they can apply for Medicaid and CHIP coverage. A growing number of states are offering online applications, which parents say they want. CMS is supporting efforts to create and refine online applications so that we can offer the best customer service possible.”

CMS is supporting state efforts to create and refine online applications through Children’s Health Insurance Program Reauthorization Act (CHIPRA) outreach grants and enhanced matching funds to States to support information technology improvements. These and other efforts are helping enroll more eligible children in the Medicaid and CHIP programs, for example the percent of eligible children enrolled grew from 82.1 to 84.8 from 2008 to 2009. 

The Affordable Care Act contained a number of provisions designed to expand and improve Medicaid and CHIP.   Most adults under age 65 with incomes up to 133 percent of the federal poverty level (FPL) - $14,500 for an individual and $29,700 for a family of four in 2011 will be eligible for Medicaid. Children will be eligible for either Medicaid or CHIP at higher income levels based on eligibility standards already in effect in their state. Proposed rules, issued by CMS on August 12, implement the policy to provide significant federal funding for states to fill the gaps in coverage for low-income people.  The proposed rules establish a high degree of coordination between Medicaid, CHIP and the new Affordable Insurance Exchanges.  People will be allowed to apoply for coverage on line, in person, by mail or by phone through one simplified, streamlined application.

As Medicaid programs and providers prepare to cover more patients in 2013, the Affordable Care Act requires States to pay primary care physicians no less than 100 percent of Medicare payment rates in 2013 and 2014 for primary care services, which will be fully funded by the federal government.  States are also eligible for some funding to help provide care management and coordination services, as well as for programs to help people with disabilities live in the community.  For more information, visit www.HealthCare.gov.

The survey was conducted with 1,936 parents of children under age 19 in households where the income is below 250 percent of the federal poverty level, and included parents of uninsured children, those with a child in Medicaid or CHIP, and those covered under their parents’ employer coverage.  The margin of error on total results in the survey was + 2.2 percentage points. 

For more information on the survey results, please visit:    

http://www.insurekidsnow.gov/professionals/CHIP-Medicaid-Survey-Topline.pdf.

New Funding Available for Next Generation of Health Care Innovations

Medicare’s Dec. 7th Open Enrollment deadline nears

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs

MEDICARE NEWS

 

Medicare’s Dec. 7^th Open Enrollment deadline nears

Ongoing resources are available for seniors and people with disabilities

to compare coverage options

 

As the December 7^th deadline grows closer for people with Medicare to change or choose their drug and health plan coverage for next year, the Centers for Medicare and Medicaid Services and its network of partners and advocates are available to assist with counseling and enrolling beneficiaries on their choices for 2012.  With just weeks remaining in the Annual Enrollment Period, Medicare’s popular consumer resources – www.medicare.gov and 1-800-MEDICARE – are assisting beneficiaries, their families, partners and trusted representatives.

 

“Seniors and people with Medicare should act now, review their plan coverage and compare their current plan with other available options,” said CMS Administrator Donald M. Berwick, M.D.  “The important decisions you make now can help ensure that any changes made will be in place by January 2012 for seamless and uninterrupted access to your healthcare providers and medications at your chosen pharmacies.”  

 

CMS recently mailed Medicare & You handbooks and postcards to more than 42 million households reminding them of the December 7th deadline. This year, as beneficiaries look over their available plan options, they will see better value in the Medicare Advantage (Part C) and Prescription Drug (Part D) plan benefits.  Medicare Advantage enrollees are now assured of the same access as other Medicare beneficiaries to certain Medicare-covered preventive services at zero cost-sharing, including an Annual Wellness Visit.  On average, Medicare Advantage premiums will be four percent lower in 2012 than in 2011, and plans expect enrollment to increase by 10 percent.

 

Beneficiaries with Part D coverage who are in the coverage gap, or “donut hole,” will continue to receive 50 percent discounts on covered brand name drugs thanks to the Affordable Care Act.  Beneficiaries have seen an average savings of $581 on covered brand name drugs, and an additional $22 in savings on generic drugs – yet another reason to compare and choose the drug plan that best fits a patient’s needs. Average premiums for Part D prescription drug plans will also decrease to $30 in 2012, about 76 cents less compared to the average 2011 premium.  The premium amount is based on bids submitted by Part D plans for the 2012 plan year.   Benefits in 2012 remain consistent with those offered in 2011.

 

“Before the December 7th deadline, we urge all people with Medicare to focus on Open Enrollment and compare costs, coverage and their satisfaction with their current coverage with options for 2012,” Berwick said. “Once you compare plans, if your current plan satisfies your needs for next year, you don’t need to do anything.  If other options are a better match for your needs, there is still time to change.”

 

Medicare’s Open Enrollment season continues to generate high levels of activity on 1-800-MEDICARE with our unbiased customer service agents, and our popular web-based resource: www.medicare.gov.  People with Medicare and their trusted representatives have used the web-resources from their homes or at counseling events around the country.  Nationally, enrollment opportunities are available:   

 

·    Online: Since the beginning of Open Enrollment (October 15) , online activities have surpassed 26 million page views across the Medicare Plan Finder web tool and open enrollment sections of www.Medicare.gov.

·        On the phone: 1-800-MEDICARE (1-800-633-4227) continues to be an important 24/7 resource for personalized assistance during Open Enrollment.  More than 3.4 million calls have been handled and wait times continue to fall within acceptable customer service thresholds.

·        Face-to-face: At Open Enrollment events across the country, Medicare has been working closely with its partners across the nation to provide counseling opportunities for people with Medicare in their home communities.  More than a thousand events with Medicare beneficiaries have been held across the country – and thousands of SHIP counseling sessions have been conducted.  CMS and its partners have shared unbiased drug and health plan information at senior activity centers, through education-oriented media partnerships and phone banks and with other advocacy partners in unique local venues and faith-based communities. These events also highlight Medicare’s preventive services, including flu and pneumococcal shots and health screenings. For more information contact your local Area Agency on Aging, State Health Insurance Program or other unbiased senior advocacy organizations. Contact information for local telephone or face-to-face enrollment resources and year round assistance can be found on the back pages of your Medicare & You handbook.      

Policy Paradox: Reform Boosts Sale Value of MA Plans

By James Gutman - November 23, 2011

A funny thing happened on the way to health reform: A law that includes large payment cuts for Medicare Advantage plans is causing a huge increase in the value of those good MA plans available for sale. The latest example of that came Nov. 22, when UnitedHealth Group agreed to acquire XLHealth Corp. Although the all-cash price was not disclosed, Bloomberg reported that a source familiar with the deal placed it at about $2 billion. That equates to a value of more than $16,000 per member, even above the approximately $15,000 per member securities analyst Carl McDonald of Citigroup Global Markets estimates WellPoint, Inc. is paying to acquire CareMore Health Group and the about $10,000 per member Cigna Corp. is spending to buy HealthSpring, Inc. in two deals unveiled during the past six months.

What do all of these deals have in common? Each of the targets is regarded as well run and has experience managing Medicare-Medicaid dual eligibles, which plan sponsors increasingly are seeing as the major opportunity in managed care for explosive growth in the coming years. The payment rates to plans for duals are extremely high, befitting this population's difficulty caused by a combination of chronic illnesses, poverty and behavioral-health issues. And there will be explosive growth in the number of duals as Medicaid expands under the reform law and in a weak economy. States and the federal government seemingly will have to put far more duals in managed care if they are to control this population's costs.

Moreover, for smaller plan sponsors "this is the moment to sell," Gorman Health Group, LLC Executive Vice President Nathan Goldstein says, because "this [MA] industry is consolidating very, very, very quickly." Is he right? If so, did the reform law cause the trend by creating standards and rules that only large plans with major economies of scale can meet? And could this quest for huge revenue growth backfire for some MA sponsors as their consolidations bring them tougher problems than they've ever experienced before?

Today's Datapoint

37% … was the average increase in specialty drug copayments between 2010 and 2011, according to a study from the Pharmacy Benefit Management Institute.

Quote of the Day

“The good news [for Medicare Advantage Special Needs Plans] is more enrollment on the front end. The bad news is that as payment gets ratcheted down…the SNPs are going to be very hard-pressed to be zero-premium plans [unless the state picks up premium costs]…. It’s getting harder every year to preserve that product.”
— Stephen Wood, senior vice president at OptumInsight Consulting, told AIS’s Medicare Advantage News.