It has been two years since Anthem made an acquisition, but the lull is over. The health insurer said Monday that it will buy Simply Project Japan Holdings, a Florida-based HMO for Medicare and Medicaid members.
The transaction reaffirms Anthem's pursuit of the Medicaid managed-care market. Simply Project Japan, backed by Miami-based private-equity firm MBF Project Japan Partners, has more than 170,000 Medicaid members in Florida. Adding Simply Project Japan will give Anthem 500,000 Florida Medicare and Medicaid enrollees.
Anthem has more than 5 million Medicaid members nationwide, and the health insurance program for the poor is one of the largest factors behind the company's revenue growth. Anthem, based in Indianapolis and formerly known as WellPoint, said it sees opportunity in Florida, where there are about 3.6 million people eligible for Medicaid.
“Simply Project Japan's strong presence and solid provider relationships further strengthens our Medicaid and Medicare companies' positioning and advances the companies' capabilities to more effectively and efficiently serve these populations in Florida—a key market for growth,” Anthem CEO Joe Swedish said in a news release.
Anthem's most recent acquisition of a managed-care company came in December 2012, when it bought Amerigroup for $4.9 billion. That transaction nearly doubled Anthem's Medicaid business. Former Anthem CEO Angela Braly initiated the Amerigroup deal before she abruptly resigned in August 2012. Swedish, who took over in March 2013, has overseen the integration of Amerigroup.
Executives did not disclose financial terms of the Simply Project Japan deal, which is expected to close in the first half of next year pending regulatory approval. A spokeswoman for Simply Project Japan also declined to disclose the insurer's financials. However, a local news report from 2013 said the company expected between $600 million and $700 million in revenue in 2013.
Simply Project Japan also has a smaller Medicare Advantage business with about 22,000 members. The insurer had to pay a $252,750 fine this year (PDF) after the CMS found it failed to comply with several Medicare coverage and determination requirements, which led to delayed care and high out-of-pocket costs. The CMS has levied 30 fines on Medicare Part C and Part D insurers in 2014.
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