Author’s note: This post has been updated to correct an error in the second paragraph.
As state lawmakers debate the future of Medicaid home care, one of the program’s biggest contractors is quietly doubling its market share by buying a competitor.
In December, Elevance Health, the owner of New York’s No. 2 No. 1 managed long term care plan, reached a deal to purchase the No. 1 No. 2 company, Centers Plan for Healthy Living, along with one of its affiliates.
The combined companies currently manage home-care services for 110,000 Medicaid recipients, or 38 percent of those enrolled in managed long-term care plans.
The transaction suggests that Indianapolis-based Elevance is bullish on its prospects in New York, where Medicaid spending on home-based long-term care is unusually high and growing fast.
The pending purchase was disclosed in Elevance’s annual report for 2023, released in February:
On December 31, 2023, we entered into an agreement to acquire Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC (“Centers”). … The acquisition is expected to close in the third quarter of 2024 and is subject to standard closing conditions and customary approvals.
The announcement did not give a sale price or explain what government review would be necessary. No other mention of the transaction could be found on the website of either company, and the deal has received little public attention.
Managed long-term care plans play a middle-man role in New York’s Medicaid health plan, focused on a subset of beneficiaries who are elderly or disabled but living outside of nursing homes. The state pays the plans a monthly premium for each enrollee, and the plans in turn manage the costs of their enrollees’ primarily home-based services.
New York spends more per capita on Medicaid home care than any other state, and the program’s costs and enrollment have been rising rapidly for the past decade – making it a bone of contention in Albany.
In closed-door talks on the overdue state budget, Governor Hochul and legislative leaders are haggling over various proposals to rein in the $18.5 billion program, including tightening the regulations surrounding managed long-term care plans. Some lawmakers have proposed eliminating such plans completely. It remains unclear which, if any, of these cost-control measures will be adopted.
Elevance, formerly known as Anthem, entered New York’s home-care market three years ago by acquiring Integra, which at the time was the state’s largest managed long-term care plan. That plan, now known as Anthem Blue Cross and Blue Shield Health Plus, had 57,000 enrollees as of March.
The Centers plan, with 53,000 enrollees, is part of Centers Health Care, a multi-state network of services for the elderly and disabled, including 38 New York nursing homes as well as assisted living facilities and home-care agencies.
In June 2023, Attorney General Letitia James filed suit against four Centers-controlled nursing homes and two of the company’s top executives, Kenneth Rozenberg and Daryl Hagler. The suit accused the homes of neglecting and abusing residents while fraudulently siphoning profits out of the facilities, which are largely financed by Medicaid. The company has denied the charges.
Despite that dispute, in December the state finalized a renewed managed long-term care contract with the Centers Plan for Healthy Living worth more than $16 billion from 2022 through 2026.
In November, the state also finalized a five-year contract with Anthem worth $13 billion over the same five years.
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