Behavioral health care deals dried up in February, but the action is picking up again. On March 2nd, 2017, not-for-profit Community Partners Inc., a parent company of behavioral healthcare service providers in Arizona, acquired Tucson-based Assurance Health & Wellness, for an undisclosed amount.
Assurance Health, a division of Sinfonia HealthCare Corporation, serves approximately 7,000 clients in a clinic that combines primary care with behavioral health treatment. Fletcher McCusker, CEO of Sinfonia, cited financial pressures as a reason for the combination.
The combined company will operate as a not-for-profit entity, and will be one of the largest providers of mental health services in Arizona. It is expected to generate annual revenues between $40 million and $50 million.
Community Partners was formerly known as Community Partnership of Southern Arizona, which served as Pima County’s regional behavioral-health authority (RBHA) for two decades. The firm transitioned to the provider side of the business in 2015, when the Southern Arizona RBHA contract went to Cenpatico Integrated Care, a subsidiary of Centene Corp. (NYSE: CNC).
Changes under Cenpatico’s authority, including diminishing reimbursement and mid-year contract reductions, have pushed some smaller Arizona providers out of business in the past year. McCusker also stated that starting in April, the payment structure will move away from advance “block” payments to a fee-for-service structure that pays agencies for care provided after they submit a claim. This, coupled with an overall transition to value-based reimbursement has made scale the key to survival in this everchanging environment.
In April 2016, Assurance Health & Wellness, which at the time only served about 2,000 clients, acquired privately-held Arizona Counseling & Treatment Services (ACTS) for an undisclosed amount. ACTS provides mental and physical healthcare services to more than 4,500 clients in the southern Arizona counties of La Paz, Cochise, Graham, Greenlee, Pinal and Yuma. The transaction added 16 new service locations, making Assurance one of the largest behavioral health care providers in Arizona.
