The Managed Care sector went two steps forward, then one step back in July. Two deals were announced in the span of two days, and as the month neared a close, another deal was terminated, leaving this year’s total at a sluggish 10 deals.
Back in May 2017, we reported on Evergreen Health’s journey to become a for-profit, provider-sponsored plan in Maryland. The company was birthed as an insurance co-op under the Affordable Care Act and has struggled to survive since.
In October 2016, Evergreen put itself up for sale as a result of unprofitability and growing indebtedness to the Center for Medicare and Medicaid Services. Then, on May 2, a group of investors agreed to buy the company, which implied forfeiting its non-profit status and oversight from CMS. In June, the Maryland Insurance Administration approved the deal, and all systems were go.
In late July, the investors, which included Anne Arundel Health System, LifeBridge Health and JARS Health Investments, decided to call off the deal altogether. They claimed new financial information was revealed that raised concerns as the deal neared a close.
Under the proposed acquisition deal, the investors had agreed to provide enough capital for the insurer to repay remaining ACA-related debts and provide necessary operational capital, despite an actuarial report claiming that Evergreen was essentially a zero-value company. Going forward, the investors say they will continue to seek out options for a provider-sponsored plan in Maryland, leaving a dire future for Evergreen Health and its 35,000 members.
