Humana (NYSE: HUM) hasn’t made a lot of waves in the Physician Medical Group sector. Its larger managed care rival, UnitedHealth Group’s Optum (NYSE: UNH), spent approximately $8.2 billion on two large physician practice acquisitions in 2017 alone. There’s also the distraction of acquisition talks with one of the world’s largest retailers, Walmart (NYSE: WMT), which were revealed by The Wall Street Journal in April 2018.
While those talks are ongoing, Humana is honing its Medicare and Medicare Advantage services with the recent acquisition of Family Physicians Group based in Orlando, Florida. Financial terms were not disclosed, but it’s a safe bet they were considerable.
The group operates 22 clinics in Lake, Orange, Osceola and Seminole counties and provides care for more than 22,000 Medicare Advantage patients and more than 21,000 Medicaid, Medicare fee-for-service and commercial patients. It has 52 primary care physicians and seven specialists in cardiology, gastroenterology and nephrology.
Despite Humana’s focus on MA plans, Family Phsyicians will continue to operate as a payer-agnostic physician group serving multiple health plans.
The practice will become part of Humana’s CAC Florida Medical Centers, which give its members access multispecialty physicians in a patient-centered medical home. The care is coordinated, doctors work as teams, and members are less likely to slip through the cracks after they leave, according to the company’s website.
Not the First Rodeo
This isn’t the company’s first acquisition in Florida, although it is the first to be announced in a while. Back in 1995, when the market for medical practices was booming, Humana paid $51.3 million to acquire Coastal Capitated Clinic operations (NYSE: DR) in south Florida.
The deal included 47 clinics and 100 physicians, which accounted for one-fifth of DR‘s revenues. A sign of that the end of the doctor-buying boom was near: Proceeds from the transaction were slated to pay down debt owed by the Durham, North Carolina physician practice management company DR.
The target operations served more than 75,000 Humana commercial and Medicare risk members in south Florida and Tampa. At the time, Humana provided managed care services to approximately 510,000 members in the same territory.
In 1999, Humana paid $13.5 million to buy 50 clinics in Kansas City, Missouri; San Antonio, Texas; and Orlando, Tampa and Jacksonville, Florida. FPA Medical Management (OTCBB: FPMAQ) had filed for bankruptcy protection, and the sale was for cash.
Humana had sold most of these clinics in 1998, even though they served approximately 121,000 of its members. However, it had a 10-year agreement for FPA to provide services. After the bankruptcy, Humana bought back the practices.
