American Health Partners, which operates 29 skilled nursing and senior living facilities among other post-acute ventures, on Wednesday announced its acquisition by the Mitchell Family Office (MFO).
The Birmingham, Mich.-based MFO explicitly pointed to the diversity of American Health Partners’ holdings as a reason behind inking the deal. In addition to its brick-and-mortar senior health care and living operations, the company also maintains home health and hospice offices, a long-term care pharmacy, and five psychiatric hospitals — as well as a growing presence in the specialty Institutional Special Needs Plan (I-SNP) insurance market.
“We are very selective on where we choose to invest. With its full continuum of health care services, a strong management team and a growing Medicare Advantage business, we view American Health Partners as a company with tremendous growth opportunities,” MFO managing partner Mark Mitchell said in a statement announcing the deal. “We see ourselves as the bridge that helps high-potential companies go to the next level.”
The terms of the transaction were not disclosed; American Health Partners, based in Franklin, Tenn., will operate as a subsidiary of MFO.
“This is an important step forward in the evolution of our company,” American Health Partners CEO Michael Bailey said in the statement. “The past year has been challenging for everyone providing long term-care and other health care services to seniors, though we’ve fared better than most. This ownership agreement presents an exciting opportunity for American Health Partners.”
Bailey will remain in his leadership post along with current COO Robin Bradley and CFO Jeff Bogle.
Before COVID-19, I-SNPs — special Medicare Advantage plans that cover residents of nursing homes and other institutional care settings — were one of the hottest potential areas of growth and innovation in long-term care.
As Medicare Advantage plans cover a steadily increasing percentage of skilled nursing beneficiaries, operators have looked for ways to account for the generally lower payments that they receive from MA plans as compared to traditional fee-for-service Medicare. One of those ways is by cutting out the middleman and either launching an I-SNP or joining an existing plan: Become the payer, the thinking goes, and you’ll have a better grasp on both reimbursements and expenses.
American Health Plans has seen steady performance in its I-SNP products, which it offers through its American Health Plans subsidiary, even during the pandemic.
“The benefit of the I-SNP is: You’re ultimately getting to the top of the food chain and controlling the Medicare dollar,” American Health Plans chief development officer Hank Watson told SNN earlier this year. “So while it could be a long-term strategy in terms of positioning your nursing home organization higher up the food chain, and in terms of engagement in the health system and your local market, on day one, you’re getting premium payment from CMS monthly. You’re getting capitation to your facilities monthly, so the immediate cash flow effect is positive.”
While the development of new plan partnerships slowed during the immediate pandemic crisis, Watson said American Health Plans was fielding interest for the 2023 plan year — and pitching I-SNPs as a way to hedge against significant regulatory and payment uncertainty about the post-COVID years ahead.
“Is it challenging? Absolutely. But you’re in the game long-term if you’re a Medicare Advantage plan,” Watson said. “Regardless of what comes down the pipe next — which nobody knows over the next two, five, six, 10 years — you’re in the game if you’re controlling the premium dollar for your residents.”