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Evolent Health, a provider of value-based care platform to health systems and physician organizations, has completed the acquisition of certain assets from New Mexico Health Connections (NMHC).
The strategic acquisition brings together two innovative companies that will operate a new health plan and managed services organization called True Health New Mexico.
The transaction closed on the announced terms, with Evolent acquiring assets related to the commercial business from New Mexico Health Connections for $10.25 million in cash. The assets include a commercial plan and health plan management services organization with a tenured leadership team and employee base with extensive experience working locally with providers to run NMHC's suite of preventive, disease and care management programs.
The assets are being contributed to a new entity, True Health New Mexico, a wholly-owned subsidiary of Evolent Health. As of December 31, 2017, the membership in the commercial plan was just under 20,000 members.
The legacy NMHC entity expects to continue to operate as an independent non-profit health care organization operating throughout the state of New Mexico, offering individual health insurance products. True Health New Mexico expects to enter into a managed services agreement with NMHC to support this ongoing individual business.
"As part of Evolent Health, True Health New Mexico is now positioned as a thriving alternative in the New Mexico commercial market. Working with our physician partners, we will continue to deliver differentiated care to our members and see multiple potential opportunities to grow True Health New Mexico," said Dr. Martin Hickey, CEO of True Health New Mexico and the former CEO of NMHC.
To provide stability to provider partners that will be serving commercial members as well as NMHC's individual members, Evolent expects to extend a 15-month capital-only reinsurance arrangement to NMHC, which is currently expected to be approximately $10 million. Evolent's subsidiary, True Health New Mexico, expects to underwrite the contract. The purpose of capital only reinsurance is to provide balance sheet support to NMHC. There is no transfer of underwriting risk to Evolent or True Health New Mexico, and neither Evolent nor True Health New Mexico are at risk for any cash payments on behalf of NMHC.
Evolent Health, Health plan, New Mexico Health Connections, NMHC, Acquisition, M&A, US