News roundup #1: UHG-Amedisys extended, NeueHealth going private in NEA’s ‘deal deal’, Commure buying Memora Health, VA resuming Oracle rollouts–now mid-’26

January 8, 2025 | by

The end of year is a favorite time to slip in news that deserves wider notice. Sometimes it’s by design so as not to be noticed…and sometimes it’s timing. Or both. Here’s a potpourri of analyses of late December moves of note.

UnitedHealth Group and Amedisys home health agreed to extend their deal window to 31 December 2025. Amedisys filed regulatory paper on 26 December (file here) that moved the acquisition termination date to end of this year, or alternatively to 10 business days after a final court ruling blocking the merger. The latter is a distinct possibility since the Department of Justice back on 12 November filed a lawsuit to prevent the acquisition [TTA 14 Nov 24] on anti-trust grounds, joined by the attorneys general of four states. Amedisys, a major competitor to UHG/Optum, would be merged into Optum’s existing home health operations.

This long-running acquisition started back in June 2023 as an all-cash deal for $3.3 billion and went into DOJ review by August. The target closing at that time was end of 2024 as both companies knew that divestitures would be necessary. The penalty for non-completion was also upped to $325 million if needed divestitures to the VitalCaring Group proposed last July aren’t completed by 1 May. Even with a new Attorney General coming in after Senate confirmation, the wheels are already in motion for this antitrust action that throws a completion into doubt. Becker’s, Healthcare Dive

Gimlet EyeNeueHealth to be taken private by New Enterprise Associates (NEA) and other investors. The latest episode of the long-running NeueHealth (formerly BrightHealth) show dropped on 23 December. Existing investor NEA and 12 other investors with preferred shares in the company will take it private at an enterprise value of approximately $1.3 billion and roll over their shares for equity in the private company. Other holders of common stock will be cashed out, receiving $7.33 per share, a premium of 70% over the $4.31 closing on 23 December. The final price may change as common shares went up sharply the next day and remain up–today (8 January) opened at $7.49. Closing timing of this ‘deal deal’ is dependent on shareholder and regulatory approvals. Management will remain and roll over their shares into the company. Hercules Capital’s loan facility remains in place.  

Buried in the release is this caveat: “The merger agreement includes a 30-day “go-shop” period that will expire at 12:01 AM New York City time on January 23, 2025, which permits the Special Committee and its financial advisors to solicit and consider alternative acquisition proposals.” These proposals will be kept under wraps. But in this Editor’s view, outside offers are highly unlikely given the company’s death-defying history, continuing losses, and Ticking Time Bombs (see below). Their Q3 results had projected full-year 2024 adjusted EBITDA between $15 million and $25 million–but they lost $40 million in Q3 with the 2024 loss to date over $102 million.

As Ari Gottlieb dryly noted in his LinkedIn post, the company is $1.4 billion in debt. $7.33 per share is quite a comedown from the June 2021 IPO at $18 and an $11 billion valuation. The payout to the 36% of shares held by the other public shareholders is a paltry $21 million. Bottom line–NEA and the preferred investors are buying the company for $21 million–such a deal!

This Editor has previously and Gimletly noted NeueHealth’s high-wire act. It has truly Dodged Disaster with aplomb, skillfully creating its Own New Reality. But its Ticking Time Bombs remain: $300 million in CMS Repayment Agreements due on or before 14 March 2025 and $89 million owed to Texas from last year to cover risk liabilities for its shuttered ACA plans [TTA 14 Feb]. To be continued…   Release, Star-Tribune, FierceHealthcare

Commure bought digital health navigation platform Memora Health. Neither acquisition cost nor management transitions were disclosed on 20 December. Commure has one of the more interesting stories out there as the current company emerged from a General Catalyst-engineered estimated $6 billion merger between Commure and Athelas, with Athelas taking the upper hand in the reorganization [TTA 23 Oct 2024]. It should then be no surprise that Memora has significant investment from General Catalyst, which led its last round of funding in April 2023, making this another investor-arranged deal.

Commure’s primary products are the Strongline duress systems for worker distress and patient elopement and the Patient Keeper EHR, with Athelas in revenue cycle management and sensor-based remote patient monitoring. The combined company now features AI-aided workflows, RCM, duress systems, and a software development platform accessible to outside vendors. What Memora is primarily known for is automating practice follow-up texts before and after procedures. The Memora acquisition is positioned as reinforcing CommureOS’ clinical documentation, RCM, and real-time location services (RTLS). In October, Commure closed their acquisition of Augmedix, an AI-assisted physician scribe used by 20 health systems, for $139 million ($2.39/share), giving it a huge leg up into those providers. Augmedix IPO’d via a SPAC in 2021 at $4/share. About 400,000 physicians are claimed to be users of the Commure suite of products.  Release, Mobihealthnews, Endpoints, FierceHealthcare (Augmedix)

And what end of year would it be without a hopeful note from the VA about the Oracle Cerner rollout–now continuing in mid-2026? The Department of Veterans Affairs (VA) on 20 December officially targeted mid-2026 for four Oracle Cerner implementations, 18 months from now. It’s carefully hedged that they are beginning ‘early-stage planning’ for deployment in four Michigan facilities — Ann Arbor, Battle Creek, Detroit, and Saginaw. Meanwhile, improvements will continue at the five sites that use Oracle Cerner plus the sixth joint implementation with the MHS (Lovell). Interestingly, the current VA secretary, Denis McDonough, announced at an 11 December press conference that new implementations would start before the end of 2025 [TTA 19 Dec 2024]. This Editor assumes that the staff sharpened their pencils and recalculated right before Christmas. What’s also hopeful for Oracle and the VA are continuing  improvements in veteran outpatient trust and clinician satisfaction scores, as well as effectively eliminating outages for 200 days as of the release date. VA release, Healthcare Dive 

Bad News Roundup updates: UHG/Optum defends Amedisys buy fast via a website, digging deeper into Forward’s fast demise, former Masimo CEO Kiani booted–and sued (updated)

November 15, 2024 | by

The other shoe drops, as UnitedHealth Group/Optum take their defense public a day later. This unorthodox approach to defending an acquisition against a Department of Justice lawsuit [TTA 13 Nov] is visible on a specially set up Optum page. ImprovingHomeCare.com predictably highlights the benefits of an Amedisys merger along with the divestitures to VitalCaring Group. The gauntlet thrown is unadorned: “The Amedisys combination with Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care. We will vigorously defend against the Department of Justice’s overreaching interpretation of the antitrust laws.”

  • Setup is around present and future demand–and that providers have to be capable of investing and scaling to meet it. “70% of adults 65 or older will likely need some form of long-term care during their lives.” and 3 million Americans received home health services in 2020 (Editor’s note–in a pandemic year when visits were certainly curtailed).
  • Home health is highly fragmented both nationally and locally, thus the acquisition isn’t anti-competitive. “In metropolitan areas with approximately 500,000 residents, there are an average of 26 agencies serving the metro area. The combination of Optum and Amedisys would be a fraction of both home health and hospice–and there would be strong competition in both metro and rural areas.
  • The divestiture to VitalCaring would further preserve competition, and that VitalCaring is a quality competitor. The DOJ release made much of VitalCaring’s inadequacies, such as their lower quality scores, financial difficulties, and leadership. VitalCaring, headquartered in Austin, Texas, currently operates in six states with 58 locations with plans to expand. Their CEO April Anthony is cited as building multiple home health companies ‘from scratch’ such as Encompass Care.
  • Additional proof points stress streamlining of care across Optum’s areas of expertise, integrating technology, and improving value-based care coordination.

FierceHealthcare

Forward’s shut down continues to reverberate in a classic tale of overreach and misdirection. Their bet on kiosks, plus a ‘forward-tech’ approach to a concierge-on-the-cheap, no- insurance-accepted model of primary care over eight years, apparently led to what pilots call a death spiral–it begins wide and imperceptible until it tightens and accelerates fatally in a final dive. Business Insider, true to its name, spoke with 11 anonymous and now former employees who attributed the failure to putting all their chips on 3,200 CarePods installed in one year. Their CEO, Adrian Aoun, was obsessed with technology to the point where he wanted to replace his offices and doctors with CarePods and started to strip the clinics of services, despite only two CarePods installed. 

Most advanced, yet unacceptable*. Patients didn’t try out or use the CarePods, finding them less than inviting. Logistical challenges delayed placements in large markets like New York and Chicago. Then technical problems mounted: automated blood draws failed, lab tests were withdrawn. The coup de grace–patients kept getting trapped in the CarePods. They were insanely expensive–the first two CarePods cost over $1 million each. Then the huge units were unattractive to landlords who didn’t want to fight local building codes nor saw a profit in them. By the end of the summer, there were only two CarePods in place at a mall in Sacramento and in Chandler, Arizona, both gathering dust. (*Shout out to Raymond Loewy, Never Leave Well Enough Alone)

In the increasingly empty Forward clinic offices, the futuristic tech and breadth of services touted in social media adverts weren’t quite as advertised. The whole-body scanner glitched requiring manual checks. Their lab tests became limited to those that could be done in-house, eliminating genetic testing via 23andMe along with services such as simple dermatology removals.

Christina Farr in Second Opinion has a set of takeaways worth noting, with this Editor’s comments (in parentheses):

  • Subscription-based, out-of-pocket healthcare is possible–but hard. (WAY hard when basics are up 25%+! And insurance is almost a given, even if taken in part.)
  • Brick-and-mortar clinics make only limited sense–and space must be used economically, not easy to do in health tech. (Retail and in-person are perhaps anathema in the concepts of those in health tech.)
  • We’re not focusing on those who really need care (But they’re not sexy, wealthy, or relatable to the creators of said tech. Many of them are also on Medicare and Medicaid–truly not sexy.)
  • Primary care is a tough starting point for subscription care (Except the very highest, most exclusive end as she notes!) Specialties may be more amenable to this model. (But volume?) And different age groups want different relationships within this type of care.
  • Timing is everything. Perhaps if Forward had started its clinics today it would have had a far better chance of success? (Then look at bullets 1-4 and see how truly daunting a tech-first clinic setup can be for the tech mindset untempered by research and UX-minded marketing.)

Forward is yet another sad and expensive example of 1) a founder hyperfocusing on whiz-bang technology, 2) losing touch with the customers using it, 3) not improving delivery based on customer needs, and 4) forgetting where he ostensibly started–the mission of improving healthcare. This Editor is sure that his 30-odd investors, especially Vinod Khosla, will have something to say to him about running through $100 million in one year–and over $300 million over eight years.

Masimo’s now-former CEO booted from his company and sued–to boot! (updated) The new management formally terminated founder Joe Kiani on 24 October, as noted in an October SEC filing. In a classic ‘you’re fired..no, I quit!’ situation, after he lost the proxy fight for control of the company, he resigned on 19 September. Kiani immediately filed a lawsuit against Masimo in California state court to obtain a $400 million payout per his employment contract. It is reported to be a declaratory relief suit that hinges on a ‘resignation for good reason’. This is usually specified in the contract. An example is that the executive ceases to be part of senior management, along with others.

The new board of directors has now turned the tables. Masimo is now suing Kiani and RTW Investments in the US District Court for the Southern District of New York. The complaint alleges collusion to violate Federal securities laws by secretly manipulating the shareholder vote through an ’empty voting’ scheme. Empty voting is done through put options or by selling the shares after the record date but before the shareholder meeting. It’s a way for an investor to build up share control and sway the outcome of a shareholder vote at little cost. The suit proposes that Kiani and RTW did precisely that, rigging the vote by acquiring control of over 19% of shares. Evidently, the BOD has proof. The lawsuit and more details are in Strata-gee.

(Editor’s opinion: this is a bare-knucks attempt to claw back Kiani’s contract payout by the new controlling company, Politan Capital Management. And both lawsuits could be true. Pass the popcorn.)

Insult upon injury for Joe Kiani is that shareholders now have some hope that management can save the company by concentrating on healthcare tech. Shares are up. Masimo’s Q3 results reported on 5 November were strong though net income declined. Sound United, the main anchor dragging down the company, is now termed ‘a discontinued operation’. Exhaustive detail on their results is in Strata-gee here.

Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly

November 14, 2024 | by

Shoe drop! The long-anticipated Department of Justice (DOJ) lawsuit against UnitedHealth Group and Optum to prevent the acquisition of  home health and hospice operator Amedisys was filed yesterday (12 November) in the District of Maryland. UHG’s offer to acquire Amedisys was made in June 2023 for $3.3 billion in an all-cash deal, but approval was held up in DOJ review ever since. Even with location divestitures proposed in July to VitalCaring Group to reduce anti-trust concerns with Optum’s home health operations (acquired with LHC Group), UHG remained a DOJ target. The civil lawsuit was filed by DOJ together with the Attorneys General of Maryland, Illinois, New Jersey, and New York. No timeline is provided in the release.

The rationale cited is of course anti-trust and elimination of competition between Amedisys and UHG’s Optum. “We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. The fact that the US Attorney General was quoted first in their release indicates the importance of the case to the DOJ. It’s also a race to the finish as come 20 January 2025, there will be a new president appointing a new AG immediately.

The DOJ states that both companies are “fierce competitors” and that the divestiture is insufficient. “The proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses.”  Their case is well-built in this Editor’s view. From the release:

 UnitedHealth’s market share after the transaction would make the merger presumptively illegal in:

    • Hundreds of local home health care markets, with an annual volume of commerce exceeding $1.6 billion annually, in 23 states and the District of Columbia;
    • Dozens of local hospice markets, with an annual volume of commerce exceeding $300 million annually, in 8 states; and
    • Hundreds of local markets for home health and hospice nurse labor, employing at least 8,000 nurses, in 24 states.

The lawsuit also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) by failing to produce millions of documents or disclosing the deletion of other documents. For each day that Amedisys was in violation of the HSR, DOJ is seeking a fine of up to $51,744 daily. Amedisys was originally set to be acquired by OptionCare, which does not directly compete in home health, but UHG won a bidding war.

As this Editor said at the time of the Change Healthcare acquisition win against DOJ in Federal court (and we know how that turned out long term), “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.” FierceHealthcare

23andMe continues their long jump down to…who knows where? CEO Anne Wojcicki is minusing out 200+ employees or 40% of its remaining workforce, and fully shuttering its therapeutics development unit. The latter is running two clinical trials which will be wound down ‘as quickly as practical.’ These cuts will save $35 million annually but incur $12 million in one-time severance and termination-related costs. The much-touted therapeutics discovery unit was shut in late summer [TTA 14 August].

What’s left? Not much–the Lemonaid remote prescribing unit, with an entree into GLP-1 prescribing, some published studies, a new AI chatbot called “DaNA”, and a longevity service dubbed Total Health. During their Q2 FY2025 earnings call and release, revenue sank to $44 million versus prior year’s $50 million (-12%)–slightly from Q1’s $40 million–operating expenses reduced 17% to $84 million versus prior year’s $101 million, but the company remained firmly in the red with a GAAP loss of $59 million, 21% less than last year’s $75 million and reduced versus Q1’s $69 million loss. The board, as previously noted, now consists of three financial non-healthcare people, replacing the seven who resigned. Meanwhile, customers wonder about the security and use of their genetic and personal information [TTA 8 Nov]. Release, AP, Healthcare Dive

Another telemental health unicorn, Lyra Health, laid off 2% of staff in a restructuring. 77 people on non-clinical operational teams were released. Some may receive severance for 12 weeks with health benefits, according to one of the anonymous released. Noted in the FierceHealthcare article are reported changes at Lyra, including larger provider caseloads demanded and deletion of seven core values that put clients and clinicians first. Lyra’s last raise was a $235 million Series F in January 2022 for a total of over $910 million (Crunchbase). That high valuation of $5.6 billion has been tough to maintain in the current funding environment–and to not take a down round that affects valuation. 

Health kiosk/primary care practice Forward goes backward, shuts immediately. Nearly on the first anniversary of a $100 million Series E raise from Khosla Ventures and four other investors to deploy self-serve kiosks (left) in major cities [TTA 17 Nov 23], tech-driven primary care practice Forward announced its sudden closure today, effective immediately. What remains on their website is a goodbye-and-good-luck note to patients canceling appointments and zeroing out its app. Patients can email clinicians for care support until 19 December. There is no information available on accessing records nor transferring to new providers, leaving patients in the lurch. 200 employees will lose their jobs immediately as well.

Forward had primary care practices in 14 markets such as New York, San Francisco, and others. Last year it claimed 100+ primary clinicians at 19 locations, with patients paying $150/monthly (no insurance accepted) for un­lim­it­ed vis­its to For­ward’s pri­ma­ry clin­ics. (Refunds, anyone?) The CarePods self-serve kiosks were designed to be self-contained units placed in malls, offices, and gyms. Inside, subscribing patients could access AI-powered health apps for disease detection, biometric body scans, blood testing in disease areas, including diabetes, hypertension, weight management, and mental health (depression and anxiety). They were scheduled last year to be deployed in the San Francisco Bay Area, New York, Chicago, and Philadelphia. Nice idea, but like the earlier HealthSpot Station of 2012-2016, they are equally defunct.

In its eight-year life, Forward had raised $325 million (Crunchbase), which also reported last year’s Series E as only $75 million. At the time of their Series D, Forward was valued at over $1 billion and had a roster of flashy investors such as music’s The Weeknd, Salesforce’s founder Marc Benioff, actor Matthew McConaughey, Eric Schmidt, and Softbank. What’s stunning? Reports indicated that it only gen­er­at­ed un­der $100 mil­lion in to­tal rev­enue since its founding. There has to be more to this, like lawsuits….    FierceHealthcare, Endpoints News

Follow up roundup: Amwell to reverse stock split to avoid delisting (updated), Amazon Clinic folded into One Medical, Amedisys divesting to close UHG deal, latest on Steward Health’s antics and $7M spying, Masimo’s shareholder fight (latest)

July 2, 2024 | by

Amwell will reverse stock split to fix their pending delisting on the NYSE. The board of directors approved on 28 June a 1 for 20 reverse split. This will remedy their non-compliance with NYSE regulations requiring an average closing price of above $1.00 over a consecutive 30 trading-day period [TTA 5 Apr]. Shareholders approved the move at their meeting on 18 June. The NYSE notice was given on 2 April and the reverse split will happen at the market open on 11 July, well within the six-month window. Amwell Class A shares closed yesterday at $0.27 so that condensing 20 shares will bring the share price around $5.40. Amwell’s 2024 is forecast with revenue in the range of $259 to $269 million and adjusted EBITDA in the (less) red between ($160) million to ($155) million, with no breakeven in sight until 2026. Their Q1 posted a $73.4 million net loss. Amwell has also released 10% of staff since the palmier days of 2023. Amwell, like Teladoc, continues to struggle in a stand-alone urgent care model that is now obsolete. Release, Healthcare Dive

Update 11 July: Amwell shares opened today at $6.52, and as of midday were trading at $7.51. So short term, the reverse split is working to plump up the shares.

Amazon says goodbye to Amazon Clinic by folding it into One Medical. This should come as no surprise to Readers who noted the  May departure of Clinic’s general manager Nworah Ayogu, MD to VC Thrive Capital with no replacement or search. Amazon’s announcement on 27 June was typically upbeat in renaming the service as One Medical’s Pay-per-visit telehealth. The improvements they claim are:

  • Pay-per-visit telehealth for 30+ common but minor conditions, like pink eye, the flu, or a sinus infection
  • A One Medical monthly or annual membership plan that includes on-demand virtual care and same or next-day appointments at 150+ One Medical primary care offices
  • More affordable–messaging/asynchronous visits are now $29, formerly $35, and video visits at $49, formerly $75. 

The catch–existing Clinic members have to log into One Medical to access their records and the service. Amazon is also propping up One Medical through Prime membership, offering a better deal at $99/year and non-Prime individuals for $199 per year. Amazon does not disclose users, growth, or revenue for either Clinic or One Medical. Healthcare Dive

The long-delayed UnitedHealth-Amedisys home health deal moves closer to closing. Amedisys and UHG’s home health operation under Optum will be divesting some of their locations to VitalCaring Group to avoid Department of Justice anti-trust concerns. The divestiture is contingent on the acquisition closing, now projected in second half of this year. The number of locations was not disclosed though earlier speculation had estimated it at 100. UHG’s offer to acquire Amedisys was made in June 2023 for $3.3 billion in an all-cash deal. It would be additive to its earlier $5.4 billion buy of LHC Group, now part of Optum. With the divestiture, analysts do not see any impediments to a closing, though it had faced opposition in Oregon in March and DOJ opposition since it was announced. This Editor remains sanguine about a successful closing. After UHG won versus DOJ in the Change Healthcare acquisition, “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.” Expect a few more impediments tossed in their direction over the next months. FierceHealthcare , Zack’s Research

The latest episodes in the continuing soap opera of Steward Health involve both Optum and James Bond moves on their critics. Optum had offered back in March to buy their practice groups under Stewardship Health, which stalled with first the Massachusetts Health Policy Commission (HPC), then their bankruptcy. That offer is now off, leaving Steward in the lurch. It was critical to $75 million of Steward’s debtor-in-possession (DIP) financing as recently as 13 June [TTA 14 June]. The deal would have been problematic anyway for Optum as they are under DOJ scrutiny not only for Amedisys but also because Optum controls or has arrangements with 10% of US physicians, 90,000 to date. Healthcare Dive They also settled recently with DOJ for $20 million on Optum Rx’s filling orders from a mail-order pharmacy in Carlsbad, California between 2013 and 2015 for Schedule II drugs: opioids, benzodiazepines, and muscle relaxants. Healthcare Dive

Adding to Steward’s piles of misery are the latest revelations that Steward financed a $7 million spy operation on their critics. This loony aspect to the Steward endgame involved contracting with UK investigators on surveilling a critical former executive, a British financial analyst, and a Maltese politician to find compromising actions between 2018 and 2023. The investigations were allegedly authorized and prioritized by Steward’s top executives while Steward struggled to pay bills for its hospitals and practices. Payments to the investigators were routed through Steward’s Malta operation against their critics in Malta and elsewhere. Steward at the time was embroiled in a dispute around their management of hospitals in Malta, which was eventually investigated and terminated by a Maltese court last year.

One example: the UK firm Audere “collected embarrassing personal information and photographs of a former Steward employee after Steward feared he would leak financial information to its auditor.” Another was the investigation and harassment of a British financial analyst, Fraser Perring, critical of Steward’s actions in its dealings with Medical Properties Trust (MPT). He was followed, his home CCTV was disabled, his home was broken into, family members and his partner were followed. Perring was also being smeared on Twitter through an account set up by Audere. There is much more on this in OCCRP’s report, published (paywalled) in the Boston Globe and Times of Malta. OCCRP’s full report and findings are here. FierceHealthcare

Electronics, audio, and medical device company Masimo continues to fight a hostile activist investor, Politan Capital Management. In December 2023, Masimo notched a significant win via the International Trade Commission versus Apple’s Series 6 and later Watches that forced Apple to disable its pulse oximetry (SpO2) sensors and software that violated Masimo’s smartwatch patents [TTA 28 Dec 2023]. Politan descended on Masimo in April accusing CEO and chairman Joe Kiani and others of mismanagement, including the 2022 acquisition of Sound United’s audio brands. It won two seats on the Masimo board of directors at the last shareholders’ meeting and is demanding two more seats at this year’s meeting on 25 July which would give it effective control.

The latest in the proxy fight is that the chief operating officer, Bilal Muhsin, will depart after 24 years at Masimo if Joe Kiani is forced out. The brief conditional resignation was sent to Masimo’s lead independent director, Craig Reynolds. Mentioned in the resignation was that he would refuse to work with Quentin Koffey, a Masimo director and chief investment officer of Politan Capital. More letters like this may be coming as reportedly Masimo management has urged employees to sign similar letters. Strata-gee, MedTech Dive  

Politan was the investment group that upended Centene Corporation and ousted most of Centene’s board plus 25-year CEO Michael Neidorff in 2022 shortly before his death on 7 April 2022 [TTA 18 Dec 2021]

Update: 300 engineers in Masimo’s healthcare division expressed specific support for Joe Kiani against Politan and Quentin Koffey in an open letter. “We wish to convey our deepest concern if Quentin Koffey and Politan Capital take control and Joe Kiani is removed. We are committed to Masimo because of the vision and innovation he pushes and drives us to deliver. The prospect of losing our founder and CEO threatens to derail the progress we have made and jeopardize the future of Masimo.” They also expressed that they may leave. “We, the undersigned from Masimo Healthcare Engineering, wanted you to be aware that we may not continue with the company if Joe Kiani is replaced by Quentin Koffey and Politan Capital.” This follows on other letters written by international regional managers and presidents in June also stating their support and warning that they may leave if Kiani leaves. The annual shareholder meeting is scheduled for 25 July.   MedTech Dive

However, Masimo is also embattled on other fronts: earlier in June, DOJ and FDA announced their investigation of problems with their Rad-G and Rad-97 SpO2 devices leading to a recall and the SEC is investigating potential accounting irregularities and internal control deficiencies. MedTechDive

Who really has the 4TB of Change Healthcare data 4 sale? And in great timing, Optum lays off a rumored 20K–say wot?

April 23, 2024 | by

The data is for sale! And the top does not go down, but the price definitely goes up! That old antique auto auction cry is paraphrased here because the 4TB of patient data hacked from Change’s systems is up for sale, since Change/Optum didn’t buy it. Interested parties should stroll over to the dark web and see RansomHub’s listing for details.

Unlike some news sources that got confused, this apparently is the same 4TB that BlackCat/ALPHV affiliate ‘notchy’ stole (technically, exfiltrated) posted about on a dark web site shortly after the attack [TTA 7 Mar]. According to those early reports, ‘notchy’ was dissatisfied that he didn’t get a cut of the $22 million ransom that Optum supposedly paid the BlackCat/ALPHV group.

For their $22 million ransom, which Change has not, repeat NOT, confirmed, ALPHV gave Change a decryptor key. But, they didn’t have the good manners to 1) return the stolen data to Change or delete it, which included highly sensitive data from multiple Change customers including active military PII (from Tricare), patient PII, payment and claims data, and much more, and 2) pay a cut to the affiliate. And then ALPHV shut down and ran out of town.

Here’s the latest updates from DataBreaches. net, 

Over a month later, an outfit called RansomHub posted, again on the dark web, that it has the 4TB of data. 

As reported here on 10 April, there was an announcement on the RansomHub website, not signed by ‘notchy’, that if Change wasn’t interested in paying for the data, it would be up for sale. There was some confusion, based on a WIRED report, that this was a second breach. The RansomHub information seemed to point to only ‘notchy’s’ data.

DataBreaches followed up with RansomHub to 1) verify they had the data, asking if 2) was it ‘notchy’s data’, and 3) how did RansomHub obtain it if not ‘notchy’? RansomHub also leaked some screenshots of  2011-2013 Medicare claims data. This old data raises even more questions on why this data was even available online and not stored offline…unless…. RansomHub’s 15 April posting included this statement, “The more we go through the data the more we are shocked of the amount of financial, medical, and personal information we find and it will be more devastating than the first attack itself.” 

By 16 April, DataBreaches reported that the listing read:

Change HealthCare – OPTUM Group – United HealthCare Group – FOR SALE

The data in now for sale. Anyone interested in the purchase should contact RansomHub. 

But does RansomHub actually have it? Are they ‘notchy’, in it with ‘notchy’, brokering ‘notchy’, or is it a second 4TB breach? Stay tuned.

Thousands at Optum won’t care one way or another. Reports since last Thursday have been that first hundreds, then thousands, then up to 20,000, have been laid off. These are based on social media postings on LinkedIn and boards like The Layoff where anyone can post. Optum has not confirmed any layoffs to industry media such as FierceHealthcare and Becker’s Hospital Review / Becker’s ASC Review which published reports starting last Friday. Federal and state WARN notices, which usually confirm mass layoffs by state, have been oddly empty. 

Across the reports, Optum has laid off staff from their California care division (400), home health provider Landmark Health (500), urgent care MedExpress (all as of 18 July), Genoa (OptumRx-unknown). Notices range from immediate, to two weeks into May, and forward. Types of jobs eliminated have been at all levels of regional and corporate, affecting engineers, care management, clinical, case directors, data operations, and integration managers. This LinkedIn post claims up to 20,000. Optum’s silence has let the rumor mill run overtime.

CMS has lowered Medicare Advantage reimbursement, but other insurers factored this in earlier this year. The major whack was the Change Healthcare cyberattack. Though the public posture of UnitedHealth Group is that most of the systems are back or being worked around, the financial truth is that the Change disaster will cost them $1.6 billion in 2024 as announced last week. It does lead one to wonder about how mighty UHG, on an acquisition tear for years through today, always doing well and pleasing Mr. Market, got quite so overstaffed. How would it be overstaffed by thousands or the rumored 20,000 who are suddenly, dramatically unnecessary? That may boost the stock, but it gives the Feds yet another ax to grind, what with the House savaging an absent UHG on the cyberattack handling and their payments to providers [TTA 18 April], DOJ taking a hard cold look into UHG’s business practices, specifically around antitrust between the payer group and Optum [TTA 6 Mar], and approvals for the Amedisys buy stalling.

Here’s a view at variance, not about the layoffs but about how UHG is really doing. STAT’s analysis of UHG’s financial report is that the Change losses barely dent the overall picture and won’t affect 2024 earnings. Q1’s loss was mostly the Brazil writedown. It also confirmed that CEO Andrew Witty had a certain gall to say in prepared remarks that the Change situation would have been so much worse had they not been owned by UHG. Mr. Witty will have some ‘splainin’ to do before the House and the Senate, 30 April and 1 May, respectively.

Mid-week roundup: DocGo in NY migrant service trouble, more DOJ scrutiny of UHG-Amedisys buy, Exor now $2.8B lead investor in Philips

August 16, 2023 | by

DocGo catching flak over their services to migrants housed in New York State. Officials in Albany County and in the state capital of Albany have criticized DocGo’s health and food services to migrants being given temporary housing in that area. DocGo’s primary contracts for health services are with New York City including a $432 million no-bid contract with NYC. Since the migrants come through NYC and are being housed upstate, DocGo has been put in charge of about 700 migrants temporarily located in the Albany area with housing and services such as medical care, food, transportation, security, and case management. According to county officials, DocGo failed to provide these services. According to the Albany County officials, food was either not delivered or spoiled, and DocGo did not communicate with them since the program started in May. DocGo has denied these allegations and their CEO Anthony Capone has stated that DocGo is working to provide food via local food pantries and ‘culturally sensitive’ meal choices. In addition, they have provided to date over 25,500 meals to Albany area migrants, plus transportation shuttles for both medical treatment and to public transportation. DocGo said it has provided medical care and other services to more than 19,000 migrants in NY since beginning its work in September. Albany Times-Union, Mobihealthnews, WNYT.com  

As we noted only last week, DocGo upped its 2023 financials, buoyed by their large NYC contract. Their latest New York partnership is with EmblemHealth, a NYC and Tri-State area health plan that serves about 3 million members. DocGo will provide in-home services in New York, New Jersey, and Connecticut. Release

The UnitedHealth Group acquisition of Amedisys has run into extra scrutiny from the Department of Justice. Under the Hart-Scott-Rodino Act (HSR Act), a premerger notification has to be filed by both parties with the DOJ and the Federal Trade Commission (FTC). That was done on 5 July. DOJ and FTC responded with a second request for additional information on 4 August (page 16 of their SEC Schedule 14 A filing). What this will do is delay UHG and Amedisys moving forward with the deal until 30 days after they have complied with the second request. Amedisys is proceeding with a shareholder meeting on 8 September for approval of the acquisition.

The second request fits with recent changes to information disclosure requirements proposed by the US Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division in June. These are currently in 60-day public review open to 28 August. Both FTC and DOJ with premerger notification and Draft Merger Guidelines [TTA 20 July] are proposing significant additional information requirements and substantial tightening of what will be acceptable in mergers and acquisitions under new anti-competitive and antitrust guidelines. An educated guess is that DOJ and FTC will be looking at Amedisys’ fit and home health market share effect with UHG’s earlier acquisitions LHC Group and Contessa Health, now in Optum. A preview of coming attractions in M&A?

The buy was announced in June as an all-cash deal for $3.3 billion (over $100 per share). Healthcare Dive, FierceHealthcare

Exor taking a 15% share in Philips with a $2.8 billion stake. Exor is an Italian investment company controlled by the Agnelli (Fiat) family that also has shares in Ferrari, Stellantis, the Economist, and football club Juventus in an overall strategy of investments in healthcare and luxury companies. Exor bought the shares in the open market with the option to buy another 5%. Exor will take a seat on Philips’ board. The Respironics recall affected Philips’ overall business and cut share price by about 70% compared to pre-recall.  Reuters. Hat tip to HIStalk.

Mid-week roundup: Optum buying Amedisys home care for $3.3B; Clover Health settles 7 shareholder lawsuits around SPAC non-disclosures; Walgreens cuts 2023 outlook, stock plummets 11%

June 28, 2023 | by

UnitedHealth Group expands home health again, aces out Option Care Health in all-cash deal. Amedisys had previously accepted Option Care’s all-stock deal in May valued at $97.38 per share. Optum’s offer is at $101 per share in cash, a dollar higher than its previous offer, creating a valuation for the company at $3.7 billion. Amedisys will add to UHG’s $5.4 billion acquisition of the LHC Group in February, including the hospital-at-home market from its acquisition of Contessa Health for $250 million in 2021. 

Option Care is a public (Nasdaq: OPCH) post-acute and home infusion care company for which Amedisys in-home care delivery would have been an exceptional fit. It was last heard from in August making a run at Signify Health for home health and ACO providers. At that time, the not-well-known company was discovered to have some impressive backing from Goldman Sachs. Walgreens Boots Alliance also backed the company but cut its stake in March and sold the rest for $330 million earlier this month. Option Care will receive a termination fee of $106 million. Healthcare Dive, FierceHealthcare

Insurtech Clover Health settles seven lawsuits around its 2021 SPAC. Clover, with Medicare Advantage plans in eight states, went public in January 2021 at the very peak of ‘blank check’-dom. Almost immediately, after an explosive report by Hindenburg Research that revealed that the Department of Justice (DOJ) had been investigating the company on investor relationships and business practices starting in fall 2020 [TTA 9 Feb 2021], there were multiple lawsuits filed by shareholders (derivative litigation) over not revealing this material fact. Shares took the expected dive from their intro of $15.90 to today’s $0.85. The seven derivative lawsuits were in Delaware, New York, and Tennessee courts and are being settled without payment. According to Clover’s release, “the defendants in the derivative lawsuits will receive customary releases and the Company will implement a suite of corporate governance enhancements. The settlement does not involve any monetary payment, other than payment of an award of fees and expenses to plaintiffs’ counsel, which has not yet been set. The defendants have denied all wrongdoing and have entered into this settlement to avoid the burden, expense, and distraction of ongoing litigation.” In April, Clover settled a securities class action in which the class will receive $22 million, $19.5 million paid by the company’s insurance. Mobihealthnews

Walgreens Boots Alliance missed Wall Street expectations and lowered its outlook for the year. In their Q3, net earnings fell 59% to $118 million, mostly due to lower operating income. Their topline was healthy–$35.4 billion, up 9% year over year–driven by the US health provider segment (VillageMD, Summit Health, and CityMD plus at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions) which was up 22%. However, both retail consumer sales and CityMD underperformed due to the absence of COVID and a mild respiratory illness winter. Together with VillageMD’s clinic expansions, this led to an adjusted operating loss of $172 million for US Healthcare. WBA cut its earnings guidance for the year to $4.00 to $4.05 per share from its previous outlook of $4.45 to $4.65. Walgreens has been selling off businesses or investments that are peripheral to providing healthcare services, such as its investment in Option Care (above). FierceHealthcare, Healthcare Dive

News/deals roundup: Connect America finalizes Philips aging/caregiving buy; Amedisys-Contessa $250M hospital-at-home; UK’s Physitrack $20M IPO, Dutch motion tracker Xsens

July 7, 2021 | by | 2 Comments

Kicking off our week….

Connect America closed today (6 July) the purchase of Royal Philips’ Aging and Caregiving line of business. This includes the top basic personal emergency response system (PERS) device provider, Lifeline. Purchase price by Connect America’s owner, Rockbridge Growth Equity, was not disclosed. For Connect America, they now top 900,000 subscribers to PERS and monitoring services. At this point, the combined business will have 1,500 employees and 3,000 provider partners. Lifeline also includes services such as 24/7 response with their products: the HomeSafe traditional home PERS with and without AutoAlert fall detection and GoSafe2 mobile PERS with AutoAlert.

There is no indication from the company release or the brief Mobihealthnews article on whether the Lifeline brand name or others from Philips will be retained. Lifeline’s history dates back to 1974, with Philips adding the AutoAlert, HomeSafe, and GoSafe product after their purchase in 2006. Other undisclosed considerations are integration and rationalization of the current Connect America PERS and monitoring products with Lifeline. There is also a promotional partnership agreement with AARP that likely–but not necessarily–will transfer with the purchase. This Editor can tell you that a seat at AARP’s poker table requires a tall stack of chips.

Our earlier article on the acquisition profiles Connect America, Lifeline, and the decline of traditional/mobile PERS with the rise of accessible wristwatch and band forms that don’t scream ‘I’m at risk of falling and not being able to get up!’

Home healthcare provider Amedisys announced their $250 million acquisition of Contessa Health, extending into hospital-at-home and skilled nursing-at-home. As our Readers who looked at Ziegler’s analysis [TTA 25 June], this is a hot and tech-driven care area. Amedisys is claiming that they are the first home health, hospice, and personal care service provider to expand into Contessa’s business, which is hospital-at-home and skilled nursing facility (SNF) at-home including palliative care services launched recently with Mount Sinai Health System (NY). Contessa will operate as a separate division of Amedisys, which plans to invest in both the future growth of Contessa and their proprietary informatics platform CareConvergence with the aim of creating a “premier home-based health system”. The acquisition is expected to close on 11 August. Contessa has both hospital partnerships, which are the bulk of Amedisys’s client business, and joint venture/payer partnerships. Amedisys release, Hospice News

The UK’s Physitrack quietly went public with a raise of over $20 million. The IPO was listed on 18 June on the Nasdaq First North Premier Growth Market (Nasdaq Nordic, Sweden and Finland) earlier this month with an original offering of SEK 40 ($4.69) per share with 4.4 million shares in the offering. The market value is estimated at SEK 624 million ($72.5 million). Unfortunately, you cannot look beyond this investor page if you are in the US, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, Switzerland, South Africa, or South Korea as citizens of these countries cannot invest in their shares. Physitrack is a digital physical therapy plus patient engagement company headquartered in London with offices in Santa Monica, Houston, and Utrecht. It was in the first group of the NHS’ Digital London accelerator program and now is distributed in 100 countries serving 1 million patients. Mobihealthnews, Baker McKensie (legal advisor announcement)

And keeping it physical, Xsens, a Dutch 3D motion capture and attachable sensor company for therapy and ergonomics study, is extending into Automatic Reporting as part of its online MotionCloud platform. A full report, graphs, and a digital recording of an avatar completing the movements can be available to physiotherapists, health specialists, and ergonomic consultants in under two minutes. In addition, they announced a new Awinda Starter system which has their proprietary motion-tracking technology at a more affordable price. Xsens press release, Mobihealthnews

Care Innovations’ ‘record growth in 2015’; replaces CEO; GE departs partnership

March 3, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2013/02/gimlet-eye.jpg” thumb_width=”150″ /]Care Innovations‘ recent (undated) press release (discovered as a LinkedIn update), if read without a Gimlet Eye, could be read as another one of those ‘good news’ releases that build company awareness and get it picked up on websites such as TTA. Certainly there’s a nice spin of positive news for remote monitoring technologies, particularly more complex ones in vital signs monitoring and broadening out their applicability. (More on those below.) But the observant eye will pick out a couple of ‘aha!’ moments at this company that got slipped in, but not slipped by, the Eye.

The first is that GE has departed the building. Always the junior partner except for the very beginning in 2009, GE apparently exited sometime after December based on the last press release with Intel-GE identification issued 1 Dec 2015. The boilerplate company description is no longer ‘Intel-GE Care Innovations’ but now ‘Care Innovations, a wholly-owned subsidiary of Intel Corporation’. Lift your eyes to the company logo at the top left of the web page, and there it is, ‘An Intel Company’. GE is not fully cleansed, still to be found on product pages such as Health Harmony and QuietCare, as well as the copyright line at the bottom of each web page. (More work to be done)

The second is the appearance of CI’s new CEO, Randy Swanson, in the executive quote and on the ‘team’ website page. His bio notes that he’s a 17-year Intel finance/business development veteran, at one point with responsibilities in the Digital Health Group. Tea leaf readers might well surmise that Intel will now emphasize profitability at CI after the major repositioning and partner expansion during the 2.5 years of Sean Slovenski’s tenure (a non-Intel’er departed in January to Healthways, TTA 13 Jan).

The release also has a few more interesting moments. (more…)