This is Jacob Emerson with the Becker's Payer Issues podcast. Here is your biweekly industry news briefing for July 29th. Optum is closing clinics in multiple states and laying off 524 employees across California. According to regulatory documents filed July 18th, the UnitedHealth Group company will terminate those employees in California starting September 16th through January of 2025 at clinic and administrative office locations in the Bay Area and Southern California.
The layoffs include some roam remote employees in other states. At Optum California's corporate office in El Segundo, 64 employees will be laid off. Another 157 employees will be laid off at an office in Cerritos. Landmark employees began posting on social media begin July 18th regarding a large reduction in force they say occurred nationwide. Optum described permanent closures at an additional 15 addresses in California, including urgent and primary care
clinics, infusion services, facilities, and medical groups. Across those facilities, 303 employees will be terminated. Well, the justice department is pointing to antitrust scrutiny for why Optum backed out of its planned acquisition of Steward Healthcare's physician group Stewardship Health. Steward, which filed for chapter 11 bankruptcy back in May, is working to offload its 31 hospitals alongside Stewardship Health. Steward was also recently hit with a criminal investigation
by Stewardship Health. Steward was also recently hit with a criminal investigation by federal prosecutors at the US attorney's office in Boston. Optum backing out of acquiring Stewardship Health comes amid an antitrust investigation that the DOJ opened into UnitedHealth Group back in February. The investigation is partially looking into Optum's physician group acquisition and how the health plan and physician unit ownerships impact competition.
Optum employs or is affiliated with more than 90,000 physicians. Well, Centene says it will exit a handful of state Medicare Advantage markets in 2025. On a July 26th investor call, its CEO, Sarah London, said the exits are designed to align with the company's company's longer term strategy. She said, we think the team has done a really good job in terms of thoughtfully designing bids consistent with our long term strategy
even in a challenging bright year. We're being thoughtful about how to streamline that book further in alignment with our Medicaid footprint because that's where the puck is going. Centene is focused MA plans for beneficiaries duly eligible for Medicaid and Medicare. Other payers said they have also planned to exit the MA markets in 2025 as they face rising medical costs and a tougher reimbursement environment.
Humana CFO, Susan Diamond, said in April that the company anticipates leaving some markets in 2025 and expects a decline in membership. A similar message came from CVS Health executives earlier this year. Molina Healthcare has more acquisition opportunities in the pipeline. That's according to its CEO. In July, Molina said it plans to acquire ConnectiCare, a subsidiary of EmblemHealth in New York City, for $350,000,000.
On a July 25th earnings call with investors, Molina CEO Joseph Zebratsky said the ConnectiCare acquisition is a departure from its previous mergers and acquisitions strategy. Historically, the company has only established marketplace and Medicare lines in areas where Molina already operates Medicaid businesses. Medicare operates Medicare Marketplace and some commercial plans in Connecticut. Connecticut would be the 2nd major acquisition for
Molina in less than a year. Back in January, the company closed on its purchase of Bright Health Care's Medicare Advantage Business for $500,000,000 adding over 100,000 members to its ranks. Over 80% of Molina's 5,600,000 total members are within the Medicaid business through its past due though its past due acquisitions were not Medicaid plans, they are still core acquisitions for Molina's business according to mister
Zubretsky. And he said they have a very active pipeline of Medicaid acquisition opportunities on the horizon, hopefully over the next 12 to 18 months. Well, Humana is partnering with Google Cloud on cloud infrastructure and AI capabilities. The agreement builds on a previous partnership between Humana and Google to develop population health solutions.
The financial terms of that deal was not disclosed, but they're hoping that can make contact centers more responsive, provider networks simpler to navigate, health care coverage easier to understand, and primary care better tailored to individual needs. Centene is selling collaborative health systems to Astra Health for an undisclosed amount. CHS is based in Tampa, Florida. It's a management services subsidiary that partners with independent primary care physicians
around value based care models. It currently has it currently works with a 129,000 beneficiaries across 17 states. Astrana, it's formerly called ApolloMed. They offer technology solutions that enable providers to participate in value based arrangements. They work with 10,000 providers and 1,000,000 patients. Pending regulatory approvals, that deal with Centene is expected to close by the end of 2024.
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