Centene will divest Apixio, an artificial intelligence platform, as the health insurer continues to review its portfolio while focusing on its health benefits businesses.
Centene chief executive Sarah London Wednesday said Apixio, an AI platform “that enables value-based care” would be better served under the ownership of New Mountain Capital, an investment firm with more than $37 billion in assets under management. The transaction is subject to regulatory approvals, the companies said in announcing the definitive agreement to sell Apixio.
“Apixio has been a trusted business partner since our relationship began in 2015,” said Sarah M. London, Chief Executive Officer of Centene, which acquired Apixio in December of 2020.
Centene said Apixio compiles and analyzes large volumes of “structured and unstructured” data “to develop high-fidelity patient health profiles and support value-based care programs.”
“As part of our ongoing portfolio review, it was important for us to find a strategic partner for Apixio with whom the business can continue to grow, innovate and thrive, London added. “We are confident that New Mountain Capital is well positioned to ensure that Apixio continues to support the success of its clients given their sector expertise and long-term focus.”
The moves come during a key period for Centene, which sells an array of government subsidized health insurance including Obamacare, and is facing more competition in these markets. It’s the latest divestiture for Centene, which has already sold off some European operations to focus more on the U.S.
Centene last week reported first quarter profits of more than $1 billion as membership grew by more than 2 million thanks to an increase in Obamacare and Medicaid enrollment, the health insurer said.
Centene, which sells an array of government subsidized health insurance including Obamacare and Medicaid for low income Americans, said total managed care membership increased by more than 2 million members to 28.45 million, compared to 26.2 million at the end of the first quarter of 2022.
In particular, Centene’s enrollment in individual coverage under the Affordable Care Act, also known as Obamacare, grew what Centene calls its “commercial marketplace” business to more 3 million members from 2 million a year-ago. Meanwhile, total Medicaid enrollment Centene manages via contracts with states jumped by more than 1 million to more than 16.3 million.
Financial terms of the Apixio sale weren’t disclosed but Centene “expects the transaction to be neutral to 2023 adjusted earnings per share,” the company said.
“We admire Apixio as a leading healthcare technology company that offers a differentiated value proposition using machine learning and analytics,” said Matt Holt, Managing Director and President, Private Equity at New Mountain Capital. “Through continued investment in products, services and technology, we are excited to build Apixio into a ‘connected care’ platform that brings together critical infrastructure to enable the shift to outcomes-based reimbursement models.”