Centene Eyes Value-Based Care with AI Vendor Apixio Acquisition

Centene Corporation has signed a definitive agreement to acquire Apixio Inc., a healthcare analytics company that offers artificial intelligence (AI) technology solutions, in a move the payer said will boost value-based care efforts.

The transaction, which is subject to regulatory approvals, is expected to close by the end of 2020.

Apixio’s AI platform provides a technology suite that mines, compiles, and analyzes unstructured patient data like physician notes and medical charts. With this data, Apixio’s suite creates and refines algorithms to obtain high-quality insights for both payers and providers.

The AI platform has been designed to deliver proven results by handling the intricacies of the healthcare industry.

"Centene is committed to accelerating innovation, modernization and digitization across the enterprise and solidify its position as a technology company focused on healthcare,” said Michael F. Neidorff, chairman, president, and chief executive officer of Centene. “Apixio's capabilities are closely aligned with our plans to digitize the administration of healthcare and to leverage comprehensive data to help improve the lives of our members.”

"Apixio's technology will complement existing data analytics products including Interpreta, creating a differentiated platform to broaden support for value-based healthcare payment and delivery with actionable intelligence,” Neidorff continued.

Apixio will remain an operationally independent entity when it joins Centene's Health Care Enterprises group.

"We are very excited about this transaction. With Centene, we will be able to accelerate the use of our AI technology to improve the way that healthcare is measured, administered, and delivered, and to help enable new discoveries," said Darren Schulte, MD, chief executive officer of Apixio. "This partnership positions Apixio to extract insights from digital data to help millions of individuals receive higher quality care around the world."

Earlier this year, Centene merged with WellCare to create the largest health insurer by membership, covering over 24 million individuals.

“We are pleased to have completed this transformational acquisition to create a leading healthcare enterprise committed to helping people live healthier lives through access to high-quality and affordable healthcare solutions,” Neidorff said at the time of the announcement.

Now that Centene and WellCare have merged, the company will have approximately $100 billion in annual revenues that flow through mostly public healthcare programs, according to a Centene investor update from in May 2019. Medicaid makes up about two-thirds of the combined payer’s portfolio and another 14 percent is through Medicare and Medicare drug plans.

Stockholders at Centene and WellCare gave the Centene-WellCare merger a 99 percent approval rating. According to the companies, the benefits of the merger are:

• Increased scale and diversity of services
• Common dedication to community-level, with a particular emphasis on tackling social determinants
• Larger national footprint
• Mid-single digits adjusted diluted earnings per share in the Year 2
• $500 million net cost synergies by the Year 2

“We will create a more competitive, diversified company that is better able to deliver fully integrated, high-quality, cost-effective services for our members and government partners,” Neidorff said in the announcement in March.

Neidorff became the new chairman and CEO of the combined company, with WellCare’s CEO Ken Burdick taking senior management team positions.

Burdick also said the merger was a step in the right direction for the insurance company.

“In addition to proving additional opportunities for our employees and better health outcomes for our members, this transaction provides WellCare with an opportunity to become part of a leader in the field, with full access to their systems and capabilities which support enhanced quality for recipients,” he said in an announcement.

Together, Centene-WellCare has members dispersed across all 50 states, of which over 12 million are Medicaid beneficiaries and 5 million are Medicare members, not including Health Insurance Marketplace and TRICARE members. The combined company also boasts 31 National Committee for Quality Assurance (NCQA) accredited health plans.