Report: CVS to Bid for Home Health Solutions Provider Signify Health

CVS Health is planning to bid for home healthcare company Signify Health, sending Signify's stock soaring, according to a report by the Wall Street Journal.

CVS and Signify Health declined to comment when mHealthIntelligence reached out to confirm the report.

Signify Health's purported goal is to boost home-based healthcare. The company has created analytics solutions to help payers and providers establish and grow value-based payment programs and drive care into the home. It offers tools designed to manage risk and find opportunities to improve patient outcomes and care coordination and reduce costs.

According to a previous Journal report, the company has been considering strategic alternatives, including a sale, a year and a half after its $567 million initial public offering.

People close to the matter told the Journal that CVS is planning to make a bid alongside other managed care providers and private equity firms. Since the news leaked, the price of Signify Health shares rose from $19.87 on Friday to $22.8 as of 12:10 pm ET on Aug. 8. The company reportedly has a market value of $4.7 billion.

Signify Health's most recent financial statement shows that though it earned revenues of $246.2 million in the second quarter of 2022, up 16 percent from Q2 2021, it also experienced a net loss of $490 million. This included the $519.9 million loss the company suffered on impairment related to shutting down its Episodes of Care Services (ECS) segment.

Early in July, Signify Health announced it would wind down its ECS segment to focus on its Home and Community Services (HCS) business and acquisition of Caravan Health, which supports accountable care organizations' population health management and value-based payment programs.

Further, Signify Health said in July that it would exit the Centers for Medicare and Medicaid Services Bundled Payments for Care Improvement-Advanced (BPCI-A) program "in light of the newly released CMS retrospective trend calculations that lowered target prices for episodes, thereby reducing the opportunity for savings," according to the press release.

In a recent earning call for CVS Health, during which the company announced an 11-percent spike in revenue from $72 billion in Q2 2021 to $80 billion in Q2 2022, leaders noted that its priority areas are primary care provider enablement and home health. The retail giant had even been considering a deal to buy the parent of primary care provider One Medical before Amazon announced plans to scoop up the company last month, according to the Journal.

The news of CVS planning to bid for Signify Health comes a few months after CVS launched a virtual care solution for members of Aetna, the health insurer it bought in 2018, and CVS Caremark, its pharmacy benefit manager. Telehealth provider Amwell is working with CVS to launch the service.