Self-funded Pennsylvania-based health plan Imagine360 is buying Ardent Health’s third-party administrator (TPA) HealthFirst, the two companies revealed Jan. 15.
As part of the deal, Imagine360 will also acquire two related companies—Medical Management Solutions and Risk Funding Alternatives. The medical management division will be folded into Imagine360’s team.
Other terms were not disclosed, but Imagine360 said HealthFirst’s employees will be retained.
HealthFirst was the TPA partner of UT Health East Texas, a health system jointly owned by the University of Texas and Ardent Health, for nearly 30 years. The health system has more than 2,300 providers and covers more than 14,000 patients.
“That was attractive to us,” said Imagine360 President and CEO Jeff Bak in an interview with Fierce Healthcare. “What we saw in our review was a really good claims administrative system.”
Imagine360 positions itself as an alternative to a large BUCAH plan, otherwise known as Blue Cross, UnitedHealthcare, Cigna, Aetna and Humana. They began working closely with Ardent, a large health system, in March along with Quantum Health, a care navigation platform guiding employees to clinicians within Ardent’s network.
Health systems are not unlike other employers, said Bak, as they too are looking to rein in out-of-control healthcare costs.
“They wanted to see more utilization within their systems,” he explained. “They were not getting as much steerage to their own providers as they’d like. Outside of their own footprint, it was really expensive in terms of how they were reimbursing their competitors.”
Imagine360, which has nearly 1,000 clients, uses reference-based pricing when employees use non-Ardent facilities. HealthFirst will likely be deployed to other health systems.
“We’re thrilled about the complementary capabilities of HealthFirst and Imagine360 that will enable HealthFirst to continue thriving in East Texas and beyond,” said Donald Baker, UT Health East Texas regional president, in a statement. “We’re excited that HealthFirst will remain a valued service provider for UT Health East Texas.”
Bak said the company is still looking for other acquisitions that may make sense, noting the current environment is a buyer’s market. He notes that other health systems are facing similar cost control troubles along with employers of all sizes.