Evolent Health Announces Agreement Between Molina Healthcare and Passport Health Plan for Molina

By AIT News Desk On Jul 17, 2020

Agreement provides continuity of care and coverage for Passport members amidst the pandemic, secures hundreds of Kentucky-based jobs and continues Passport’s legacy

Evolent Health, Inc., a health care company that delivers proven clinical and administrative solutions to payers and providers, announced that Molina Healthcare, Inc. and Passport Health Plan have entered into a definitive agreement for Molina to acquire certain assets of Passport, including Passport’s brand, operational and clinical infrastructure, and certain provider and vendor agreements. The parties have also entered into a separate transaction for the sale of Passport’s real estate holdings to Molina.

Under the terms of the transaction, it is anticipated that Molina will assume the Passport membership upon regulatory approval. Evolent will continue to provide comprehensive services to the plan through the end of the year under the existing terms of its services contract. In addition, Molina and Evolent have entered into an agreement for Evolent to provide specialty care management services for cardiovascular care in Kentucky beginning in 2021 with the potential for additional states. As part of the transaction, Molina will also extend continued career opportunities for hundreds of Kentucky-based employees supporting the plan.

“We believe this agreement is a testament to Passport’s unique legacy of service to its community, as well as the plan’s ability to innovate and drive strong operational and clinical performance,” said Evolent Health Chief Executive Officer Frank Williams. “We are heartened that this agreement provides continuity of care and coverage for Passport members during the ongoing public health crisis. We also feel that this outcome is very positive for Passport’s members, the city of Louisville and the hundreds of employees who support the plan, as well as the current owners.”

Transaction Details

Per the terms of the agreement, Molina will acquire certain assets from Passport Health Plan, including Passport’s brand, operational and clinical infrastructure, and certain provider and vendor agreements. Under a separate agreement, Molina will also purchase Passport’s real estate holdings.
Molina is acquiring certain assets up-front for $20M and paying a performance fee of up to $40M based on member retention by Molina at the beginning of 2021.
Based on Passport’s current statutory capital level of 250%+ Risk Based Capital as of June 30, 2020, the implied total valuation range, including statutory capital, for the health plan is $150M-190M+.
Molina and Evolent have entered into an agreement for Evolent to provide specialty care management services for cardiovascular care in Kentucky beginning in 2021 with the potential for additional states.
Molina has agreed to operate Passport Health Plan as soon as regulatory approval is obtained, with management and transition support services to be provided by Passport and its majority owner, Evolent Health, Inc., through the end of the 2020 calendar year. The transaction is subject to regulatory approvals and other customary closing conditions. The transaction is expected to close before the end of 2020.

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