Magellan Health Announces Acquisition of Majority Interest in Bayless Integrated Healthcare

Magellan acquires a majority interest in Bayless, a leading integrated behavioral and primary care provider in Arizona

Magellan Health, Inc., one of the nation’s leaders in managing complex, high cost healthcare, announced it has completed the acquisition of a 70 percent interest in Bayless Integrated Healthcare, a leading integrated outpatient behavioral health and primary care provider in Arizona.

“This includes the development of clinical and operational best practices supported by a technology platform that integrates clinical capabilities and could serve the needs of preferred partners.”

Founded in 1982, the Bayless integrated care model offers physical, emotional, behavioral, and addiction healthcare services supported by 330 employees, including 175 providers, across eight locations in central Arizona. Bayless’s practice integrates primary care physicians with behavioral health providers and population health caregivers and has expanded rapidly in recent years due to strong payer relationships and increases in staff, locations, and patient demand. Bayless has a rich tradition serving the Medicaid population as a network provider for many of the managed care plan participants in Arizona’s Medicaid program for over 30 years.

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In addition, Bayless is designated as a URAC accredited telehealth provider and offers telehealth services statewide in Arizona. Bayless will serve as a growth platform for Magellan to enter new geographies as a partner to, or a provider of, integrated primary care and behavioral health in support of the Company’s collaborative care model, Magellan Connect. The partnership between Magellan and Bayless will help expedite Magellan’s strategy to scale an industry-leading, technology-enabled, integrated care model.

“We are excited to welcome Bayless Integrated Healthcare to Magellan Health because the organization brings important new provider capabilities and insights to Magellan’s reimagined behavioral health strategy. Bayless’s innovative model has successfully delivered integrated behavioral and physical healthcare for decades, resulting in better quality care for patients and savings for payers. Magellan sees a substantial opportunity to leverage their integrated model and telehealth capabilities to increase provider availability and access to high quality care,” said Kenneth Fasola, chief executive officer, Magellan Health.

“Our Bayless model works because we treat each individual with a ‘whole person’ approach,” said Justin Bayless, chief executive officer of Bayless Integrated Healthcare. “I’m excited about this new journey with Magellan Health, not only because of Magellan’s commitment to serving complex populations and forward-thinking solutions to some of our country’s most challenging healthcare issues but because this furthers our ability to take the Bayless model into new markets. Now we have a larger, more direct path to improving lives and transforming healthcare. Our Bayless team will continue delivering exceptional care to our clients. Nothing changes locally with the exception of our ability to tap into Magellan resources, which will enhance and strengthen our client and provider relationships.”

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“We look forward to working with Justin who remains CEO of Bayless and will lead the initiative to scale the Bayless model across new geographies,” said Fasola. “This includes the development of clinical and operational best practices supported by a technology platform that integrates clinical capabilities and could serve the needs of preferred partners.”

Under the terms of the purchase agreement, within 36 months of this closing date, Magellan and Bayless’s owners have certain call rights and put rights, respectively, with respect to the transfer to Magellan of the remaining equity in Bayless. Magellan expects the transaction to be neutral to slightly positive to 2021 net income and will provide other details about the financial impact of its provider strategy when it reports fourth quarter 2020 earnings. Bayless will operate within Magellan’s Healthcare segment.

Morgan Stanley & Co. LLC served as exclusive financial advisor to Bayless Integrated Healthcare. MTS Health Partners LP served as exclusive financial advisor to Magellan Health.

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