Dive Brief:
- CVS Health has sold its Medicare Shared Savings Program business to value-based care services firm Wellvana in an all-stock deal, the healthcare giant said Tuesday.
- With the purchase, Wellvana will become “one of the largest” value-based care support companies, working with providers in 40 states and serving about 1 million Medicare beneficiaries, according to a press release.
- The deal also gives CVS a strategic minority stake in Wellvana. Detailed terms of the transaction weren’t disclosed.
Dive Insight:
Shared Savings, or MSSP, is Medicare’s largest value-based care program.
Under MSSP, providers band together in accountable care organizations and take on financial risk for patient care, with the goal of offering coordinated services that reduce unnecessary spending or medical errors. In 2023, the program saved the government a record-breaking $2.1 billion, according to the CMS.
Providers sometimes join ACOs managed by value-based care enablement companies, which can help them transition to the payment arrangement, pull together more data and manage risk-based contracts.
CVS’ enablement services include customers using two CMS value-based care programs, MSSP and the ACO Realizing Equity, Access and Community Health (REACH) Model, which included more than 1 million patients at the end of 2024, according to a securities filing.
Despite the MSSP divestiture, the healthcare giant will continue to focus on value-based care through its healthcare delivery units, like its senior primary care clinic chain Oak Street Health, and through ACO contracts with its insurer Aetna, CVS said in a press release.
The deal comes after CVS saw its profits cut nearly in half last year as its Aetna insurer struggled with heightened medical costs. The company’s health services segment, which includes its value-based care offerings, reported revenue down about 7% from the previous year, while its adjusted operating income fell 0.9%.
