CVS Health to acquire Signify Health for about $8 billion


Digital Health
September 05, 2022


Site editor:


Joaquim Cardoso MSc.
Health Transformation Journal

Home Based Care Institute
Primary Care Institute
September 5, 2022


CVS Health will acquire home health provider Signify Health for about $8 billion cash, the two companies announced Monday.


Terms of the definitive agreement call for the healthcare giant to pay $30.50 a share for Signify Health, the nation’s largest home health risk assessment provider. 

Amazon, UnitedHealth Group and Option Care Health were also reportedly interested in Signify Health.


Signify Health, is the nation’s largest home health risk assessment provider.

Amazon, UnitedHealth Group and Option Care Health were also reportedly interested in Signify Health.


Snapping up the Dallas-based company, along with the transaction’s price, highlights the critical role home health holds in bridging patient access issues, particularly during the COVID-19 pandemic as healthcare facilities closed and patient fears of contracting the virus led them to defer care.


“As we started to talk with [Signify Health CEO] Kyle Armbrester and company, we got excited about what Signify has built, as well as the strategic and cultural fit between our two organizations,” said Dr. Sree Chaguturu, CVS Health chief medical officer. 

“There’s two connection points here. It’s the ability for us to connect to consumers in the home as well as enable providers to better address patient needs across the care continuum.”


“There’s two connection points here. It’s the ability for us to connect to consumers in the home as well as enable providers to better address patient needs across the care continuum.”


CVS had been a customer of Signify’s for the better part of a decade, Armbrester said, adding the company offered Signify the best opportunity to grow, diversify, and make a better impact on consumers.



CVS Health has spent the last year teasing plans to acquire a home health provider, enablement tech or primary care asset. 


During CVS’ second-quarter earnings call last month, Chief Financial Officer Shawn Guertin hinted that more deals could come.


“There are multiple pathways to follow to achieve our vision,” Guertin said. “Our vision is new and differentiated, and thus there is no one-and-done asset there.”


Chaguturu said the company is looking for opportunities in primary care, primary care enablement and home care services. “Our relationship with Signify allows us to advance two of those three areas,” he said.


…the company is looking for opportunities in primary care, primary care enablement and home care services. “Our relationship with Signify allows us to advance two of those three areas,” 


Shares of Signify Health had been trading in the low $20s before word leaked that it was an acquisition target. On Friday, the stock closed at $28.77 per share.


The deal requires shareholder and regulatory approval. 


About 60% of Signify Health is owned by funds affiliated with New Mountain Capital, and those funds have agreed to vote their shares in favor of the transition, the companies said.


The companies said Armbrester would continue to lead Signify Health as part of CVS Health after the transaction closes, which is expected to be in 2023’s first half.



The deal heightens competition among CVS Health’s Aetna, Humana and UnitedHealth Group’s UnitedHealthcare, the three largest Medicare Advantage carriers and Signify Health’s three largest customers.


UnitedHealth Group Optum’s healthcare services arm operates the second-largest home health risk adjustment provider HouseCalls, which will conduct 2 million home visits in 2022, Cowen analyst Gary Taylor wrote in an August research note. 

Humana last year bought the remaining shares of Kindred at Home, purchasing the nation’s largest home health provider to $8.1 billion.


CVS Health’s deal for Signify Health could inspire these and other large Medicare Advantage carriers to end their business with Signify to avoid conducting business with their competitor, Taylor wrote.


“We recognize Signify has over 50 plus health plan clients in addition to Aetna, so we see this as payer agnostic opportunity for us to help support the industry,” Chaguturu said. 

“We want to improve care for Medicare Advantage members across the country, whether that be with Aetna or any other plan.”


During the second quarter, 84%, or $246.2 million, of Signify Health’s revenue came from home visits it conducted for these and other insurers. 

Despite CMS’ proposed reimbursement cuts, in-home evaluations remain a critical way for Medicare Advantage insurers to maximize their profits.


The Centers for Medicare and Medicaid Services pays Medicare Advantage insurers a flat fee to cover patients based on their medical condition, which insurers measure through risk codes. 


Although the majority of these codes are recorded through office visits, home care is a growing and controversial means insurers are using to capture these data points. 

Home health risk assessments “may be particularly vulnerable to misuse by Medicare Advantage companies” since they are performed by the companies themselves or by vendors that insurers hire, according to a report published last year by the Health and Human Services Department’s Office of the Inspector General.


Federal auditors are investigating Aetna for inflating Medicare Advantage risk codes.


“The company expects CMS and the OIG to continue these types of audits,” CVS Health wrote in the August 2021 regulatory filing that disclosed it was under investigation.



Signify Health conducted 1.9 million in-home assessments for insurers in 2021, according to its most recent annual report. 


The company will conduct 2.4 million assessments in 2022, Taylor wrote.


In addition to recording patient conditions, Signify Health claims its services help Medicare Advantage plans achieve higher Star ratings, which are also a crucial metric in determining how much federal dollars insurers receive.


As CMS mulls ways to restructure more of its accountable care programs to incentivize bridging healthcare disparities, Signify Health’s vast data repository could also be an asset to insurers looking to develop new programs around the social determinants of health.


As CMS mulls ways to restructure more of its accountable care programs to incentivize bridging healthcare disparities, Signify Health’s vast data repository could also be an asset to insurers looking to develop new programs around the social determinants of health.


Originally published at https://digitalhealth.modernhealthcare.com on September 5, 2022.

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