A more equitable regulatory environment in New Hampshire has revived the acquisition of Matthew Thornton Health Plan by Harvard Pilgrim Health Care, the New England managed-care giant.
Last month, Harvard Pilgrim signed a letter of intent to acquire Bedford, N.H.-based Matthew Thornton for $75 million. About $60 million of that would be paid when the deal closes, and up to $15 million would be paid over the ensuing five years, depending on Matthew Thornton's performance.
Brookline, Mass.-based Harvard Pilgrim has 1.1 million enrollees in Maine, Massachusetts and Rhode Island. It also has about 10,000 enrollees in New Hampshire. Matthew Thornton, meanwhile, has 139,000 enrollees, most of them in New Hampshire.
The buyout is the second attempt by the hospital owners of Matthew Thornton to get out of the managed-care business. Dartmouth-Hitchcock Medical Center in Lebanon, N.H., owns Matthew Thornton.
Last February, the two plans called off a deal that had been 18 months in the making. They killed the deal after New Hampshire's insurance department placed a number of restrictions on Harvard Pilgrim's operation of Matthew Thornton.
Health plan officials also blamed the New Hampshire attorney general's office, which said Harvard Pilgrim couldn't continue the exclusive service contract between Dartmouth-Hitchcock physicians and Matthew Thornton.
The state subsequently passed a law that barred exclusive contracts between HMOs and physicians.
That change "leveled the playing field," clearing the way for this acquisition to proceed, a Harvard Pilgrim spokesman said.
The parties don't expect the deal to close for several months, pending regulatory approval.