AvMed Health Plan, one of Florida's largest HMOs, agreed Oct. 1 to buy St. Augustine Health Care, a money-losing, provider-owned health plan with 23,000 enrollees in the Tampa, Fla., area.
St. Augustine lost nearly $8.4 million on revenues of just $15.2 million in 1997, the last period for which figures are available.
The sale is expected to close by Oct. 15, after an expedited review by the Florida Department of Insurance, said Valerie Rubin, a spokeswoman for Miami-based AvMed. Financial terms were not disclosed.
The sale also has ramifications for Oxford Health Plans of Norwalk, Conn., which holds a 19% stake in St. Augustine. Officials at Oxford want to exit noncore markets in Florida, Illinois and New Hampshire, and this deal is part of that broader strategy (See related story, p. 50).
About 35 independent physicians own the remaining 81% of St. Augustine Health Care, which they formed in late 1994.
The pending acquisition will give 374,000-enrollee AvMed a renewed foothold in the Medicaid market, which it exited two years ago. All but about 6,000 of St. Augustine's enrollees are covered by its Medicaid HMO program.
AvMed was founded in 1969 and became a not-for-profit HMO four years later. Its primary markets are major cities such as Miami, Orlando, Jacksonville and Tallahassee. It boasts nearly 300,000 commercial enrollees and another 74,000 Medicare risk enrollees.
St. Augustine was licensed as a Medicaid HMO in June 1995 but didn't begin offering commercial HMO and point-of-service plans until two years later.