Tufts Health Plan Acquires Peterson Partners-Backed Integra Partners

September 2, 2015 | The Wall Street Journal | Health insurance provider Tufts Associated Health Plans Inc . has bought Integra Partners Holdings LLC, a benefit management company backed by Peterson Partners.

Founded in 2005 and based in New York, Integra is a specialty benefits manager providing outsourced claims management software connecting orthotics, prosthetics and durable medical equipment providers with health plans and their patients. The company serves more than 15 million patients nationwide, Tufts Health Plan said in a statement.

Peterson, of Salt Lake City, led a growth equity investment into Integra in 2011. A news release issued at the time said a group of investors participated in the deal, including Bob Dahl, a former head of Carlyle Group ‘s global healthcare group; Orrin Feingold, a former chief financial officer of managed-care provider Multiplan Inc .; and Integra Chief Executive Andrew Saltoun, who founded investment firm Duane Street Capital.

The Federal Trade Commission late last month gave Peterson antitrust clearance to divest Integra from its Peterson Partners VI LP fund, which closed with $55 million in 2011. The FTC issues early antitrust notifications when the agency and the U.S. Department of Justice don’t believe a proposed transaction would violate U.S. antitrust laws.

Founded in 1979, Watertown, Mass.-based Tufts Health Plan is a local health insurance organization offering members and employers in Massachusetts and Rhode Island an array of health management programs in both the commercial and the subsidized markets, where reimbursements are funded by Medicare or Medicaid.

Tufts Health Plan said on its website that as of March 31, it had over 1 million members, 62% of whom were in commercial plans, 26% were on Medicaid and in state-sponsored programs, and the remainder senior citizens.

Tufts Health Plan said in the statement that Integra “represents the alignment of two organizations that share the mutual goals of increasing access to high-quality care while reducing administrative costs.”

It added that Integra will continue to be based in New York and led by Mr. Saltoun and his management team.

The deal comes on the heels of a consolidation frenzy among national health insurers, which saw Aetna Inc . agreeing to buy Humana Inc . for $34.1 billion in cash and stock, and Centene Corp . agreeing to buy Health Net Inc . for $6.3
billion, both announced in early July.

Data provider IBISWorld said in a November research note that the health maintenance organization industry, with $108.2 billion in annual revenue, suffered a mild revenue decline over the previous five years as providers lost ground in the employer-sponsored health insurance market. It added, however, that the industry was poised to grow at a 2.8% annual growth rate between 2014 and 2019 to reach $124 billion in annual revenue, as operators seek to maintain their profit margins by passing along medical cost inflation to consumers in the form of increased premium rates.

Peterson Partners makes investments of between $2 million and $20 million, providing growth and buyout capital for companies in the U.S., Canada and Brazil, its website said. Peterson raised Peterson Partners VII LP in 2013,
amassing $140 million.


By Amy  Or

Write to Amy Or at amy.or@wsj.com