Dr. Kiran Patel strikes gold with Medicare HMOs. Again.
Dr. Kiran Patel of Tampa, who donated $12 million to University of South Florida on Tuesday, can well afford the gift. His fast-growing Medicare Advantage plans are booming.
Patel’s plans, which operate in five states under the umbrella corporation America’s 1st Choice Holdings, will take in more than $1 billion this year, according to analyst Carl McDonald of Citigroup Global Markets.
When Health News Florida asked whether McDonald’s estimate was accurate, Patel said the total is closer to $1.4 billion.
That includes $350 million in annual revenue from his California plan, Easy Choice, he said. Last month, Tampa-based WellCare Health Plans announced it was buying Easy Choice for an undisclosed sum.
But Patel still controls plans in North Carolina, South Carolina, New York and Florida. When he gets ready to sell those, he said, the deal will be so big “I won’t be able to keep it secret.”
Most of the 91,000 members in America’s 1st Choice are in Florida, enrolled in Freedom Health and Optimum Health Care. In Florida, Medicare payment rates are among the highest in the nation, McDonald said.
The plans, which operate out of a modest set of offices behind a motel in Tampa, added 30,000 Medicare members in the past year – a growth rate of 50 percent, McDonald said.
Patel said that when he took over Freedom and Optimum in 2007, they had combined losses of $13 million. He built them into a billion-dollar company in just five years, boosting employment from 100 to 800 during a recession.
That’s what drives Patel. “I enjoy it,” he said.
It’s not the first time he’s turned around a managed-care plan. He bought a struggling Medicaid plan called WellCare in 1997 and parlayed it into a multistate phenomenon, selling it in 2002 for $117.5 million.
(The investors took the company public and its growth was impressive until late 2007, when federal officials made public charges of Medicaid fraud against the company and its former executives. The company paid $80 million in May 2009 and reached a civil settlement with the Department of Justice for $137.5 million in 2010. In 2011, a federal judge approved a $200-million class-action settlement. Criminal charges are still pending against three former executives.
(Patel was long gone when the fraud began, records show.)
When Patel sold WellCare, he signed a non-compete agreement that kept him out of the managed care business for five years, during which he created the Foundation for Global Understanding. That led to the Patel College of Global Sustainability at USF, announced on Tuesday with a $12-million endowment from Patel and his wife, Dr. Pallavi Patel.
Altogether the couple has donated $26 million to the university, where Kiran Patel sits on the board of trustees.
The Patel school recently entered a partnership with a UN affiliate to conduct research on emerging urban areas around the world. The college is expected to enroll up to 200 students pursuing graduate degrees in Global Sustainability.
--Health News Florida, journalism for a healthy state, is part of WUSF Public Media. Question? Comment? Contact Carol Gentry, Editor, at 727-410-3266 or Carol.Gentry@HealthNewsFlorida.org.