Dr. Kiran Patel of Tampa, who already has two small but fast-growing Medicare HMOs, said he has offered to take over Universal Health Care, a financially-troubled company based in St. Petersburg.
While there are still many unknowns, he said, he understands Universal’s liabilities are somewhere between $50 million and $100 million. He said that if Universal doesn’t get a bailout, the state will place it in receivership.
Patel said Friday that he told the Office of Insurance Regulation earlier in the day on the phone of his willingness to take it on, and that insurance regulators asked him to put it in writing. He said he was preparing that paperwork and would send it in right away.
In the past, state insurance officials have preferred to see financially weak plans be taken over by experienced and financially successful companies - rather than go into receivership and become the state’s problem. Also, it provides more continuity for patients.
Patel said that there will inevitably be layoffs in St. Petersburg, where Universal has its headquarters in a downtown high-rise. Patel’s health plans operate out of a warehouse-like building behind a motel on North Dale Mabry in Tampa.
Patel said Universal has two problems: administrative bloat and low quality ratings from Medicare. He can solve the first problem, he said, but the second will be a heavier lift.
“This is not going to be easy,” he said. “This by no means will be a walk in the park.”
A.K. Desai, founder, chairman and CEO of Universal, responded with a written comment:
“We are working together to find a constructive solutions which takes care of our beneficiaries, our employees and continued emphasis on great service and high quality care,” he said.
Insurance Department officials have not commented on recent questions about Universal’s financial problems, saying that by law they cannot mention an ongoing matter.
Patel’s offer comes just two days (LINK) after a previous suitor left Universal standing at the altar. MBF Partners, an investment group chaired by Miami multimillionaire Miguel “Mike” Fernandez, had announced a week ago that it planned to acquire most of Universal’s assets.
On Wednesday, MBF Partners’ public relations agency released a terse statement, saying the two companies “mutually agreed not to proceed.”
Patel’s company, which is privately held, operates health plans in five states. Patel said they took in about $1.4 billion last year.
Most of the 91,000 members of Patel’s combined plans are in Florida, enrolled in Freedom Health and Optimum Health Care.
Patel has shown a gift (LINK) for turning around health plans that are losing money. Freedom Health and Optimum Health Care were quite small and losing money when he took them over in 2007.
In 1997 he bought Wellcare Health Plan and sold it in 2002 for $117.5 million to a group of investors who took it public.