Humana Agrees to Acquire Bankrupt Florida Provider The Villages Health for $50M

Humana, a major player in the health insurance industry, has made a significant move in the healthcare provider space by agreeing to purchase The Villages Health (TVH), a debt-laden Central Florida healthcare provider, for $50 million. This acquisition, if approved, will further expand Humana's medical network and strengthen its position in the integrated care market.

Bankruptcy Filing and Acquisition Details

The Villages Health, serving a large retirement community in Florida's Sumter County, recently filed for Chapter 11 bankruptcy after discovering substantial Medicare billing errors. These errors resulted in TVH owing the federal government $361 million in overpayments and penalties. The provider's total estimated liabilities range from $100 million to $500 million, against estimated assets of $50 million to $100 million.

Humana's health services subsidiary, CenterWell, has entered into a "stalking horse" purchase agreement for TVH's assets. This preliminary bid of $50 million sets the floor for a subsequent auction of the bankrupt company's assets. The deal includes TVH's eight primary care centers and two specialty care centers, which would be integrated into CenterWell's growing portfolio of medical offices.

Strategic Implications for Humana

This acquisition aligns with Humana's ongoing strategy to expand its CenterWell division, which focuses on providing primary care to enrollees in its insurance programs. By owning healthcare providers, Humana aims to:

1. Improve care coordination and patient outcomes
2. Reduce costs by keeping a larger share of members' healthcare spending in-house
3. Diversify revenue streams by offering medical services to other payers

CenterWell has been experiencing significant growth, with the division posting operational income of $392 million in the first quarter of 2025, a 39% increase year over year. At the end of 2024, Humana operated more than 340 primary care centers through its CenterWell Senior Primary Care and Conviva Senior Primary Care brands, with plans to add up to 30 new centers in 2025.

Impact on Patient Care and Next Steps

Bob Trinh, TVH's CEO, emphasized that the bankruptcy filing and potential sale to CenterWell were necessary to ensure continuity of care for TVH's more than 55,000 patients. He stated, "This was by no means an overnight decision, nor has it been an easy one. We want to reassure our community that there will not be any effects on patient care experienced by our patient population."

The sale of TVH to CenterWell is still subject to court approval, and other parties may outbid CenterWell in the bankruptcy auction process. Meanwhile, TVH continues to work with Medicare to correct the billing issues, a process that is separate from the potential sale to CenterWell.

As the healthcare industry continues to evolve, this acquisition highlights the growing trend of vertical integration between insurers and providers, aimed at improving care coordination and controlling costs in an increasingly complex healthcare landscape.