London’s biggest GP ‘provider’, AT Medics Ltd, has just been sold to the UK subsidiary of a US subprime health insurance profiteer with a long record of fraud, financial dishonesty, health care mismanagement and lack of compliance with Medicare/Medicaid contracts.
13 Clinical Commissioning Groups are involved. They’re supposed to carry out due diligence on takeovers. Where is it?
Operose Health Ltd, owned by Centene Corporation and with 3 Centene Corporation Directors on its Board, is run by the former NHS England Director of New Care Models, Samantha Jones (the 4th Director) and the Senior Clinical Advisor for the NHS England Accountable Care Systems’ Primary Care Development Programme, Nicholas Harding
The London takeover makes Operose Health Ltd one of the biggest companies providing NHS GP services in England, more than tripling its size to 69 GP Practices. Its patient list now approaches the size of that of the super partnership Modality – which was set up in 2009 by Nicholas Harding, now Operose Health Ltd’s Chief Medical Officer. Modality was one of the Vanguard schemes overseen by the Operose Health CEO, Samantha Jones, when she was NHS England’s Director of New Care Models.
AT Medics has 48 practices in 19 London Boroughs with 370,000 patients on its lists.
34 AT Medics Ltd practices are commissioned with Alternative Provider of Medical Services contracts. This type of contract, introduced in 2006, has opened up GP practices to commercial companies.
Unlike regular GP contracts which don’t allow sale of the ‘goodwill’ of the Practice if its partners retire or decide to wind it up, an Alternative Provider of Medical Services contract holder can ‘dispose of its rights and duties under the contract…’ – but first they have to get the Commissioners’ written authorisation. (54.1, APMS Contract)
So where is this prior written authorisation?
Only two records of Commissioners’ decisions to approve the transfer of control are readily accessible: North Central London Primary Care Commissioning Committee was presented with a Change of Control Request Report in December 2020. On 9 February, Central London Clinical Commissioning Group was presented with the same Change of Control Request for 1 APMS Practice. What about the other 11 Clinical Commissioning Groups? There seems to be no record of them authorising this change of control.
North Central London Clinical Commissioning Group Primary Care Commissioning Committee is meeting on 18th Feb and it needs to answer some questions about its hasty decision in December to approve the Change of Control Request.
Request for Change granted on grounds that AT Medics Ltd said there’d be no change to their Board of Directors – but all AT Medics Ltd Directors have been replaced by Operose Health Directors
Update 17.2.21 The Primary Care Commissioning Committee Minutes of the December meeting Primary Care Commissioning Committee record that AT Medics Ltd Change of Control request was authorised on the basis that,
“Legal advice had been sought as to whether the change of control would trigger a need for procurement because of the nature of the change of control. AT Medics indicated, as part of due diligence process, that the London contracts remained with AT Medics Limited with no change to the Board of Directors…”
The Minutes show that the Primary Care Committee was under the impression that,
“Under the change of control AT Medics Ltd would continue to run the primary care contracts, with AT Medics Limited Liability Partnership [the AT Medics holding company] transferring to Operose Health to strengthen work on population health management and digital as an enabler of this…”
The Committee therefore “APPROVED the recommendation subject to the requested due diligence of the Companies House Documentation.”
This referred to receiving a Certificate of Good Standing from Companies House, and on receipt the approval would be signed off on Chair’s action.
But as documents on the Companies House website show, what in fact happened was that:
- On 10th February 2021 all the AT Medics Ltd directors resigned as persons with significant control of AT Medics Holdings Limited Liability Partnership. They were replaced by Operose Health Ltd and another subsidiary of Centene Corporation, MH Services International (UK) Limited – where the Operose Health Ltd CEO, Samantha Jones, had been appointed a director on 14th January 2021.
- On 10th February 2021 all the AT Medics Ltd directors also resigned from their positions as Directors of AT Medics Ltd. Their replacements are the Operose Health CEO, Samantha Jones, and the Operose Health Chief Medical Officer and Chief Financial Officer.
Questions to North Central London Clinical Commissioning Group
- The Change of Control Request Report to the NCL PCCC in Dec 2020 doesn’t identify Operose Health as wholly owned by Centene Corporation in the USA. Instead it says “Operose Health Ltd is itself owned by MH Services (UK) Ltd. which is then owned by MH Holdings International (UK) inc.” Why?
2. In the due diligence work, solicitors
“carried out searches on financial stability and Good Standing to provide further assurance to commissioners in respect of OperoseHealth Ltd, Operose Health Group; MH Services International and MH Services International Holdings.”
Again no mention of the fact that Operose Health is a wholly owned subsidiary of Centene Corporation. Why?
Could it be because of Centene Corporation’s profiteering; inadequate provision of doctors, specialists, hospitals; healthcare fraud; failure to release accurate financial information related to the acquisition of a healthcare insurance provider; serious mismanagement and non-compliance with federal or state Medicaid contracts or rules; and so on? (Info sources follow):
- Profiteering and demanding taxpayer subsidies.
- Fines for not providing enough doctors, specialists and hospitals and other key services in its Obamacare insurance programmes,
- Committing healthcare fraud by selling health insurance plans without any participating doctors or hospitals and falsifying its lists of providers
- Having to pay $7.5 million to resolve a purported class-action lawsuit by investors that alleged the company failed to release accurate financial information related to its acquisition of Health Net.
- One of its subsidiaries being fined at least $23.6 million in penalties for serious mismanagement and non-compliance with federal or state Medicaid contracts or rules in more than a dozen states
- And so on – here is a list of Centene Corporation’s offences and violations in the USA going back to 2000.
3. How is it possible to reasonably claim that the proposed change in control did not constitute a change in contract holder, so there’s no need for a new contract, when all the AT Medics Ltd directors have been replaced by Operose Health Ltd directors? Despite what the Change of Control Request Report said about “assurances that the current directors of AT Medics Ltd would remain actively involved in the organisation.”
The Change of Control Request Report claims that,
“The proposed change in control did not constitute a change in contract holders and therefore was not a contract novation.A contract novation is whereby a contract holder who holds a GMS or PMS contract wishes to incorporate their contract to a company limited by shares, then request another company to hold the contract. The process of novation would be to terminate the incorporated GMS / PMS Company, then issue a new contract. The process of change control under an APMS would not trigger a contract novation, therefore for this reason the change was not likely to be subject to challenge under the Public Contract Regulations.”
This claim [that the proposed change in control did not constitute a change in contract holder, so there’s no need for a new contract], seems to hinge on AT Medics Ltd ‘assurances’ that despite the sale to Operose Health Ltd of the AT Medics Holdings Limited Liability Partnership (LLP) which wholly owns AT Medics Ltd, ‘the current directors of AT Medics Ltd would remain actively involved in the organisation.’
What are these assurances worth?
On 10th Feb all 6 AT Medics Ltd directors resigned from AT Medics Ltd – the same day that they all resigned as “persons with significant control” from AT Medics LLP, where they were replaced by Mh Services International (Uk) Limited and Operose Health Limited.
At AT Medics LLP, MH Services International (UK) Ltd and Operose Health Ltd now hold 75% or more of shares and voting rights in AT Medics Ltd and have the right to appoint or remove the AT Medics Ltd board of directors.
MH Services International (UK) Ltd and Operose Health Ltd apparently exercised that right the day they took control of AT Medics LLP.
Companies House shows the resignations from AT Medics Ltd of all the AT Medics Ltd directors who had also resigned as “persons with significant control” from AT Medics LLP.
They were replaced at AT Medics Ltd by the Operose Health Ltd CEO, its Chief Medical Officer and its Chief Financial Officer – a former Deloitte director in charge of the Healthcare Transaction and Restructuring team, dealing with healthcare systems’ and providers’ mergers and acquisitions.
Looks like a change in contract holders to me. What’s the basis for the claim that it isn’t?
4. When ownership of AT Medics LLP transferred from the then-directors to AT Medics Ltd to Operose Health Ltd, how much money did Operose Health Ltd pay for this?
5. Was that information included in the due diligence?
6. And what due diligence has been carried out into Operose Health Ltd’s finances? Their annual accounts are overdue, so there’s no way of checking on Companies House.
I look forward with interest to North Central London Clinical Commissioning Group’s answers to these questions.
Finally, the Change of Control Request Report talks about “the benefits of this collaboration” between AT Medics and Operose Health.
The new Integrated Care Systems Bill that was published last week keeps banging on about collaboration. So I guess this is an example of what the government and NHS England mean by “collaboration”? Stealth takeover by US-owned companies?
The Report also alleges that the
“benefits of this collaboration will include enhanced organisational resilience and accelerated technological capabilities” and “the new collaboration will bring together significant combined expertise in population health management.”
This looks like a nod to Operose Health’s place on the Health Systems Support Framework , which lists NHS England-approved companies that Clinical Commissioning Groups can contract to provide “support” to set up Integrated Care Systems – formerly known as Accountable Care Organisations. (Just to confuse things, Operose Health Ltd is listed as Centene UK in the Health Systems Support Framework.)
So it looks as if Operose Health is using the purchase of AT Medics GP practices as a way to embed its Health Systems Support Framework services in them. Based on the experiences of its parent company Centene Corporation, in Medicare/Medicaid Accountable Care Organisations. Rather than wanting to run the AT Medics GP practices, which it’s not going to do except indirectly by messing with their organisational processes, use of technology, risk stratification of patients, related new care models etc.
I have asked North Central London Clinical Commissioning Group if they have contracted with Operose Health for any services through the Health Systems Support Framework.
I have also asked AT Medics Ltd about claims made by its (then) Directors in an “Exciting new partnership” letter sent to “medical colleagues” on 10th February.
Just in case you’re wondering how all this corporate malarkey fits together, here’s what it looks like as far as we can tell from looking at the Companies House website.
Updated to correct the date of the termination of AT Medics Ltd Directors’ appointment and their replacement by Operose Health Ltd Directors. This took place on 10th Feb, not on 11th Feb, as was incorrectly stated.
Evasive answers from the North Central London Clinical Commissioning Group were received on 18.2.21. I am asking them for proper answers, as well as some follow up questions that have arisen from the 18th Feb meeting. You can download them here, in case of interest:
Updated 21.2.21 with the corporate structure charts.