UnitedHealth Group buys Medicare insurer in Texas

UnitedHealth Group says it has acquired a Medicare health insurer in Texas that's connected to a large medical group in Houston.

In a regulatory filing Friday, a subsidiary of Minnetonka-based UnitedHealth disclosed the acquisition of KS Plan Administrators, the Houston-based insurance company. Financial terms were not disclosed.

During the first quarter, KS Plan Administrators covered about 41,000 Medicare beneficiaries and generated about $147 million in premium revenue in Texas, according to a filing.

KS Plan Administrators is affiliated with Kelsey-Seybold, a large medical group that a stock analyst in July said had been acquired by UnitedHealth Group for about $2 billion.

UnitedHealth Group has not provided detailed comments on the financial terms or ownership structure of the Kelsey-Seybold transaction, saying only that its Optum business for health care services is now "aligned" with the physician group.

"We look forward to working together to advance Kelsey-Seybold's compassionate, coordinated care model to more patients and communities in the Greater Houston area," UnitedHealth Group said in a July statement. The company had no further comment this week.

Last fall, the Medicare Advantage health plan at Kelsey-Seybold was awarded a five-star rating by the federal government for a sixth consecutive year. UnitedHealthcare is the nation's largest operator of Medicare Advantage plans, where seniors elect to receive their Medicare benefits through private managed care insurers.

Founded in 1949, Kelsey-Seybold Clinic is a large multispecialty group practice with more than 600 physicians and allied health professionals working at 31 locations in and around Houston. The group includes a large surgery center, a cancer center, 20 pharmacies and one specialty pharmacy.

During the past decade, UnitedHealth Group has steadily grown its Optum division for direct patient care to include more than 320 surgery centers as well as large group practices in 16 states. Before the Kelsey-Seybold transaction, the business already ran two large medical groups in Texas.

The company's Optum Rx division for pharmaceutical benefits management includes mail-order pharmacies as well as more than 650 pharmacies located within mental health and other clinics.