Buyout of Troubled Universal Falls Through
MBF Healthcare Partners, an investment group chaired by Miami multimillionaire Miguel "Mike" Fernandez, will not be buying Universal Health Care, after all.
MBF's public relations agent released a terse statement to that effect Wednesday afternoon, a few hours after Health News Florida asked for confirmation that the talks had been called off. The statement said the two companies "mutually agreed not to proceed."
Six days ago, MBF announced it planned to acquire most of the assets of Universal, a multistate Medicare plan based in St. Petersburg. MBF said at the time it anticipated a quick close in the first quarter.
That appeared to signal a reprieve for Universal, which has already been laying off workers and been ordered by Georgia and Ohio to stop sales because of its shaky finances.
Now that the deal has fallen through, Universal will have to find another suitor or some other way to shore up finances to avoid trouble with Florida's Office of Insurance Regulation. Dr. Akshay Desai, Universal's founder, chairman and CEO, did not respond to a request for information.
Both Desai and Fernandez are fund-raising titans of Florida's Republican Party, and are said to be good friends.
Before the recent financial troubles, Universal had expanded its Medicare plans to 20 states with more than 191,000 members. It lost members during Medicare open-enrollment season in the fall after federal officials sent letters to Universal members saying the plan had below-average ratings on quality measures and customer satisfaction. The letter suggested that members consider switching plans; many did.
Around the same time, in mid-November, Georgia's Insurance Department halted sales of Universal's Medicare plans in that state because of its shaky finances, as Georgia Health News reported. Ohio insurance officials took similar action.
Florida's insurance department tried to place the company under state receivership in early 2007, saying its financial reserves were inadequate to meet state requirements. But a cash infusion freed Universal from state supervision.
This afternoon, Health News Florida asked OIR what will happen next. Spokeswoman Amy Bogner sent an e-mail, quoting state law, that said the agency is not permitted to confirm whether an investigation is under way.