Vertava Health has announced another rebrand.
This time, however, the move ends the company’s chapter as a residential treatment center provider and begins a new one as an intermediate mental health care provider.
On Wednesday, Vertava Health announced it had completed multiple acquisitions and divestitures and changed its name to Blended Health. The company currently has 18 locations in Texas and Tennessee with more than 400 employees.
The company now offers partial hospitalization programs (PHP) and intensive outpatient programs for adults and children with acute mental health issues and co-occurring substance use disorders (SUD). Its care focuses on group therapy.
“We are committed to connecting people with important issues in mental health by delivering PHP and IOP services to adolescents and adults in unique and profound ways,” Blended Health CEO Matt Morgan said in a statement Connect.”
Blended Health is the merger of Vertava Health, Dallas-based Connections Wellness Group and Memphis, Tenn.-based Integrated Addiction Care Associates.
Vertava Health was originally founded as Addiction Campuses in 2014 by Nashville, Tenn., executive Brent Clements.The company has built a destination residential treatment center business model with centers across the United States
Over the next few years, the model fell out of favor with investors as payers began to reduce the reimbursement rates they offered providers who used it. Typically, addiction treatment providers in this area operate outside of a health plan’s network and target prices that are higher than in-network prices.
Bluff Group’s M&A advisory data points to a shift in what investors are willing to buy, away from premium and/or destination treatment and toward business models that are more locally focused, more affordable, and operate within a network.
Many addiction treatment providers are unable to make this transition. The bankruptcy saga of Delphi Behavioral Health Group illustrates this era, roughly from 2016 to 2022.
Addiction campuses are not left out of these market changing trends that require companies to transform.
Boston-based private equity firm Summit Partners acquired Addiction Campuses in 2018. Clements left the company in 2019 and Morgan was named CEO. It changed its name to Vertava Health in 2020.
Morgan told Behavioral Health Business in 2021 that the company would tilt toward outpatient care and would “aggressively move into acquisitions.” Vertava Health announced its acquisition of Connections Wellness Group in February 2021, followed by its acquisition of Integrated Addiction Care Associates three months later.
At the time, the company also planned to add 15 to 20 new outpatient mental health centers in addition to its acquisition activity. However, by the end of 2021, the company sold several newly opened facilities to Mindpath Health. That same year, Summit and Morgan began a push to exit the SUD residential treatment center space.
The Connections Wellness Group website states that after the acquisition, Connections Wellness Group founder and current CEO Awstin Gregg helped the company grow and has now opened 12 stores in Texas, with more in the pipeline. 5 stores. He resigned as CEO in October 2023 to serve as a consultant to the company. The company said in a statement that no advisory firms were involved in either transaction.
The exit from residential treatment occurred almost at once, with the sale of three of the four centers to Regard Recovery in Fort Lauderdale, Florida, in a deal that closed in late 2022. Morgan told BHB in early 2023 that the company would maintain the addiction treatment business line and that the remaining facility in South Mountain, Mississippi, would be the starting point. Vertava Health will sell the facility to Bradford Health Services in late 2023.
Since the sale, Morgan has rebuilt the executive team and organized the company as Hybrid Health. The company’s patient-facing entities will be renamed or retain the Connections Wellness Group brand. Bradford Health will continue to use the Vertava brand at facilities in Mississippi, according to a statement from a Blended Health representative.
“Our vision is to create a healthy society through positive mental health,” Morgan said in a statement. “The impact we make on their lives today will shape the health of our communities tomorrow.”