Centene’s Proposed WellCare Acquisition May See DOJ Scrutiny

An April 30 article in Managed Care, “Centene, big in Medicaid managed care, wants to get even bigger,” discussed the business plans of Centene, the largest Medicaid managed care insurer in the U.S.  Rivkin Radler’s Christopher J. Kutner was quoted in the article.

Centene is hoping that its proposed acquisition of WellCare Health Plans will pass muster with federal antitrust regulators. The acquisition would help bolster Centene’s lead in the Medicaid managed care market and shore up its position in the Medicare Advantage sector. If the merger is approved, Centene will be taking on more members, which will generate more premium dollars and spread the company’s risk, Chris observed. Centene has acquired a number of companies in recent years, and with each acquisition they “acquire more data so they are better able to manage wellness and head off the high cost of medical care,” Chris said.

U.S. Department of Justice (DOJ) approval of the acquisition does not appear to be a foregone conclusion.  In an April 30 letter to the DOJ’s Antitrust Division, the American Hospital Association (AHA) expressed concern that the proposed deal “threatens to reduce competition in delivery of Medicaid Managed Care and Medicare Advantage services to tens of millions of consumers.” The AHA’s letter urged the DOJ to “vigorously review” the potential effects of the acquisition and “take all appropriate measures to protect U.S. consumers.”