Sector: Managed Care
Centene Corp will acquire Fidelis Care (Rego Park, NY), a nonprofit managed Medicaid and Medicare plan, for $3.75 billion. Rev. Patrick Frawley will maintain Fidelis’ CEO role following the transaction’s closing, and the company will keep its headquarters. In addition, Centene plans to take on Fidelis’ roughly 4,000 employees. The transaction is slated to close in Q1 2018. Upon closing, Centene will solidify its stance as the country’s largest Medicaid managed care organization.
Under the deal, Fidelis, which sells health insurance plans to New York state residents and has 1.6 million members, will become Centene’s health plan in the state. The acquisition allows Centene, based in St. Louis, to have a sizable presence in the country’s four largest states in health insurance membership â€“ California, Florida, New York and Texas.
Centene specializes in Medicaid managed care plans, which are the private-market option for Medicaid recipients. Medicaid, funded by the federal and state governments, is a government health program for low-income Americans and also runs its own public option. Founded in 1993 as the Catholic Health Services Plan of Brooklyn and Queens, Fidelis Care, which is a not-for-profit corporation, has insurance plans accepted by 70,000 health care providers in New York.
Fidelis offers state plans in Medicaid, Qualified Health Plans, Child Health Plus and Essential Plan,Â as well as the national programs in Medicare Advantage, Dual Advantage and Managed Long Term Care. It had revenue ofÂ $4.8 billion in the first six months of the year. “Centene’s and Fidelis Care’s missions are fully aligned,” Centene CEO Michael Neidorff said in a statement.
With the acquisition, Centene expects to generate 2018 revenue of more than $60 billion and generate savings of about $100 million by the second year. The combined company would have about 13.8 million members.