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Centene and WellCare Merger: What do we know?

Centene and WellCare Merger

In March of 2019 Centene announced they were going forward to purchase WellCare in a $17.3 billion-dollar transaction. Since the announcement there’s been some anxiety in provider circles about what this merger could mean for providers everywhere. Centene and WellCare are two of the largest health insurers in the United States and—not surprisingly—their merger creates some uneasiness about provider bargaining power and patient choice.

The Centene/WellCare merger is not complete but is on track to finalize at the beginning of 2020. Shareholders of each company voted to approve the deal overwhelmingly, but the two companies still have a long road ahead. Ultimately the purchase must be approved by insurance regulators in 26 states. So far, it’s been announced that the companies have conditional approves in Alabama, Arkansas, Kentucky and Missouri. It has not yet been announced whether other states have approved the transaction, but Centene indicated they would not be providing updates on all steps along the way – so it’s not surprising.

Ultimately the companies will also need approval from the Department of Justice to ensure that the acquisition doesn’t violate any antitrust laws. All we know thus far is that the DOJ requested additional information about the merger which is not uncommon in large transactions like these. Lobbying groups and large organizations are speaking up to the DOJ about the merger. The American Hospital Association indicated to the DOJ that the merger “threatens to reduce competition in delivery of Medicaid managed care and Medicare Advantage services to tens of millions of consumers across broad swaths of the country.”

In Florida specifically the two companies have such a large market share that it may be difficult for them to get approval without some divestitures and that has already been acknowledged by Centene themselves. It remains to be said what concerns or comments Florida’s insurance regulators have to say about the deal. Currently there have been no public statements.

It’s unclear what this merger could mean for the actual processes and contracts that providers have with these insurers. It has not been announced whether Centene’s processes and contracts would completely replace WellCare’s. For therapy providers in Florida it’s a particularly important question. In Florida Sunshine pays therapy through a capitated model (via American Therapy Administrators) while WellCare pays fee-for-service. If Centene’s process takes over it could mean a large portion of Medicaid enrollees’ therapy will now be handled by ATA through a capitated model which has larger repercussions for provider network adequacy and patient care.

Providers may want to write the Florida Insurance commissioner about their individual concerns with this merger. Also consider joining discipline specific lobbyist groups that will help you raise your individual concerns. As it stands until more is announced about the transition and regulatory approvals are finalized it remains to be seen what repercussions this merger may have.




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