- The American Hospital Association is asking the Department of Justice to probe Centene's proposed $17 billion acquisition of WellCare arguing it "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 a letter dated Tuesday, the hospital group referenced earlier payer deals DOJ blocked, including Aetna's 2016 proposal to acquire Humana.
- Since proposing the deal in late March, Centene has pushed back on antitrust concerns. CEO Michael Neidorff told investors that "while there is some overlap in some of the states, we believe it's all very manageable."
While Centene maintains the deal can be completed without oversaturating markets, legal analysts say fewer plans bidding in a state could lead to less desirable bids. The combined company would have a presence in all 50 states, covering 22 million lives and generating $97 billion in revenue.
Both payers serve Medicaid beneficiaries in nine states, with particular overlap in Missouri, Nebraska and Georgia. Centene's planned acquisition would also significantly boost the company's MA footprint, another main area of antitrust concern AHA noted.
While Neidorff has downplayed antitrust concerns over the deal, he acknowledged to investors last week that divestitures are likely, specifically in Nebraska and Missouri. He said the company is in talks with DOJ concerning the acquisition plan and has submitted formal filings for approval in five states.
Centene reported first quarter earnings that included revenue and membership growth beating Wall Street expectations. Those numbers were fueled by another acquisition, of New York managed care insurer Fidelis Care, in July.
Centene isn't alone is facing opposition to mergers within the industry. While CVS has said its acquisition of Aetna is complete, a federal judge has stalled approving the merger agreement settlement with DOJ, adding uncertainty to specifics of the deal completion. The American Medical Association is among the groups opposing that deal, and will testify against the settlement later this month.