- Medicaid managed care provider Molina entered into a definitive agreement to buy NextLevel Health Partners for $50 million in cash, the company said Monday.
- NextLevel serves 50,000 Medicaid and long-term services and supports members in Illinois' Cook County, home to the city of Chicago.
- The deal, if approved, would give Molina access to Cook County and 50,000 new members. The insurer currently serves about 215,200 Medicaid members throughout the state of Illinois including Cook County, according to the state's enrollment figures.
Illinois' Medicaid managed care market is poised to experience a shakeup after a number of acquisitions in recent years.
There are six Medicaid managed care organizations in Illinois, two of which only cater to members in Cook County. After recent mergers shake out, the state will be down to five, which is of concern to the provider community.
"We are concerned about the continuing consolidation that we are seeing in the managed care market in Illinois and the still unacceptably high rates of claims denials and underpayments by the MCOs," Danny Chun, spokesman for the Illinois Hospital Association, told Healthcare Dive.
Soon, one of those six plans, IlliniCare (owned by Centene) will be sold to CVS Health in order for Centene to clear regulatory hurdles to acquire WellCare, which operates its own Illinois Medicaid plan, called Meridian Health Plan.
Molina expects the NextLevel deal to close early this year, pending regulatory approval. NextLevel is estimated to generate premium revenue of $270 million for the full year of 2019. After the combination, Molina will still trail the other large insurers in terms of enrollment. Illinois expanded its Medicaid managed care model just two years ago in 2018 to cover all counties in the state.
"Acquiring NextLevel Health increases our footprint in the state of Illinois, enables us to scale our existing business platform, and provides additional operating cost leverage," Pam Sanborn, president of Molina Healthcare of Illinois, said in a statement.
Molina hinted that the newly acquired assets may allow the company to expand its ACA marketplace presence.
"The existing base of acquired assets also provides Molina with expansion opportunities for our Medicare-Medicaid Plan (MMP) and Marketplace offerings," the payer said.