Dive Brief:
- Molina terminated its agreement to acquire Illinois-based NextLevel Health Partners for $50 million in cash, according to an SEC filing submitted Tuesday.
- Molina pointed the finger at NextLevel and said the deal fell through due to the seller's "unwillingness to close pursuant to the terms of the acquisition agreement."
- The two had previously entered into a definitive agreement in January. Neither responded to Healthcare Dive's requests for comment.
Dive Insight:
The unwinding deal comes amid a tumultuous time for the U.S. economy and healthcare sector as the coronavirus pandemic continues to infect and kill Americans while straining healthcare resources.
It's unclear whether the coronavirus played a role in the deal falling through.
The acquisition was expected to close early this year and would have added about 50,000 lives to Molina's Medicaid business in the state of Illinois.
Of the six Medicaid managed care plans in Illinois, Molina and NextLevel covered the fewest lives compared to their competitors. Together the two would have covered about 280,000.
According to figures from March, Meridian Health (WellCare) had the largest enrollment with about 725,000 members followed by Blue Cross Blue Shield of Illinois with about 462,000 members, and IlliniCare (Centene) with about 356,000 Medicaid members in Illinois.
Providers had expressed concern about the NextLevel deal as it would lead to more consolidation in the state's managed care market.
Long Beach, California-based Molina ended 2019 with 3.3 million members, less than the 3.8 million members it had at the end of 2018. The company's premium revenue fell to $16.2 billion for the year and declined to $4.1 billion for the quarter. The drops in both periods are due to Medicaid membership losses in New Mexico and Florida.