CVS Health Corp.'s new agreement to buy Centene Corp.'s Illinois
health plan doesn't fall under the "megadeal" category. But industry
experts see broader implications as health care players large and small
continue to jockey for position and focus on strengthening their footholds in
Medicaid managed care and, especially, the lucrative Medicare Advantage (MA)
program.
On Dec. 2, Centene said it has entered into a definitive
agreement with CVS Health that is related to Centene's previously announced
merger agreement with WellCare Health Plans, Inc. Once state and federal
regulatory hurdles are cleared, CVS Health is to acquire Centene's Illinois
health plan subsidiary, IlliniCare Health Plan, Inc., in a deal involving the
sale of Centene's Medicaid and MA lines of business in Illinois.
Just as PBMs were seen previously as "great acquisitive
opportunities, now we think the next round of opportunity is grabbing as many
MA plans as possible," and being "opportunistic" when required
divestitures in a given state come along, as in this case, Ashraf Shehata,
KPMG's national sector leader for health care and life sciences, tells AIS
Health.
"If I were picking states to make a Medicare Advantage
impact, it would be major metro areas…in the Northeast, Midwest and South,"
Shehata says. "It could be a great proving ground for the retail
model," he says.
Shehata views Illinois as a potential "building block"
for CVS Health, with MA and Medicaid, "a strong commercial
population" and potential Affordable Care Act exchange business on top of
that — which "makes it successful and scalable for a large plan."
Yet he says while Illinois offers opportunities for market
growth, the state has a complicated insurance market built for those "very
large players" able to cover wide rural areas as well as Chicago. The
difficulty in Illinois is provider contracting: "As soon as you step out
of the Blues network, it is more favorable on the provider, not the payer
side," in terms of negotiations, he says.
No comments:
Post a Comment