Centene Finalizes Acquisition of Behavioral Healthcare Platform

Centene has completed its acquisition of the behavioral healthcare platform Magellan Health, which will allow the payer to provide members with low-cost integrated healthcare services.

“Magellan will expand Centene’s reach to provide increased access to behavioral healthcare for our members at a time when so many Americans are struggling with mental or behavioral health issues,” Michael Neidorff, chairman and chief executive officer of Centene, said in the press release.

“This transaction establishes a strong foundation from which we will innovate and reimagine behavioral and specialty health to provide comprehensive and integrated healthcare to our members, while generating value for our state partners and shareholders.”

The payer first announced plans to acquire Magellan Health in January 2021, with a proposed transaction of $2.2 billion.

The acquisition aims to help Centene offer integrated behavioral and physical healthcare services to its members across the country.

Centene currently offers health plan benefits to Medicaid and Medicare members, individuals and families on the health insurance marketplace, TRICARE members, and individuals in correctional facilities.

Now that Centene has acquired Magellan Health, the behavioral healthcare platform will be available to 41 million members. The payer will also gain an additional 5.5 million Medicaid and Medicare members and 18 million third-party customers from Magellan Health.

The acquisition was projected to reduce healthcare spending for Centene members, as Magellan Health offers solutions for complex, high-cost population health management, according to the initial announcement.

Additionally, the payer expected to see reductions in administrative and operational spending, predicting $50 million in operational cost savings by the second full year following the acquisition.

The companies had anticipated that the transaction would be complete in the second half of 2021.

In December 2021, Centene and Magellan Health announced that they had obtained all of the regulatory approvals that they needed to finalize the acquisition.

Magellan Health will operate under Centene’s Health Care Enterprises group and will continue under the leadership of Ken Fasola, chief executive officer of Magellan Health, and other current team members, the press release stated.

Centene has worked to expand mental and behavioral healthcare services to members in the past.

For example, in November 2021, the payer added serious mental healthcare services to its Medicaid contract for members in Arizona. The contract, set to last three years starting in October 2022, allows Arizona Complete Health-Complete Care Plan and Care1st Health Plan Arizona to offer physical and behavioral healthcare services to Medicaid members with mental health conditions.

Additionally, the payer shared in a recent report how health plans can successfully address and improve mental healthcare for children. Payers can partner with schools to ensure children receive proper education and resources about mental health, Centene said.

Payers can also leverage screening materials to assess teenagers who may be at risk for suicide. In the past, Centene used predictive analytics to identify suicide risk among children in foster homes. The payer also offered resources to help primary care providers and mental healthcare providers coordinate patient care.

Additionally, Centene noted the importance of decreasing the stigma around receiving support for mental health.

According to the report, Centene Advanced Behavioral Health distributes resources to parents and caregivers that encourage them to be mindful of their children’s and their own mental health. The resources also aim to help adults be aware of the warning signs of mental or behavioral healthcare conditions in children.