Virginia Beach-based Amerigroup Corp. plans to buy Health Plus, one of the largest Medicaid managed-care companies in New York, for $85 million.
Health Plus, begun in 1984 by Lutheran Medical Center, serves about 320,000 members in New York State’s Medicaid, Family Health Plus and Child Health Plus programs, as well as the federal Medicare program. The company is expected to generate revenue of about $1 billion this year.
New York has the second largest number of Medicaid enrollees in the nation, around 5 million.
Amerigroup, a Fortune 500 Company, currently manages services for about 2 million members in publicly funded health-care programs in 11 states.
This acquisition will provide greater access to quality care for Amerigroup and Health Plus members, cost savings for the state and New York City, as well as provide a renewed investment in the local community,“ James G. Carlson, chairman and chief executive officer for Amerigroup, said in a statement. “Our national expertise in coordinating care for low-income populations and people with disabilities, coupled with the excellence of Health Plus, will allow us to better serve current and new members, collaborate with providers and expand our patient-centered medical home model.“
The purchase will be funded through available cash. The deal, which is subject to regulatory approval, is expected to close in the first six months of next year.
The acquisition is expected to be slightly dilutive to Amerigroup’s earnings per share in 2012 due to integration and one-time transaction-related costs, but accretive to earnings beginning in 2013.
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