Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Justice Department Closes Investigation Into Medicaid Managed Care Plan Providers’ Merger, (Nov 29, 2012)

By E. Darius Sturmer, J.D.

The Department of Justice Antitrust Division announced on November 28 that it has closed its investigation into WellPoint Inc.’s proposed acquisition of Amerigroup Corp., after Amerigroup’s plan to sell its subsidiary, Amerigroup Virginia Inc., alleviated the government’s concerns that the merger, as originally proposed, would have substantially lessened competition in the provision of Medicaid managed care plans in Northern Virginia. WellPoint and Amerigroup are the only two providers of Medicaid managed care plans in Northern Virginia.

The Virginia Medicaid managed care program provides enrollees with access to preventive and coordinated care through managed care organizations, including WellPoint and Amerigroup.

Without the divestiture, the Antitrust Division said, WellPoint’s proposed acquisition of Amerigroup would result in a merger to monopoly in Medicaid managed care in Arlington, Culpeper, Fairfax, Fauquier, Frederick, Loudon, Prince William, Rappahannock and Warren counties, plus the cities of Alexandria, Falls Church, Fairfax and Manassas Park. No new Medicaid managed care plan has entered these areas since 2005, the government noted.

The divestiture ensures that Medicaid beneficiaries in Northern Virginia will continue to have a choice of at least two Medicaid managed care entities. Congress has recognized the importance of choice to Medicaid beneficiaries by generally requiring that states give beneficiaries a choice of at least two Medicaid managed care entities if the state requires beneficiaries to enroll in managed care plans.

WellPoint and Amerigroup compete in Northern Virginia on the breadth and quality of their provider networks of physicians, hospitals and pharmacies; plan design; service; care management; and programs and services to improve the health status of Medicaid enrollees, such as immunization incentives, disease prevention and health education.

Amerigroup has agreed to sell Amerigroup Virginia to the Inova Health System Foundation.

News: Antitrust AntitrustDivisionNews