Magellan Health Services To Acquire 65% Stake In AlphaCare Of New York
Open Minds August 25, 2013
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On August 14, 2013, Magellan Health Services Inc. reported the launch of a definitive agreement for Magellan Complete Care to acquire 65% of AlphaCare of New York, a newly licensed Medicaid Managed Long Term Care health maintenance organization (HMO) and Medicare Plan. Magellan’s investment, valued at $25.5 million, includes Magellan’s current seven percent interest in AlphaCare through a previous investment of $2 million in AlphaCare Holdings, LLC. and a loan of $6 million to AlphaCare Holdings. After the agreement closes, AlphaCare’s current leadership will remain with the company and continue in their current positions. Magellan representatives will join AlphaCare’s board of directors. Beginning January 1, 2017, Magellan will be able to purchase the remaining portion of AlphaCare stock.
AlphaCare has a managed long-term care contract with the state to operate in Bronx, Kings, New York, Queens and Westchester Counties and Medicare Plans in Bronx, Kings, New York, and Queens counties. Enrollment started in August 2013. AlfaCare has also been selected to participate in the state’s integrated care demonstration program for people eligible for both Medicare and Medicaid; AlfaCare’s duals programs will operate in Bronx, Kings, New York, and Queens counties. The duals demonstration is slated to start in April 2014 and run through December 2017. Participation is subject to completion of a readiness review, the receipt of adequate rates and entry into a contract for the duals program.
Magellan Complete Care provides integrated medical and behavioral health care services. In June 2013, Magellan Complete Care launched in Florida, as a new Medicaid health maintenance organization initially serving Broward County as a health plan for individuals with serious mental illness.
Magellan Health Services Inc. is a specialty health care management organization with expertise in managing behavioral health, radiology, and pharmacy benefits programs, as well as integrated health care programs for special populations. As of June 30, 2013, Magellan's customers include health plans, employers, and government agencies, serving approximately 34.0 million members in its behavioral health business, 17.4 million members in its radiology benefits management segment, and approximately 9 million members in its medical pharmacy management product. In addition, the pharmacy solutions segment served 40 health plans and employers, 25 states and the District of Columbia, and several pharmaceutical manufacturers.