Absolute Total Care, Centene Corporation's South Carolina subsidiary, has signed a definitive agreement to purchase Carolina Cresent Health Plan (CCHP), which is the state's largest nonprofit Medicaid managed care organization, from University Health Services, Inc., according to Centene.
With the purchase, Absolute will pick up CCHP's more than 40,000 Medicaid members in 46 South Carolina counties. In announcing the purchase, Centene said the company will cover about 13% of the state's eligible Medicaid population, which is in keeping with Centene's ultimate goal of covering between 10% and 15% (or about 90,000) of the eligible Medicaid population after the sale.
Absolute said the move will "enable the company to leverage its care management capabilities across nearly twice as many members, with the potential to significantly improve health outcomes and reduce costs for the state's Medicaid members."
"The expansion of our South Carolina operations is consistent with our strategy to effectively and prudently deploy capital to grow our business," said Centene Chairman and Chief Executive Officer Michael F. Neidorff. "Like all accretive acquisitions, this transaction will allow us to leverage our business platform and systems across a broader member base, enabling us to provide better service at lower cost to our customers."
Centene, which didn't announce financial terms of the deal, expects the purchase will add revenues of between $55 billion and $65 billion this year and $115 million to $130 million on an annual bases.