WASHINGTON - The Department of Justice announced today that
Amerigroup Corp.'s sale of its subsidiary, Amerigroup Virginia
Inc., addresses the department's concerns with WellPoint Inc.'s
proposed acquisition of Amerigroup. The department said 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.
Amerigroup has agreed to sell Amerigroup Virginia to the Inova
Health System Foundation. Today, the department closed its
investigation of the sale of Amerigroup Virginia to the Inova
Health System Foundation, allowing the parties to proceed to
consummate their transaction. The department worked closely with
the Virginia Attorney General's office in reviewing that
transaction.
"The divestiture of Amerigroup Virginia will ensure continued
competition in the markets for Medicaid managed care plans in
Northern Virginia," said Acting Assistant Attorney General Renata
B. Hesse in charge of the Department of Justice's Antitrust
Division. "Preserving competition in health care markets is vital
to ensuring that consumers receive better and more innovative
health care services."
Without the divestiture, 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
divestiture ensures that Medicaid beneficiaries in Northern
Virginia will continue to have a choice of at least two Medicaid
managed care entities.
The Virginia Medicaid managed care program provides enrollees
with access to preventive and coordinated care through managed care
organizations, including WellPoint and Amerigroup.
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. 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 is headquartered in Indianapolis, and is a licensee of
the Blue Cross and Blue Shield Association. WellPoint and its
subsidiaries serve more than 65 million members and had 2011
revenues of $60.7 billion.
Amerigroup Corporation is headquartered in Virginia Beach, Va.,
and coordinates services for individuals in publicly funded
healthcare programs. Amerigroup serves more than 2 million members
and had 2011 revenue of more than $6 billion.
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