Amerigroup Corp., Virginia Beach, Va., has retracted its offer to acquire 103,000-member Wellness Plan, Michigan's largest Medicaid HMO. Amerigroup had agreed in April to pay $38 million to purchase the Detroit-based plan, which has been under state control since entering court-ordered rehabilitation in July 2003. According to Amerigroup's quarterly financial statement, the transaction was stymied by "certain factors including negotiation of acceptable new premium rates, a successful rebid for existing contracts and approval by our board of directors." Michigan has reopened bidding for Wellness Plan. Amerigroup covers about 857,000 Medicaid beneficiaries in six states. -- by Laura B. Benko
Amerigroup backs off purchase of Medicaid HMO
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