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August 28, 2012 01:00 AM

Feds extend review of Amerigroup, WellPoint deal

Joe Carlson
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    Amerigroup Corp., a Virginia Beach, Va.-based managed-care provider for Medicare and Medicaid recipients, announced that it has received a second request for information from federal antitrust officials investigating the potential $4.9 billion acquisition of the company by WellPoint.

    In a filing with the Securities and Exchange Commission, Amerigroup disclosed that the Justice Department has requested additional information on its operations in Virginia. “Both the company and WellPoint are working cooperatively with the DOJ staff and representatives of the commonwealth of Virginia to resolve any potential concerns expeditiously,” according to the Amerigroup filing.

    About 48,000 of Amerigroup's 2.6 million health plan members live in Virginia, according to statistics disclosed on the company website (PDF). WellPoint is one of the nation's largest insurers, with 34 million members in its branded health plans and 65 million more in subsidiary health plans such as Anthem Blue Cross and Blue Shield, which operates in Virginia and 10 other states.

    According to the SEC filing, the companies expect to close the transaction by the end of 2012, following approval from federal antitrust authorities in the ongoing Hart-Scott-Rodino approval process. The request for additional information extended the initial Aug. 22 deadline by 30 days.

    The combined company would have membership of about 4.5 million Medicaid beneficiaries in 19 states. WellPoint announced the proposed acquisition of Amerigroup less than two weeks after the Supreme Court upheld the Patient Protection and Affordable Care Act, a ruling that WellPoint executives estimated would increase Medicaid spending in managed-care plans by nearly $100 billion by the end of 2014.

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