Molina Healthcare, Inc.’s MOH wholly owned subsidiary Molina Healthcare of Illinois, Inc. recently entered into an agreement with Better Health Network, LLC to acquire some of the latter's assets. These assets pertain to the Medicaid business of Better Health in the State of Illinois.
Pursuant to the agreement, Better Health’s 40,000 Medicaid members in Cook County will be shifted to Molina Healthcare of Illinois. The acquisition will be funded with the available cash in hand. The deal is pending regulatory approvals and is expected to culminate in the second quarter of 2016.
This acquisition is expected to boost the quality of care delivered by Molina Healthcare to the state’s vulnerable citizens. This transaction marks the third acquisition by the company in Chicago in 2015 and reflects Molina Healthcare’s commitment to the Illinois Medicaid program and individuals receiving government-sponsored health care.
Molina Healthcare’s expertise in community programs as well as emphasis on superior quality and cost-effective care, when combined with Better Health’s Accountable Care knowledge, is expected to generate long-term benefits for members. This should also attract potential members and boost revenues.
Molina Healthcare has been growing inorganically via acquisitions. The acquisition agreement with HealthPlus of Michigan in May 2015 will further allow Molina Healthcare to acquire the Medicaid and MiChild businesses of the latter, once approved. This should boost Molina Healthcare's business in Michigan.
Also, the pending buyout of Medicaid assets from Preferred Medical Plan, Inc., MyCare Chicago, Loyola Physician Partners and Columbia United Providers should strengthen the company's presence in Florida, Chicago and Washington, in the Medicaid space.
Moreover, the decision to purchase the two wholly owned subsidiaries of The Providence Service Corporation – PHS and PCS – reflects the company's focus on arranging health care services for patients with complex requirements. This should make way for more revenue generation.
Molina Healthcare currently carries a Zacks Rank #2 (Buy). Other stocks in the healthcare space that warrant a look include Adeptus Health Inc. ADPT, MEDNAX, Inc. MD and Acadia Healthcare Company, Inc. ACHC. While Adeptus Health and MEDNAX sport a Zacks Rank #1 (Strong Buy), Acadia Healthcare holds the same Zacks Rank as Molina Healthcare.
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