Molina to acquire Passport Health's Medicaid, dual needs business for $20M after Kentucky contract win

Managed care company Molina Healthcare announced it will purchase the Medicaid and dual special need plan business of Evolent Health’s subsidiary Passport Health, a major Medicaid managed care insurer in Kentucky.

The deal announced Friday comes after Molina was named one of five insurers to win a contract from Kentucky to offer Medicaid managed care plans in the state through 2024. Passport Health has been a major provider of managed care in the state.

“The acquisition of Passport allows Molina to enhance operational readiness and promote continuity of care for members in advance of Molina’s new contract award in the Kentucky Medicaid market,” Molina said in a statement Friday.

The contract begins on Jan. 1, 2021.

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As part of the deal, Moilna will also acquire the Passport name and keep on the insurer’s staff.

“The anticipated reduction in health plan startup costs and the positive margin impact from incremental revenue will allow Molina to recover the purchase price from positive cash flow within the first year following the acquisition,” the insurer said.

While the deal is expected to close by the end of the year it is still subject to regulatory approval.

Molina is one of five insurers that got Kentucky’s managed care business alongside Aetna, Humana, UnitedHealthcare and WellCare.

Passport Health had been serving the state for more than 20 years and announced back in June it had planned to appeal the state’s decision to snub it.

Kentucky also decided to snub Anthem, who had applied for the managed care contract as well.