Fidelis-Centene Deal Gets Crucial Regulatory Approval from New York State
The $3.75 billion deal received approval from the Health and Financial Services departments. It now awaits for word from the attorney general.
The green light from the two state agencies clears a significant regulatory hurdle for the deal, which still requires approval from Attorney General Eric Schneiderman, closing conditions, and aspects of the asset purchase agreement.
"We are pleased to have crossed these milestones and look forward to working with the regulatory authorities and Attorney General through the completion of the process," Michael F. Neidorff, CEO of Centene, said in a statement.
Centene entered into an asset purchase agreement last September to acquire most of the assets overseen by Fidelis, a nonprofit health plan owned by the state's Roman Catholic bishops.
The deal gained attention earlier this year when Gov. Andrew Cuomo's executive budget proposal included a provision to create a "healthcare shortfall fund," which would ensure funding for New Yorkers in the absence of continued federal funding.
The statute would collect an estimated $750 million annually over the next four years by taxing proceeds from the sale of nonprofit health companies to for-profit health companies. Some healthcare experts, including Bill Hammond of the Empire Center for Public Policy, viewed the policy as a way to capitalize on the Fidelis-Centene deal.
Cardinal Timothy Dolan, who serves as the Archbishop of New York, said the Catholic Church intends to use the proceeds from the deal to create a charitable foundation that provides health services to the needy in New York.