The sale gives Centene a foothold in the Empire State, a prize in the managed care market, and allows the Archdiocese to establish a multi-billion dollar health foundation.
The sale of the nonprofit health plan came after months of review from state regulators and final approval from interim Attorney General Barbara Underwood.
"We are pleased to have completed our transaction with Fidelis Care on schedule and to enter the New York market by joining with a company with which we are closely aligned on many levels," Michael F. Neidorff, CEO of Centene, said in a statement.
Centene laid out additional details about its entrance into the New York market:
Rev. Patrick J. Frawley will continue to serve as CEO of Fidelis, which will remain in headquartered in Queens.
"The integration planning process reaffirmed the alignment between our two companies, and I look forward to what we will be able to accomplish as part of Centene, including through their comprehensive, state of the art technology and medical management, wellness and care management systems," Frawley said.
The health plan will also continue its operations in Albany, Buffalo, Rochester, and Syracuse.
Centene expects to add nearly 4,000 members to its network through the purchase.
Centene will now have plans available in the four largest managed care states: New York, California, Florida, and Texas.
Creation of Mother Cabrini Health Foundation
As mentioned in the purchase agreement from last fall, the Catholic Church announced the creation of the Mother Cabrini Health Foundation to provide assistance to "needy New Yorkers of every color, every religion, and every background."
The Archdiocese stated that the foundation has assets totalling $3.2 billion, plans to issue $150 million in annual grants to New Yorkers in need, and will be directed by a board consisting of "health experts, business leaders, and philanthropists."
"The Mother Cabrini Health Foundation will aim to transform the lives of underserved New Yorkers from all corners of the state and set a national model for addressing the health and wellness needs of low-income communities," Cardinal Timothy Dolan, Archbishop of New York, said in a statement.
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.
Currently, New York faces a $4 billion budget deficit and dwindling federal payments for cost-sharing reductions and the Medicaid Disproportionate Share Hospital program.
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.
Bill Hammond, health policy director for the Empire Center for Public Policy, viewed the policy as a way to capitalize on the Fidelis-Centene deal.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.