Business

Coventry sells part of its Medicaid business

NEWS IN BRIEF — Posted June 22, 2009

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Bethesda, Md.-based Coventry Health Care has agreed to sell its Medicaid pharmacy benefits and administrative service business to Magellan Health Services for $110 million in cash.

In conjunction with the deal, Coventry hired Magellan subsidiaries National Imaging Associates and ICORE Healthcare to manage its imaging and oncology benefits in five markets for at least the next three years.

Coventry Chief Executive Officer Alan Wise, who in January took the company's top executive position for the second time, said that after a review of Coventry's business, the leadership determined that the business, acquired with its First Health Group purchase in 2005, "was not an asset that complemented the company's long-term strategy."

Coventry will continue to act as a Medicaid managed care organization in eight states.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2009/06/22/bibf0622.htm.

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