Madison Health Group (MHG) has announced its plans to purchase managed behavioral health provider Magellan Health.
This comes roughly five years after payer giant Centene Corporation (NYSE: CNC) bought Magellan Health at a valuation of $2.2 billion.
Magellan Health manages behavioral health services for health plans, employers and government agencies.
Following the deal, Magellan will become an independent organization, with MHG’s backing to support innovation. Specifically, the new funds will be used to expand its clinical programs into new markets, leveraging “enhanced technology, AI, data and analytical solutions” for its clients, according to social media posts.
“Subject to the satisfaction of customary closing conditions, including regulatory approvals, Magellan will become the only independent, managed behavioral healthcare company focused exclusively on providing access to quality care to communities domestically and abroad,” MHG said in a LinkedIn post. “Madison Health Group is providing the backing and expertise to make this transition possible. Our team brings together healthcare operators, behavioral health experts, and investors who are deeply committed to Magellan’s mission. “
MHG appears to be a relatively new firm with advisors from across behavioral health, including Christina Mainelli, former Quartet CEO, Christopher Molaro, CEO of NeuroFlow and Kenneth Fasola, former president at Centene Corporation. According to its website, the investment and innovation group is focused on whole-person care, expanded access to care, innovative technologies, AI and data analytics and clinical quality.
“What’s remarkable about Magellan is that it’s already serving over 20 million members across the U.S. and around the world,” Mainelli said on LinkedIn. “Independence gives them the focus and resources to go even further. I’m inspired by their continued commitment to whole-person, human-centered care and excited to see what this team achieves in the years ahead.”
In a social media post, MHG said it will work alongside Magellan’s CEO, Caroline Carney, who assumed the role in July of 2025 after serving as the organization’s chief medical officer since 2016.
MHG said that Magellan will continue to operate its “evidence-based clinical programs, including services for foster children, carve-out services, crisis services, autism care, behavioral health prescribing, complex and high-acuity behavioral health management, and services to active-duty military and federal agencies.”
This could be an opportune time for Centene to sell Magellan as the payer continues to face behavioral health cost pressures. During its Q4 earnings call, the health plan revealed that behavioral health accounts for half of its excess costs.
The payer has previously reported difficulties with rising spending on applied behavior analysis (ABA) services, even forming a task force to address it.