The largest Medicaid insurer in the US just led a $60 million investment in GV-backed startup Quartet Health

The largest provider of Medicaid health plans in the US just made a big investment in a health technology startup that’s working to link mental health to physical health.

On Thursday, Quartet Health said it has raised $60 million in a funding round led by health insurer Centene. In total, Quartet has raised $153 million from investors including GV, F-Prime Capital, and Oak HC/FT, and has a valuation of $490 million, according to PitchBook.

Quartet is a behavioral health startup that connects a patient’s primary care doctors with his or her mental health professionals to identify co-occurring or related issues. That connection is built by working with health plans like Centene, Highmark in Pennsylvania, and Blue Cross Blue Shield in North Carolina. The hope is that by better connecting mental health to physical health via Quartet’s platform, it might keep members healthier.

Initially, Centene plans to roll out Quartet’s platform to Medicaid members in Louisiana and Illinois.

“Centene has committed to serving the whole person and we recognize that mental health challenges have a disproportionate impact in the population that we serve,” Centene CEO Michael Neidorff said at an investor meeting Friday. “We have over a decade of experience on behavioral health integration. And we’re excited to bring technology solutions to our provider community to address these important challenges.”

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Quartet board member and Oak HC/FT managing partner Annie Lamont pointed to Centene’s presence in the Medicaid market and its spending on mental health services as a reason to turn to Quartet.

“It’s pretty logical that they would come to us,” Lamont said.

Mental healthcare in Medicaid

In March, Centene said it’s acquiring rival health insurer WellCare in a $17.3 billion deal.

The two companies have a big presence in the government-funded health-insurance programs Medicaid and Medicare, as well as on the individual exchanges set up under the Affordable Care Act. All in, the two companies cover about 22 million Americans, including about 12 million in Medicaid.

Medicaid, the state and federal program that pays for medical care for some low-income Americans, covers 72.6 million people. It’s the largest payer for mental health services in the US.

Centene hasn’t made many venture investments in recent years, though in 2018 it did take a stake in telehealth startup RubiconMD. The company has favored acquiring other health insurers, striking deals for New York’s Fidelis Care in 2017 and California-based Health Net in 2015.

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