Sedgwick CMS, the Memphis, Tenn.-based U.S. claims administrator, pulled off something of a coup in June with the purchase by Minneapolis-based UnitedHealth Group of a portion of the largest investor's stake in the company for $54 million.
Meanwhile, after months of seeking a buyer, PMSI, the Tampa, Fla.-based workers' compensation pharmacy benefits manager, found HIG Capital. The Miami-based private equity investment fund agreed to pay AmerisourceBergen, the large wholesale pharmacy distributor, $40 million for PMSI plus a contingency fee up to $10 million. AmerisourceBergen announced it would take a charge of $222 million representing its loss on its investment in the PMSI subsidiary.
Throughout the industry there continues to be talk of consolidation among the largest third-party administrators and the smaller, regional TPAs.
The Sedgwick/UnitedHealth deal followed an announcement late last year that the two companies had agreed to develop a program for integrating the servicing of employer-sponsored disability, group medical, workers' compensation, and leave and absence programs.
"While we were developing our integrated health and wellness workers' comp model, we came to realize that the two organizations shared a lot in common, in particular the desire to bring innovation to the industry," said David North, president and CEO of Sedgwick CMS. UnitedHealth is a major provider of group health coverage. North said the new, integrated product may begin to rollout by the end of the year, adding that the marketplace appears to want a solution to the total scope of health-related services.
He also acknowledged that the partnership with UnitedHealth offers Sedgwick the possibility to invest in developing its own, independent national workers' comp managed care medical network. Currently, that market is dominated by Coventry Health with its acquisition of the workers' comp managed care network of Concentra and a subsequent partnership with Aetna's medical disability network.But, North added, nothing is currently in the works.
Meanwhile PMSI pledged that when the sale is final, the company will be able to gain momentum, enhance program efficiencies and expand its service portfolio.
September 1, 2008
Copyright 2008© LRP Publications