Anthem workers comp bill review, UR, and case management businesses will be/has been sold to ISG, owner of Stratacare and Bunch. The deal has been in the works for some time, with customer discussions occurring over the last couple weeks. Don’t know the details; Anthem did provide the following comment in response to my inquiry:
“”I want to let you know that Anthem Workers’ Compensation is currently working on a number of projects that will best meet the needs of our clients. As soon as we are in a position to provide a detailed response to your question, we will reach out to you first to let you know.”
The fallout from this will affect Xerox/CompIQ; they provide the platform for Anthem’s bill review and I’d expect StrataWare to supplant CompIQ’s technology when contractual and transition issues are worked out. This is a good move for ISG, as it adds bill volume to their bill review platform, cements a relationship with a very solid network partner, and takes share from a competitor. As ISG owns StrataWare, they will see an immediate (or rather as-soon-as-they-move-to-StrataWare) bump up in operating margin as they don’t have to ‘pay’ for access to a bill review system.
It’s also notable that Anthem decided to exit businesses that have operating margins considerably more modest than those enjoyed by networks. Case management and bill review operations generate 15% – 30% margins; well-run networks should more than double those levels as variable costs are so low. The big healthplan company has been looking to expand its workers comp business into additional jurisdictions; this will generate capital that could be used to help pay for that expansion in addition to reducing the number of issues management has to pay attention to.
I did contact Xerox/CompIQ and ISG earlier but did not hear back.
Details to come as they’re made available.
Apr
19
