Is to acquire the leading auto PBM/pharmacy biller – Cogent Works and subsidiary AutoRx.
The announcement, out this morning, contains the usual corporate-speak, but in this case most of it makes sense. Cogent has both work comp and auto PBM operations, as well as a billing unit that handles WC bills for Walgreens and auto scripts for most of the retail chains and food/drugs.
This puts Mitchell into the work comp and auto PBM business.
While (surprisingly) the auto claims billing aspect of the deal isn’t discussed at all, this may well be the most valuable piece. By connecting retail pharmacies with the largest auto claims IT entity, Auto Rx adds a lot of value to those retail pharmacy relationships, while reducing administrative hassles for Mitchell customers and likely increasing Mitchell revenues as well.
On the work comp side, there may be some channel conflict. Mitchell handles work comp medical bills for many payers, has connections with several work comp PBMs. Now that Mitchell is a competitor (Cogent handles WC scripts for the Hawaii and Utah state funds as well as a number of self-insured entities in the west), it will be interesting to watch how things develop.
What does this mean for you?
KKR – owner of Mitchell – has made a smart buy. Expect them to make others in the near future.