AmerisourceBergen Corporation has announced that the company has agreed to acquire all of the outstanding stock of Health Advocates, Inc. of Tampa, Florida, for approximately $83 million in cash. Health Advocates is a leading provider of Medicare set-aside cost containment services to insurance payors primarily within the workers' compensation industry. The transaction is expected to close by the end of October 2006, and to be slightly accretive to the company's fiscal 2007 earnings.
Following the close of the transaction, Health Advocates will be renamed PMSI MSA Services and will become part of AmerisourceBergen's workers' compensation business. Health Advocates' Founder and president, June Simpson, will remain with the company as president, PMSI MSA Services and will report to Mark Hollifield, president of PMSI, a company release stated.
Medicare set-asides are required in certain worker's compensation settlements. The set-asides are funds established to cover future medical and prescription drug expenses incurred as a result of a job-related injury that would have been paid by Medicare. The amount of the set-aside is dependent on a number of complex factors, and ultimately must take Medicare into consideration in order for a workers compensation settlement to be finalized. The purpose of the set-aside is to ensure that Medicare is not burdened with costs that should be covered by the private workers' compensation insurer.
"We are pleased to add the expertise of Health Advocates to PMSI, our existing workers' compensation pharmacy solutions business," said R. David Yost, chief executive officer of AmerisourceBergen. "Since Medicare now provides coverage for prescriptions through its Part D program, our workers' compensation customers need to address both medical costs and prescription drug costs when determining Medicare set-asides. The addition of Health Advocates, combined with PMSI's industry leading pharmacy and clinical solutions, truly gives PMSI the ability to provide our collective customers with a fully integrated Medicare set-aside solution."
"We are thrilled to join AmerisourceBergen's workers' compensation business. Together we will offer a more comprehensive service to our customers to assist them with managing Medicare set-aside issues and pharmacy benefits in the most efficient manner possible," said Simpson.