ProxyMed will offer the Tampa company's cost containment services. The effect on local employees of PlanVista is unknown.
By KRIS HUNDLEY
Published December 9, 2003
TAMPA - PlanVista Corp. of Tampa is being acquired by ProxyMed Inc. of Fort Lauderdale in a deal valued at more than $100-million in stock and assumption of debt.
The acquisition means that ProxyMed, the nation's second-largest medical claims clearinghouse, will be able to offer its customers PlanVista's cost containment services, saving insurers money.
PlanVista has developed a network of 400,000 physicians, 4,000 hospitals and 55,000 other providers that have agreed to give discounts to patients receiving service "out of network" in return for faster payment. PlanVista provides this repricing service for 750 insurers that provide coverage to more than 2-million members. It processes about 3.9-million out-of-network claims a year, most of which are higher-dollar hospital claims.
ProxyMed processes in- and out-of-network claims for 450 large insurance companies. Last year it handled more than 200-million transactions, most from physicians. In the past, only bigger out-of-network claims have been repriced by ProxyMed, and those have been handled manually. PlanVista's technology allows all out-of-network claims to be matched to its provider base; more than 60 percent of those claims are handled electronically.
Michael K. Hoover, ProxyMed's chief executive, said the deal means insurers will be able to lower their costs by paying less for members' out-of-network services.
"We'll give payers the ability to reprice claims they've never been able to reprice before," he said. "For them it's found money."
For PlanVista, the merger means stability after several years of struggling under a heavy debt load. PlanVista was formed in April 2001 after the restructuring of Tampa's HealthPlan Services Corp. and spinoff of other subsidiaries.
"It's been a long road for PlanVista and its shareholders," said Phillip Dingle, PlanVista's chief executive. "There's no doubt we've been competitively disadvantaged by our financial structure for the last 36 months. Our highly leveraged balance sheet has held back growth. This transaction creates appealing growth opportunities."
The stock-for-stock deal is valued at $57.6-million. PlanVista's common stockholders will receive about 0.0869 shares of ProxyMed common stock for each share of PlanVista common stock. ProxyMed is also assuming $26.5-million of debt and will fund the retirement of an additional $18-million of PlanVista's debt.
Hoover said most of PlanVista's senior management will join ProxyMed after the deal is completed, which is expected by the end of the first quarter next year. Dingle said no decision has been made about the future of PlanVista's Tampa headquarters, which houses about 25 employees. PlanVista also has about 105 employees in Middletown, N.Y.
"We don't know who will be moving around where," Dingle said. "Anything's possible."
