Medical Mutual of Ohio Acquires Benefit Services
Through the recent acquisition of Akron-based Benefit Services, Medical Mutual of Ohio (about $2 billion in annual revenue) has brought on custom capabilities and expanded its number of members administered on a third-party-administrator (TPA) basis to more than 1 million. The deal provides for Benefit Services to operate as a wholly owned subsidiary of Cleveland-based Medical Mutual from Benefit Services' current location and is not expected to impact the acquired company's approximately 110 employees. The terms of the deal were not disclosed.
Benefit Services provides TPA services, including self-funded claims administration, managed care administration and fully insured claims administration, to 130 self-insured group customers in nine states covering approximately 100,000 members. The company's small-group focus has resulted in a custom approach to TPA business developed over Benefit Services' 30 years in business, according to Errol Brick, chief marketing officer and EVP, Medical Mutual.
That approach is increasingly desirable in the market as healthcare costs continue to increase, asserts Brick. "This move is going to improve our ability to tailor benefit designs to the growing needs of the marketplace," he comments.
Medical Mutual, which manages roughly equal numbers of members as both a carrier and TPA, traditionally has provided a more "industrial strength" type of TPA service, oriented to the prevalent model of large group coverage, according to Don Olson, a spokesperson for the company. "The deal is a great way to leverage the best of both [Medical Mutual's and Benefit Services'] offerings," he remarks. "Medical Mutual will continue to administer the large groups on our main systems. But what Benefit Systems will do for our TPA business is to enable us to take the attributes of our high-powered processing capabilities and wrap them around Benefit Services' ability to be a boutique administrator."
In addition to boosting the processing capabilities Benefit Services can offer to its customers, Medical Mutual brings to the marriage financial strength and other products and technical capabilities, including care management programs, e-commerce tools and utilization review, according to Olson.
"We have had a relationship with Medical Mutual for over eight years," says Jerry Newbauer, COO, Benefit Services. "We're looking forward to having additional resources that will give us the ability to bring even greater value, service and stability to our clients."
The best-of-both-worlds character of the deal will result in more services and better pricing, Newbauer adds. "Benefit Services is going to provide [customers] with additional services and even more savings."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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