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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 24, 1998
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CONCENTRA MANAGED CARE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 000-22751 04-3363415
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
312 UNION WHARF 02109
BOSTON, MASSACHUSETTS (Zip code)
(Address of principal
executive offices)
Registrants telephone number, including area code: (617) 367-2163
NOT APPLICABLE
(former address if changed since last report)
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ITEM 5. OTHER EVENTS
See the press release attached hereto as Exhibit 99.1 dated February
24, 1998 announcing the consummation of the acquisition of all the
outstanding capital stock of Preferred Payment Systems, Inc. by Concentra
Managed Care, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release of the Registrant dated February 24, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONCENTRA MANAGED CARE, INC.
(Registrant)
By: /s/ Richard A. Parr II
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Name: Richard A. Parr II
Title: Executive Vice President and General Counsel
Date: March 2, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
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99.1 Press Release of Registrant dated February 24, 1998
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EXHIBIT 99.1
[CONCENTRA MANAGED CARE, INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
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CONTACTS: Joseph F. Pesce James M. Greenwood
- -------- Executive Vice President and Executive Vice President of
Chief Financial Officer Corporate Development
Concentra Managed Care, Inc. Concentra Managed Care, Inc.
(617) 367-2163, EXT. 5101 (972) 364-8127
CONCENTRA MANAGED CARE ACQUIRES PREFERRED PAYMENT SYSTEMS
Boston--Concentra Managed Care, Inc. (Nasdaq/NM:CCMC) announced today
that it has acquired Naperville, Illinois based Preferred Payment Systems (PPS).
The transaction significantly expands Concentra's current market presence in
retrospective bill review services for the group health marketplace. The
combination of PPS and Prompt Associates, which was acquired by Concentra in
1996, results in an entity that is a clear leader in the industry.
Under the terms of the transaction, approximately 7.7 million shares
of Concentra Managed Care common stock and $14.7 million in cash were exchanged
for the outstanding shares of PPS. The transaction will be accounted for as a
pooling of interests and is expected to be non-dilutive to earnings in 1998,
before a non-recurring charge of approximately $10 million to be taken in the
first quarter for integration and transaction expenses, and accretive to
earnings in 1999.
PPS, founded in 1990, is a leading nationwide provider of specialized
cost containment and outsourcing services for healthcare payors. Through its
comprehensive portfolio of products, the Company reduces costs ordinarily
payable on medical bills submitted by healthcare providers and the
administrative expense associated with reviewing and analyzing medical bills.
These services include professional fee negotiation, line-item analysis, and
other specialized audit and bill review processes, as well as access to a
nationwide PPO network. PPS serves as a one-stop outsourcing solution for
cost containment with respect to medical bills that are outside a healthcare
payors contracted network of providers. The Company's net revenue is based
primarily on the amount of price reductions realized by the Company's clients
as a result of its services. PPS analyzes each bill using its Healthcare
Bill Management System ("HBMS"), which incorporates proprietary software,
Company-developed and licensed databases and client-specific preference
profilers. HBMS analyzes all medical bills sent to the Company and, using a
proprietary "scoring" methodology, automatically selects the appropriate PPS
service that will maximize savings for the client. HBMS then incorporates
all the cost-savings information from the analysis in its databases in order
to approve future bill analyses. The combination of PPS and Prompt
Associates now gives Concentra the leading technology in reviewing
out-of-network claims for both inpatient and outpatient bills. Present clients
of PPS include indemnity health insurers, health maintenance organizations
(HMO's) and other managed care organizations and Taft-Hartley funds.
"PPS's advanced technology and innovative products provide a distinct
advantage to our rapidly growing retrospective bill review business," says
Donald J. Larson, Concentra's Chairman and Chief Executive Officer. "This
represents a strategic addition which broadens our core competency as a
reviewer of medical bills in workers' compensation, auto managed care, and
general healthcare.
"We are very excited about the opportunities that this combination
creates for PPS. The development of our proprietary software and bill
scoring methodology enables us to offer multiple cost containment solutions
to an individual claim which is a distinct competitive advantage," says Steve
Nelson, CEO of PPS. "This new relationship enables us to enhance further our
product offerings and expands our reach beyond our core group health
marketplace. Both PPS and Concentra customers will benefit from these
advancements as we jointly deliver the highest quality service options in the
industry.
Concentra Managed Care is the comprehensive outsourcing solution for
cost containment and health management in group healthcare, property and
casualty, and occupational medicine. Concentra offers prospective services
to employers and insurers of all sizes, providing pre-employment testing,
loss prevention services, first report of injury, injury care, specialist
networks and specialized cost
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containment to the disability and automobile injury markets. The company has
123 field case management offices, with approximately 1,350 field case
managers who provide medical management and return to work services in 49
states, the District of Columbia and Canada. The company also has 83 service
locations that offer specialized cost containment services including
utilization management, telephonic case management, and retrospective bill
review. Under the name Concentra Medical Centers, the company operates the
nations largest network of occupational healthcare centers, currently
managing the practices of 255 physicians located in 142 centers in 37 markets
in 20 states.
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This press release contains certain forward-looking statements,
which the Company is making in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, and that
the Company's actual results may differ materially from the results discussed
in the forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, the potential adverse
impact of governmental regulation on the Company's operations, and
interruption in its data processing capabilities, operational, financing and
strategic risks related to the Company's growth strategy, possible
fluctuations in quarterly and annual operations, and interruption in its data
processing capabilities, possible legal liability for adverse medical
consequences, competitive pressures, adverse changes in market conditions for
the Company's services, and dependence on key management personnel.
Additional factors include those described in the Company's Securities and
Exchange Commission filings.
