AMG-SIU Inc., a Santa Ana company that works with insurers and governments to cut healthcare waste, is getting a new owner.
Earlier this month, HMS Holdings Corp. of New York said it was buying AMG-SIU for $26.1 million.
HMS, a publicly traded company, provides consulting and cost-recovery services to government healthcare programs such as Medicare and Medicaid.
The deal calls for a $13 million payment and $13.2 million in future payments, provided AMG-SIU meets business goals, according to HMS.
AMG-SIU provides auditing and consulting services to insurers and other payers to help them find and prevent fraud, waste and abuse.
The company was profiled by the Business Journal last year as a business that was thriving amid the economic downturn.
AMG-SIU works through investigators to monitor healthcare claims submitted by doctors and other healthcare providers.
It works with state governments on Medicaid, the joint federal-state healthcare program for poor Americans, as well as with Medicare, the federal health insurance program for seniors.
AMG-SIU’s clients include Sharp HealthCare, a San Diego hospital operator and healthcare provider, Kern Family Health Care in Bakersfield and El Paso First Health Plans Inc. in Texas.
In 2009, Dennis Demetre, AMG-SIU’s chief executive and cofounder, said the company had “tripled our business” from a year earlier, thanks to efforts by insurers and government health plans designed to cut costs.
The company started out processing claims and offering other services to control costs for insurers. It shifted its focus about six years ago to fighting healthcare fraud, waste and abuse after it received requests from clients.
“It kind of morphed into a specialty,” Demetre said.
A year ago, Demetre indicated that AMG-SIU was more likely to remain independent or seek out partnerships. He said some large investors had expressed interest in “sharing the wealth, but we’re not quite sure we want to do that.”
Surgery Center Opposition
Outpatient surgery centers in Orange County and throughout California are lining up against a proposed cut in payments from cash-strapped Sacramento for caring for workers injured on the job.
The California Division of Workers Compensation has said it wants to conform to the way that Medicare pays independent surgical centers.
Medicare now pays independent outpatient surgical centers about 67% of what they pay surgical centers that are part of hospitals, according to a study issued by the Rand think tank a year ago.
The Rand study contends the change could save the state $70 million a year. Regulators have said it’s likely that fees to independent centers would be cut.
The California Association of Surgery Centers, a Merced-based trade group, is unhappy with the proposal.
Surgical centers and advocates argue that any change could cut fees 40% to 50%, as well as establishing a two-tiered payment rank that would force them to send pricier cases to hospitals.
To make their argument, the advocates note that workers’ compensation is different than Medicare.
“Our point of contention here is about 7% of Medicare patients are orthopedic in nature,” said Shannon Blakeley, association president and vice president of operations for National Surgical Care, a Dallas-based company that operates the Fullerton Surgical Center. “When you get to the workers’ compensation population, it’s 50%. So it’s a totally different patient population.”
Because of the complexity of surgeries, centers “should be paid the same as the hospital,” Blakeley said.
Allergan Exec: New Position
Douglas Ingram, chief administrative officer and corporate secretary for Irvine drug maker Allergan Inc., was named the head of its Europe, Middle East and Africa unit earlier this month.
Ingram will begin the position Aug. 1.
Matthew Maletta, now Allergan’s associate general counsel and assistant secretary, will take over as secretary and general counsel. Samuel Gesten, an assistant secretary, will become an executive vice president and part of Allergan’s executive committee.
The drug maker said the remaining members of its executive committee will handle the work of the chief administrative officer position.
Bits and Pieces
Irvine eye drug maker Ista Pharmaceuticals Inc. expanded its executive team. Doral Fredericks, formerly with Novartis Pharmaceuticals, a unit of Switzerland’s Novartis AG, is the vice president of medical affairs. Jane Pritchett Henderson, previously with Axerion Therapeutics Inc. of New Haven, Conn., is vice president of business development. Chris Dax, a former senior vice president with Irish drug maker Elan Corp., is Ista’s vice president of marketing … Hycor Biomedical Inc., a Garden Grove medical diagnostic company, said that it appointed Richard Hockins as its vice president of sales and marketing. Hockins’ background includes working at Thermo Fisher Scientific Inc. of Waltham, Mass. … Cortex Pharmaceuticals Inc., an Irvine drug developer, said it received a grant from the Michael J. Fox Foundation for Parkinson’s Research to test some of its Ampakine compounds for their ability to restore brain function in animal models of Parkinson’s disease. The amount of the grant wasn’t disclosed … West Coast University in Costa Mesa said it would offer master’s of science programs in nursing and healthcare management.
