Unisys to Divest Health Information Management Business to Molina Healthcare
January 22, 2010
Unisys Corporation has decided to sell its health information management (HIM) business to Molina Healthcare, Inc., a managed care organization, in an all-cash deal valued at $135 million. Subject to a standard working capital adjustment, the transaction amount will be paid using Molina’s credit facility at closing. Liable to closing conditions and customary regulatory approvals, as well as receipt of customer consents, the acquisition is slated to complete during the first half of 2010.
Following the acquisition, HIM’s 900-odd employees will join Molina Healthcare. Under the terms of the contract, for one year, Unisys will provide some technology and transitional support services to Molina. The acquisition will expand Molina’s product portfolio with a range of tools varying from full-risk managed care health plans to fee-based information technology solutions.
Unisys’ HIM Business Unit: The approximately $110 million HIM business, supports several state government clients with services and solutions required for the management of Medicaid and other healthcare programs. HIM offers business process outsourcing solutions, as well as design, development, and implementation services for Medicaid management information systems (MMIS). At present, the division holds contracts with the following states:
• New Jersey: Being a Medicaid fiscal agent for New Jersey since 1989, the vendor is currently associated with the state through a $212 million contract extension, signed in early 2009, for the delivery of MMIS and Medicaid fiscal agent services for the next 5 years (base 3 years and optional 2 years).
• Maine: Maine Department of Health and Human Services (DHHS) holds a $179 million, firm-fixed-price agreement, signed in May 2008 to design, develop, implement and operate a new MMIS. The seven-year contract also includes the delivery of technical services to mange the state’s Medicaid program, MaineCare.
• West Virginia: The West Virginia Department of Health and Human Resources (WV DHH) has roped in HIM as a fiscal service agent to offer Medicaid services, which include electronic media claims (EMC) helpdesk, provider relations, consumer services, provider enrollment and pharmacy helpdesk.
• Louisiana: The HMI unit supports Louisiana Department of Health and Hospitals (DHH) with several technological efforts to help mange its Medicaid program and improve spend management.
• Idaho: As a part of a potential multi-million dollar contract signed with the Idaho Department of Health (DHH) in December 2007, HIM is tasked to offer systems and operational services for the state’s Medicaid program. The two seven-year contracts include a two-year initial phase for the designing, development and implementation of the Idaho MMIS called Health PAS; and a subsequent operations phase of five years, totaling $116.5 million. Additionally, the agreement includes a $51 million three-year option (exercisable through mutual agreement), bringing the deal value to $167.5 million (if all the options are exercised).
• Florida: HIM supports the state with drug rebate administration services under its Medicaid program.
Now, following the strategic acquisition of the Unisys-HIM business, Molina Healthcare’s president and CEO, J Mario Molina states that the acquired asset, which complements Molina’s Medicaid health plan business, will extend the company’s offerings beyond managed care expertise. He further asserts that state governments are increasingly focusing on cost containment in their health programs to enable Medicaid members to improve their health; and now with the current acquisition, Molina as a single company will be able to meet the Medicaid program requirements of the state clients.
About Molina Healthcare: Headquartered at California, Molina Healthcare currently caters to about 1.4 million clients across Washington, Florida, California, Ohio, Missouri, Mexico, New Utah, Texas, and Michigan. With a track record of above 25 years in managed care services, the vendor currently has six National Committee of Quality Assurance (NCQA)-accredited health plans. By contracting with the state governments, the vendor offers an array of health care services to individuals and families, qualifying for government-approved programs like the State Children’s Health Insurance Program (SCHIP) and Medicaid.
About Unisys: Based at Blue Bell, PA the vendor specializes in transformation and outsourcing of data centers, end user support services and outsourcing, security, and application outsourcing and modernization. For above 50 years Unisys has been catering to the public sector market through the Unisys Center for Innovation in Government, which leverages best practices and research in technology innovation to combine experience, experts, and insights in government.
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