Value Health has sold its Lewin-VHI consulting unit to Quintiles Transnational Corp., a drug development company in Research Triangle Park, N.C., for $30 million.
The consulting group will be renamed the Lewin Group and will continue to be headed by Lawrence Lewin, chairman and chief executive officer, and Robert Rubin, M.D., president and chief operating officer.
Avon, Conn.-based Value Health decided to sell the consulting firm last year after conflict-of-interest charges lost it about $270 million worth of government managed-care business.
Last year, Value Behavioral Health, a Value Health subsidiary, lost $183 million in mental health and substance-abuse treatment business as part of a $2.5 billion military managed-care contract originally won by Qual-Med because Lewin-VHI, based in Fairfax, Va., advised the Pentagon on the contract (Aug. 7, 1995, p. 24).
That loss of business came on the heels of an Iowa state court decision that rejected an $86.8 million contract award to Value Behavioral Health by the Iowa Medicaid program because Lewin-VHI had advised the state on its managed-care program.
That loss of business prompted Value Health to put Lewin-VHI on the block. Lewin-VHI's management first proposed a buyout, but that deal never was completed. Lewin-VHI's management was not available for comment.
Value Health first sold the defense procurement consulting group to its chief, David Kennell (Aug. 28, 1995, p. 24). That unit became Kennell and Associates.