OccuSystems and CRA Managed Care have agreed to merge into a new company dedicated to controlling workers' compensation costs.
The new Concentra Managed Care will combine the country's largest occupational healthcare provider and a leading case manager into a company with 1996 revenues of $350 million.
Dallas-based OccuSystems manages the practices of 203 physicians at its 117 occupational healthcare centers in 16 states.
CRA provides case management and cost containment services to employers, casualty insurers and state workers' compensation funds in 49 states, the District of Columbia and Canada. Its subsidiary, Nashville-based Focus Healthcare Management, operates a network of 177,000 workers' compensation providers in 35 states.
The merger is meant to integrate care and case management, resulting in quicker returns to work.
"The new company redefines how workers' compensation cases are handled from the medical side to the claims management side," said Sheryl Skolnick, a managing director at Robertson Stephens & Co. in New York.
CRA's operations could benefit from OccuSystems' information systems and outcomes measurement while potentially directing volume to OccuSystems' clinics and making them a more attractive buyer for physicians, Skolnick said.
John Carlyle, chairman and chief executive officer of Dallas-based OccuSystems, will become chairman of Concentra, which will be based in Boston. Donald J. Larson, president and CEO of Boston-based CRA, will be president and CEO. Each company will nominate four board directors.
OccuSystems' 21.6 million shares will be exchanged for 57.3% of the combined company; CRA's 9 million shares will buy the remaining 42.7%. The merger is subject to stockholder and federal antitrust approvals. Completion is expected around August.