WebMD Corp., Elmwood Park, N.J., placed a $280 million bet on growth generated by the Health Insurance Portability and Accountability Act by agreeing to acquire Medifax EDI, Nashville. Medifax, a privately held company, provides insurance eligibility information on patients in 140 health plans including Medicare and most Medicaid plans. It will be merged with WebMD's Envoy claims-processing division, also located in Nashville. The deal is expected to close in November subject to regulatory approvals. Medifax projected 2003 revenue of more than $120 million, nearly double its 2001 revenue of $65 million, spokesman Tommy Lewis said. About half of the revenue is from a pharmacy services unit, which will be spun off at closing. The $280 million purchase price includes certain assumptions of liabilities and will be paid in cash, WebMD said. Electronic eligibility checking is among a set of eight standard transactions targeted by the "administrative simplification" section of HIPAA. -- by John Morrissey
WebMd to acquire electronic eligibility firm
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