Meritain Health, formerly North American Health Plans, is expanding again, doubling its size to create the nation's largest privately held health benefits plan manager through its newest deal.
The Amherst-based third-party administrator said that it paid an undisclosed price to buy CBSA Performax of Baltimore, which itself was created in August from the merger of Corporate Benefit Services of America and Performax.
The combined company will operate under the Meritain name and maintain CBSA's presence in Baltimore and Minneapolis, as well as regional sales and service offices.
In all, it will now have 1,350 employees, 1,400 self-funded clients, more than a million members nationwide, and regional offices in 28 cities across the country. It employs 475 in Amherst, which will remain the headquarters.
"This acquisition is an important step as Meritain Health pursues its continuing strategy of controlled expansion through acquisition and the delivery of innovative products and services," said Elliot Cooperstone, CEO of Prodigy Health Group, the investment holding company that owns Meritain.
The company also gains new management. CBSA President and CEO Jacob L. Canova will become chairman and CEO of Meritain, replacing Cooperstone, who remains head of parent Prodigy.
"It allows me to concentrate on some other things at the Prodigy level," Cooperstone said. "We're a much larger company today than we were a short time ago. And with this acquisition, we can continue to add to our team."
Meritain also named Ian Gordon, former chief operations officer of Concentra Network Services, as its new president and chief operations officer, and hired Steve Adamson, former vice president of Enterprise Business Operations at USAA, as its senior vice president and general manager in Minneapolis.
The deal is the latest acquisition by Meritain, which was founded in 1983 as North American Health Plans and grew aggressively for 20 years through a series of more than 10 acquisitions across the country.
Originally founded by Ronald K. Zoeller, it was acquired in January 2005 by North American Health Care, an investment firm run by Cooperstone that was established to profit from consolidating the third-party administrator industry. Cooperstone's firm was later renamed Prodigy and North American became Meritain in February 2006, shortly after Zoeller left the company.
The company also recently signed a deal with Aetna Signature Administrators, allowing it to offer Aetna's national preferred provider organization network to Meritain clients and members. Meritain clients can also buy Aetna stop-loss insurance to protect them against unusual, catastrophic losses.
Meritain's growth is part of the overall consolidation of the third-party benefits administrator industry, which has about 400 firms nationwide, down from a height of more than 600. Most are small, privately held firms that are finding it increasingly difficult to compete with larger rivals, and are turning to mergers to gain scale.
New York state regulators just approved the acquisition of another big third-party administrator, Brokerage Concepts of King of Prussia, Pa., by HealthNow New York, parent of Blue Cross Blue Shield of Western New York.
Prodigy, based in Connecticut, now serves more than 3.5 million members through Meritain, a Columbus, Ohio-based medical management company called American Health Holding, a managing general insurance underwriter and a pharmacy benefits management unit. The company's clients are self-funded employers, managed care companies and other insurers.