Health Care Service Corp., operator of Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas, has agreed to acquire TMG Health, a King of Prussia, Pa.-based provider of business process outsourcing for Medicare, Medicaid and group retiree health plans. No financial terms were disclosed. TMG Health had raised over $4 million in VC funding from NewSpring Capital and SCP Private Equity Partners.
Health Care Service Corporation (HCSC), which operates the Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas, has entered into an agreement to acquire TMG Health, the nation’s leading provider of business process outsourcing for Medicare, Medicaid and group retiree health plans.
“The complexity of government business requires highly-skilled workers knowledgeable in all compliance regulations,” said Pat Hemingway Hall, president and chief operating officer of HCSC. “We recognize that TMG Health’s greatest asset is its employees and we are excited about gaining immediate access to the expertise we need to pursue growth opportunities in this area.”
When the merger is finalized, TMG Health will become a wholly-owned subsidiary of HCSC, operating as an independent organization with a separate board of directors. TMG Health founder Jack Tighe will serve on this board and remain president and CEO. The company will continue to meet the needs of all its health plan clients and will maintain its own brand identity.
“As one of TMG Health’s own clients, HCSC values the unique nature of our company,” Tighe said. “TMG Health will continue to focus on creating unique applications and services for the administration of government health programs for our client base.”
TMG Health currently services over 1.9 million Medicare and Medicaid members and about three dozen health plans nationwide.
Health Care Service Corporation, a Mutual Legal Reserve Company, is the largest customer-owned health insurer in the United States and the fourth largest health insurer in the country overall, with 12.4 million members in its Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas. The company is an independent licensee of the Blue Cross and Blue Shield Association. HCSC also has a rating of AA- (Very Strong) from Standard and Poor’s, Aa3 (Excellent) from Moody’s and A+ (Superior) from A.M. Best Company. For more information, visit www.HCSC.com.