Performax to merge with Minn. company

August 22, 2006|By ALLISON CONNOLLY | ALLISON CONNOLLY,SUN REPORTER

Performax, a Baltimore-based health care benefits administrator, said yesterday that it will merge with Minneapolis-based Corporate Benefit Services of America Inc. to form the nation's fourth-largest self-funded health benefits provider.

The combined company, which will be known as CBSA Performax and headquartered in Baltimore, will have more than 500 employees, 21 offices and 800 clients in 46 states, the companies said yesterday in a statement. Terms of the deal were not disclosed.

Jacob L. Canova, president and chief executive officer of Performax, will become chief executive of the combined company. Ralph Wolf, chief executive of CBSA, will return to his health care consulting firm, Wolf/Petravicius Associates Ltd. Wolf could not be reached for comment late yesterday.

Founded in Baltimore in 1987 as Corporate Healthcare Financing Inc., Performax designs and manages health care benefit plans for mid-sized companies with 50 to 2,000 employees.

Canova came on board in 2003, succeeding Keith B. Sullivan, who took the top position two years earlier when Legg Mason Merchant Banking Inc. bought a majority stake in the privately held company.

In the past, Performax handled the sales, marketing and consulting to company clients and outsourced claims processing and case management to third-party administrators such as CBSA, Canova said in an interview yesterday. Now, Performax will be able to provide all services in-house, he said.

"You can control the quality of service when you own it," he said.

As health care costs rise, Canova said, midtier companies are looking for more sophisticated services to control costs. CBSA is known for its medical management program called Guided2Health, which identifies and tracks patients with chronic health problems - or those at risk of developing them - to make sure that they are getting the proper care. This keeps them out of the hospital and makes them less costly for their employers.

Performax has 90 employees in Baltimore, and Canova said he was unsure what impact the merger would have on employment.

While some jobs that are duplicated between the two companies might be eliminated, he said many of those employees will be retrained as the company expands its consulting services.

allison.connolly@baltsun.com

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