A Jacksonville, Fla.-based Blue Cross/Blue Shield insurance subsidiary agreed to acquire Pittsburgh, Pa.-based Highmarks Medicare subsidiary.
Diversified Service Options (DSO), a wholly owned subsidiary of Blue Cross and Blue Shield of Florida and the and the holding company for First Coast Service Options (FCSO), will acquire Highmark Medicare Services (HMS).
Financial terms of the transaction, expected to close by Jan. 1, 2012, were not disclosed.
Both HMS and FCSO will continue to operate as separate, independent organizations, as wholly owned subsidiaries of DSO, officials said.
This change was prompted by Highmarks provider strategy, said David OBrien, executive vice president of Highmark, in a statement. The decision was a difficult one but one which best positions HMS to maintain its current business and pursue its government business growth strategy.
HMS holds the Medicare Administrative Contractor (MAC) contract for Jurisdiction 12 (J12), which is comprised of Pennsylvania, New Jersey, Maryland, Delaware and Washington, D.C. When combined with FCSOs existing MAC J9 contract, which includes Florida, Puerto Rico, the U.S. Virgin Islands, the two DSO companies will serve Medicare beneficiaries in five states, two U.S. territories, and Washington, D.C.
