Concentra’s naming of Norm Payson MD as the company’s new “non-executive” chairman of the board appears to be yet another sign that Concentra is positioning itself for sale or IPO. Long rumored to be preparing to go public, Concentra may be closer now than at any time in the past few years.
Payson got his start in managed care at HealthSource in New Hampshire 20 years ago. He and others built that HMO from the ground up and sold it to CIGNA in 1997. He then joined Oxford in 1998, was there through the turnaround and left it in excellent condition in 2002.
Payson’s role appears to be “non-operational” to say the least; he will be working on strategy issues, providing guidance to senior management, etc. He will be making an investment of $10 million in the firm; before you jump to conclusions, understand that Payson will also be receiving “awards of restricted and unrestricted stock and options
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Joe, Concentra is well known for its cafeteria plan approach to Managed Care if there strategy is to use the acquisition of Sedgwick to feed there profit centers would this constitutes a conflict of interest in your opinion? Could you compare this self referral relationship to the Stark bill? Do you think industry insiders would view this as a violation of Antitrust laws? or an attempt to Monopolize the market.
Jay – remember my comments re Sedgwick and Concentra and a possible alliance or single ownership are speculative – I don’t want to get too far ahead of myself or developments.
That said, the industry is already rife with possible conflicts of interest – see Gallagher Bassett-CorVel for example, or Concentra’s incorporation of its medical centers in the Focus network. The WC managed care industry has long allowed, even encouraged managed care firms’ payment of “commissions” to TPAs, and as noted in my blog posts about the Broward School Board debacle, there are a host of problems with that practice.
In addition, many WC payers, including AIG, Liberty, CNA, and others have their own internal profit centers providing managed care services to their customers; some charge fees based on percentage of savings below fee schedule. So, there are many examples of what could be construed as self-dealing. However, the alternative explanation is also viable – these companies are providing integrated services to meet client needs.
As to Stark or other self-dealing implications I am no attorney so can’t comment on that.