Fiserv’s Third Party Solutions sub is acquiring competitor WorkingRx. As a result, if/when the deal closes, there will be only one third party biller.
Terms were not disclosed.
Implications follow.
Monopolistic issues – it is possible that the FTC will somehow get involved in this, but I wouldn’t hold my breath. Workers comp is really small, and WC Rx is even tinier. Perhaps some of the large payers will ask for an inquiry, but the present administration seems predisposed to approve most of these transactions.
There are a host of potentially problematic issues arising from the proposed merger – price-and-term setting by Fiserv in negotiations with pharmacies and payers; an increased emphasis on litigation as a business practice; a revamped effort to grow the DirectCompRx subsidiary of Fiserv (DCRx is a WC PBM) and award DCRx preferential status as a PBM partner.
PBM issues – Several WC PBMs that have been attempting to work with the TPBs in an effort to improve first fill capture, network penetration, and utilization management. Frankly, TPBs are not terribly motivated to help PBMs, as each script that goes to a PBM is money out of the TPB’s coffers. It remains to be seen how the new merged entity will interact with PBMs.
Core issues in the TPB business model – Key questions are why this deal and why now? TPBs have been competing hard for business, agreeing to increasingly pharmacy-friendly terms such as faster payments. On the A/R side of the financials, TPBs have been dealing with increasing delays in payment. Their books are also chock-full of receivables that are months old, a good chunk of which may never be paid. Sources indicate the A/R issue is one of, if not the, primary reason neither TPB sold when it was on the block earlier this year.
What does this mean for you?
Perhaps the new TPB will be less belligerent and easier to work with. Want to give odds?
