|WellPoint to Acquire American Imaging Management|
Acquisition of Leading Radiology Management Company Advances WellPoint's Initiatives in Cost Management, Transparency and Quality
INDIANAPOLIS and DEERFIELD, Ill., July 9 /PRNewswire-FirstCall/ -- WellPoint, Inc. (NYSE: WLP), the nation's leading health benefits provider, announced today that it has entered into an agreement to acquire American Imaging Management (AIM), a leading radiology benefit management and technology company with health plan clients representing over 20 million consumers. The acquisition directly ties to WellPoint's strategy to become the leader in affordable quality care and the most trusted choice for consumers.
The acquisition will allow WellPoint and AIM to advance their initiatives to reduce growth in health care expenditures, increase transparency and promote improved quality in health care. AIM will continue to enhance and expand the services they provide to WellPoint as well as their other customers nationwide.
Diagnostic imaging is one of the fastest growing types of health care expenditures in the United States, with a double digit annual growth rate. WellPoint has seen a dramatic reduction in its radiology trend with AIM's technology and expertise. This transaction will enable WellPoint to apply AIM's capabilities to other high tech, high cost categories where technology is driving uncertainty in ordering and increased health care costs. The AIM tools help bring transparency to health care categories where, as with radiology, price and quality vary dramatically within markets.
"By acquiring AIM, we can further manage costs and help improve the quality of radiology services for our members while at the same time support AIM in their development of initiatives to help manage future high cost technology services," said Angela F. Braly, president and chief executive officer of WellPoint. "AIM makes innovative use of technology and creates easy-to-use programs that help ensure consumers receive the quality services they need while eliminating unnecessary testing and costs. As an industry leader in medical management, the acquisition of AIM will allow us to continue to reduce growth in health costs while helping to ensure our members have access to the best possible care."
David S. Harrington, chairman and chief executive officer of AIM, said, "AIM delivers clinical excellence, outstanding service to clients and physicians, and uses technology to create intelligent solutions in health care management. Combining our operations with WellPoint - a company that demonstrates these same values - supports our vision of expanding our technology platform within diagnostic imaging and into other health services."
Radiology management is increasingly important in helping to ensure that consumers receive the quality tests they need while creating greater efficiency in the delivery of health care. While advances in diagnostic imaging have vastly improved clinical care, increased ordering complexity, safety, redundant and duplicative testing and confusion on the value at the performing sites have created a growing urgency to manage this $100 billion plus segment of health services.
"AIM's technology helps physicians and their patients choose the highest quality, most cost effective sites for diagnostic imaging services," said Dr. Sam Nussbaum, executive vice president and chief medical officer for WellPoint. "Their proven technologies and capabilities can be expanded to improve health care quality and help optimize costs in other key areas such as orthopedics, cardiology, lab services and specialty pharmacy."
AIM pioneered the integration of technology and clinical content for radiology management through the introduction of web-based prior authorization in 2002. This platform allows ordering physicians to directly submit information and receive real-time evaluation against widely accepted clinical guidelines through an easy-to-use interface.
AIM's web capabilities also help to improve quality and efficiency by facilitating information transfer between ordering physicians and rendering facilities to deliver a complete and correct understanding of the clinical order, helping to reduce potential waste and administrative burden caused by poor communication. AIM also introduced the first set of web-enabled tools to install cost and quality transparency into the selection of the best value in diagnostic imaging facilities.
Under the terms of the agreement, WellPoint will pay approximately $300 million in cash to acquire Imaging Management Holdings, the holding company parent of AIM, which is IMH's sole business. The acquisition is expected to close in the third quarter of 2007 subject to standard closing conditions and customary approvals required under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction will not have an impact on WellPoint's current earnings per share guidance for 2007.
About WellPoint, Inc.
WellPoint's mission is to improve the lives of the people it serves and the health of its communities. WellPoint, Inc. is the largest health benefits company in terms of commercial membership in the United States. Through its nationwide networks, the company delivers a number of leading health benefit solutions through a broad portfolio of integrated health care plans and related services, along with a wide range of specialty products such as life and disability insurance benefits, pharmacy benefit management, dental, vision, behavioral health benefit services, as well as long term care insurance and flexible spending accounts. Headquartered in Indianapolis, Indiana, WellPoint is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as Empire Blue Cross Blue Shield in 10 New York City metropolitan and surrounding counties and as Empire Blue Cross or Empire Blue Cross Blue Shield in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through UniCare. Additional information about WellPoint is available at www.wellpoint.com.
American Imaging Management, Inc. ("AIM") is a leading company in the radiology benefit management industry. AIM promotes the appropriate use of diagnostic imaging through the application of widely accepted clinical guidelines delivered through an innovative platform of technologies and programs. AIM pioneered the use of web technology in diagnostic imaging management and has continually integrated service and technology to create a more effective and efficient clinical review process to support the physician- patient relationship. Through a commitment to delivering excellence in clinical content, service, innovation and operational performance, AIM has developed a national client base of health plans, and currently provides management services to over 20 million health plan members. For more information on AIM, please visit www.americanimaging.net.
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LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information about WellPoint, Inc. ("WellPoint") that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of WellPoint, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the U.S. Securities and Exchange Commission ("SEC") made by WellPoint; trends in health care costs and utilization rates; our ability to secure sufficient premium rate increases; competitor pricing below market trends of increasing costs; increased government regulation of health benefits, managed care and pharmacy benefit management operations; risks and uncertainties regarding the Medicare Part D Prescription Drug benefits program, including potential uncollectability of receivables resulting from processing and/or verifying enrollment (including facilitated enrollment), inadequacy of underwriting assumptions, inability to receive and process information, uncollectability of premium from members, increased pharmaceutical costs, and the underlying seasonality of the business; significant acquisitions or divestitures by major competitors; introduction and utilization of new prescription drugs and technology; a downgrade in our financial strength ratings; litigation and investigations targeted at health benefits companies and our ability to resolve litigation and investigations within estimates; our ability to contract with providers consistent with past practice; other potential uses of cash in the future that present attractive alternatives to share repurchases; our ability to achieve expected synergies and operating efficiencies in the WellChoice, Inc. acquisition within the expected time frames or at all, and to successfully integrate our operations; our ability to meet expectations regarding repurchases of shares of our common stock; future bio-terrorist activity or other potential public health epidemics; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. WellPoint does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in WellPoint's various SEC reports, including but not limited to WellPoint's Annual Report on Form 10-K for the year ended December 31, 2006 and its Quarterly Reports on Form 10-Q for the reporting periods in 2007.
SOURCE WellPoint, Inc.
CONTACT: Media, James P. Kappel, +1-317-488-6400, or Investor Relations, Michael Kleinman, +1-317-488-6713, both of WellPoint