News in brief - Nov. 10, 2003

Medco income goes up - Former McKesson official pleads guilty - WebMD acquires Medifax-EDI - MGMA, ACC forge partnership

Medco income goes up

Medco Health Solutions Inc., one of the country's largest pharmacy benefit managers, reported income of $100.3 million in the third quarter of 2003, an 11.2% increase over the same period last year. That translates into earnings of 37 cents a share, a jump from the 33 cents per share the firm reported last year in the same period.

Medco, based in Franklin Lakes, N.J., also saw about a 6% increase in revenues, from $8 billion during the third quarter of 2003 to $8.5 billion during the same period this year. The company projected full-year earnings to range from $1.53 to $1.56 per share in 2003, and from $1.75 to $1.86 per share in 2004. Medco spun off of Merck & Co. in August. On Sept. 29, the U.S. Attorney in Philadelphia filed a civil complaint against Medco, accusing some of the company's pharmacy centers of canceling and destroying patients' mail-order prescriptions and either switching patients to Merck medicines, or switching them to drugs from companies with whom Medco got rebates. Medco is denying the charges.

Former McKesson official pleads guilty

Albert Bergonzi, a former president of HBO & Co., and a former executive vice president at McKesson Corp. last month pled guilty in a California federal court to securities fraud charges related to McKesson's purchase of HBOC in 1999.

Bergonzi is one of at least half-a dozen former senior HBOC officials who have either pled guilty or been charged with securities fraud that wiped out $9 billion off the value of McKesson shortly after the San Francisco-based company merged with HBOC, then a health care information technology company in Atlanta.

As part of the plea agreement, Bergonzi admitted falsifying earnings reports by overstating revenue figures and backdating contracts in 1998 and 1999, making HBOC a more attractive target for McKesson. Bergonzi also has agreed to cooperate in return for prosecutors dropping several charges against him, according to The Associated Press. He faces a maximum of 15 years in prison.

WebMD acquires Medifax-EDI

WebMD Corp. has agreed to acquire Medifax-EDI Inc., Nashville, Tenn., for about $280 million, including the assumption of certain liabilities. Medifax-EDI is claims clearinghouse that specializes in offering real-time eligibility verification services to physician groups, hospitals and other providers. WebMD expects to close the purchase by Dec. 1.

MGMA, ACC forge partnership

The Medical Group Management Assn. and American College of Cardiology have agreed to provide education and practice management tools to cardiology practices across the country, the organizations announced.

The tools will include audio conferences, books and survey reports and will focus on business issues as they relate specifically to cardiologists.