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ISO acquires DxCG, a leading provider of predictive modeling software for the Healthcare Industry

DxCG-ISO

JERSEY CITY, N.J., May 11, 2004 — ISO announced today that it has acquired DxCG®, Inc., a Boston-based provider of analytical software solutions that promote fair and efficient health care. With DxCG’s sophisticated solutions, customers more accurately evaluate, plan, and budget health care management programs. Mirus Capital Advisors represented DxCG and its shareholders.  Terms were not disclosed.

DxCG uses medical and pharmacy claims information to predict health care costs and utilization in order to support health plans, providers, and employers as they perform actuarial analyses, structure disease management approaches, manage provider networks, and identify members for care and case management programs. The foundations of the DxCG RiskSmartTM software suite are DxCG’s Diagnostic Cost Groups (DCG) and RxGroups® predictive models, which are based on more than 15 years of scientific research. DxCG models are used by more than 175 clients to allocate more than $70 billion of health care costs annually. Since 2000, DxCG has provided the exclusive predictive modeling methodology used by the federal government to determine reimbursement rates to providers and health plans participating in the Medicare Advantage program.

“We are thrilled to become a part of the ISO family,” said Marilyn Schlein Kramer, president and chief executive officer of DxCG. “ISO has a long history in managing insurance claims databases and delivering sophisticated analytics. ISO’s substantial technical resources, financial strength, and commitment to the continued development of DxCG predictive methods and applications will significantly strengthen our ability to serve our customers and support our rapid expansion in the market,” said Kramer.

Frank J. Coyne, ISO’s chairman, president and chief executive officer, said, “We were drawn to DxCG because their models are firmly rooted in sound medical science and represent the most credible predictive methodologies available in the health care market.

“As the leading provider of data and analytics to the property/casualty insurance industry, we are always looking for innovative ways to assist our customers,” said Coyne. “We will continue to help health care payors deliver quality patient care while maximizing cost efficiencies, as we explore exciting new applications for DxCG’s predictive models, including those within the property/casualty market.”

DxCG will continue operating from its Boston offices, led by cofounders Arlene Ash and Randall Ellis and the existing management team, under Kramer. Both Coyne and Kramer stressed the transition to ISO ownership would be seamless to existing DxCG customers.

About DxCG

DxCG promotes fair and efficient health care by providing software solutions to more accurately plan, budget and evaluate health care management programs. DxCG has more than 175 clients. The company’s Diagnostic Cost Groups (DCG) and RxGroups® predictive models are used to negotiate health-based payments, identify opportunities for disease management, profile physicians and evaluate managed-care programs. Recognized by leading independent researchers as the most proven models available, DxCG’s methodologies are used by the federal government to set payment rates for the Medicare Advantage program.

About ISO

ISO is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. Professionals use ISO’s databases and services to classify and evaluate a variety of risks and detect potential fraud accurately. In the U.S. and around the world, ISO’s services help customers protect people, property and financial assets. For more information about ISO, visit www.iso.com.

About Mirus Capital Advisors

Mirus Capital Advisors, Inc. provides investment banking solutions to middle market corporations in targeted technology, manufacturing, and service industries. The firm’s services include merger advisory, private equity raising, and valuation services for entrepreneurs, corporations, and professional financial investors. Additional information about the firm is available at www.merger.com.

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