Lansdale, Pa.-based Consolidated Services Group Inc., a providerof property and casualty medical claims management services, saidit has acquired CHN Solutions for $16 million.

CSG, a privately held regional firm, which services the autoliability, general liability and workers' compensation industries,bought the Hamilton, N.J.-based firm from Selective Insurance GroupInc.

CHN Solutions provides comprehensive URAC-Accredited preferredprovider organization and managed care programs.

CSG said the cash deal doubles the size of the company toapproximately $60 million in annual revenues and weds two regionalproviders to deliver greater breadth of services through aproprietary integration technology platform--Medlogix.

CSG said it has about 225 employees and the firm it is acquiringhas about 200 personnel.

The acquisition, CSG said, is financed by CapitalSource FinanceLLC, Md., and will enable the firm to marshal a portfolio ofservices that it can customize to client needs.

"Adding CHN Solutions to our family will benefit our customers,the CHN PPO and all of our employees," said Michael Morrone,president and CEO of CSG. "Now we can deliver a more efficientcomprehensive service package to customers...."

Mr. Morrone forecasted that the combined business plan of thetwo companies "will be an unbeatable combination. It has alwaysbeen my credo to 'position our company for success.' This willpresent options for growth and advancement to employees within alarger, more diverse company."

Len Weinman, president and CEO of CHN Solutions, is now seniorvice president of CSG. "We anticipate a smooth transition as wejoin forces with CSG," he said.

According to James Coleman, executive vice president ofSelective's Diversified Insurance Services, his firm will remain aclient of the new company with a multi-year contract and, "We lookforward to an ongoing client relationship with CSG and believe thistransition is positive for both companies."

The new company, known as Consolidated Services Group, willcomprise CSG's complete portfolio of services (including CRC andMedPath) and the full complement of CHN Solutions offerings(including Northeast Health Direct), delivered through itsintegration technology platform, Medlogix.

CSG said its proprietary technology bridges the communicationgap between payers and providers and creates a seamless, Web-basedplatform through which all processes flow through one integratedsystem.

The technology was developed to satisfy the regulations of NewJersey, New York and Pennsylvania--states with some of theindustry's most complex rules. In creating Medlogix, CSG engineereda highly adaptable platform that can easily accommodate the needsof nearly any other state or genre. Keeping with its mission, CSGcontinues to deliver on the promise of value.