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Boca Raton, Fla. 

Peer Review To Raise $4M-$6M Via VC Or IPO

By Lorie Konish

7/18/2006--Peer Review Mediation and Arbitration Inc., which helps insurance companies recruit contract physicians for utilization review services, plans to raise between $4 million and $6 million in either a venture round or a small initial public offering, according to company Chief Executive Willis Hale.

"We have gotten a lot done and we're looking to get just the minimum that we need just to get to the next level," Hale said.

Founded in 2001, Peer Review has been funded up to this point by about $7 million in internal funding, according to Hale, both through management and the physicians the company employs.

Usually insurance companies have staff physicians who do utilization reviews. Through Peer Review's service, insurance providers would be able to outsource utilization reviews to physicians hired on a case by case basis to review specific cases based on their expertise.

"They can employ them only when they have more cases than their full time doctors can handle," said Hale.

Peer Review has been building services to provide access to the records of 17,000 medical practitioners, through a combination of a private networking application and the Internet. Peer Review provides a curriculum vitae of each practitioner, mostly board certified physicians, to help determine expertise.

Peer Review plans to use the funding for nationwide marketing, according to Hale. While its product has not hit the market, the company is in talks with several different insurance companies, he said. Whether the funding will be through venture investors or through a stock sale depends on the opportunity, he said. It wasn't clear which exchange the company would consider for such a small IPO.

"For us, it's more about the strategic value than it is about the money," Hale said, indicating that a venture funding would have to add something to the company.

"We'll do a secondary raise after this," Hale said. "That will probably be for our prior investors, the people who have had their money in the longest."

Based in Boca Raton, Fla., Peer Review also has an office in Austin, Texas. Peer Review directly employs about 20 employees.

Reach Peer Review at 561-347-1178.

©2006 Dow Jones & Company, Inc. All rights reserved.