Hartford managed care provider Aetna Inc., flush with a first-quarter profit, is paying about $600 million for Prodigy Health Group, The Associated Press reports.
The privately held Prodigy administers self-funded health plans for small- to mid-size companies with between 100 and 5,000 employees. In self-funded plans, the employer pays the claims and assumes the risk.
The New York-based company operates in 15 states and has about 600,000 medical members.
Meanwhile, Aetna said its first-quarter profit rose 4 percent, as it became the fourth big health insurer in the past week to report better-than-expected earnings and raise its 2011 profit forecast.
It said health care costs fell and it recorded a $174 million gain in the quarter because claims left over from previous quarters came in below expectations due to lower-than-projected care use.
 The company’s share price, which has already risen about 30 percent so far this year, climbed another 5 percent, or $1.97, in morning trading to $41.78.
The insurer surprised analysts with another bigger-than-expected increase to its full-year earnings forecast. Aetna now expects 2011 adjusted earnings to range between $4.20 and $4.30 per share. That’s up from its forecast in February of between $3.70 and $3.80 per share and much higher than analyst expectations of $3.73 per share.
That February forecast also was much higher than what analysts were expecting at the time.
Aetna earned $586 million, or $1.50 per share, in the three months that ended March 31. That’s up from $562.6 million, or $1.28 per share, a year ago. Revenue fell 3 percent to $8.39 billion, as enrollment dropped 5 percent.
Adjusted earnings, which exclude one-time items, were $1.43 per share.
