HMS Holdings Corp. to Acquire Leading Medicare Recovery Audit Contractor HealthDataInsights, Inc. for $400 Million
finance.yahoo.com
HDI, a technology-enabled healthcare services company whose mission is to ensure claims integrity, identifies and recoups improper payments for health plans and government payers. Applying rules approved by the Centers for Medicare & Medicaid Services (CMS) and commercial health plan clients to identify fraud, waste and abuse, HDI reviewed more than $300 billion in paid claims last year. HDI is the exclusive Medicare Recovery Audit Contractor (RAC) in 17 states and three U.S. territories (CMS Region D), covering approximately 22% of all Medicare claims in the nation. According to CMS’s FY 2010 Report to Congress on the “Implementation of Recovery Auditing at the Centers for Medicare & Medicaid Services,” HDI’s efforts in Region D accounted for 47% of the total dollars corrected by all four Medicare RACs.
After applying HMS’s revenue recognition methodology, HDI is projected to contribute approximately $85 million of revenue to HMS in 2012. “HDI is one of the few strategic opportunities we have seen with revenue growth rates and profitability comparable to our own,” said Bill Lucia, HMS’s Chief Executive Officer.
“We believe this acquisition aligns perfectly with our long-term plan and is significantly positive for HMS and all our stakeholders,” added Lucia. “The HMS/HDI combination will create the nation’s premier provider of improper payment identification services for Federal, State, and commercial health benefit programs.”
Lucia added, “We expect that HDI’s assets will accelerate our multi-year strategy of investing in new but related products and markets, and program integrity in particular. As the Medicare RAC with the highest recoveries and highest accuracy scores, HDI has best-in-class processes and technology, purpose-built for recovery auditing. Like HMS, HDI’s services are primarily offered on a contingency-fee basis. In addition to expanding our Medicare business, the acquisition of HDI will provide us with expertise we can leverage in our state Medicaid RAC business.”
“The acquisition of HDI will also extend our reach into the commercial health plan market, and in addition, provides us with an opportunity to expand service offerings to our existing Medicaid managed care plan clients. As the government programs we serve continue to shift lives to managed care, HMS and HDI together provide a compelling solution for health plans seeking claims integrity and cost containment services.” |
