Acquisition to provide healthcare payers access to comprehensive medical cost containment audit and recovery services
NASHVILLE, Tenn., May 3, 2011 /PRNewswire/ -- Emdeon Inc. (NYSE: EM), a leading provider of healthcare revenue and payment cycle management and clinical information exchange solutions, today announced the acquisition of EquiClaim, a leading provider of healthcare audit and recovery services for commercial and government payers, from MultiPlan, Inc.
The acquisition of EquiClaim's post-payment audit and recovery services will enhance Emdeon's Payment Integrity Solutions by enabling Emdeon to offer healthcare payers a more comprehensive suite of prospective and retrospective payment integrity solutions. EquiClaim's solutions are designed to provide credible and objective technology-enabled audit and recovery services for payers to help ensure appropriate payment in a collaborative manner with providers.
"Our acquisition of EquiClaim represents another significant step in Emdeon's strategy to offer comprehensive payment integrity solutions to the healthcare marketplace," said George Lazenby, chief executive officer for Emdeon. "EquiClaim's leading capabilities give Emdeon additional tools to help our payer customers resolve payment issues arising from the increasing complexities of their provider contracts, reimbursement methodologies and claim payment policies. Emdeon now has the capability to provide end-to-end prospective and retrospective Payment Integrity Solutions, as well as professional consulting services, to help drive efficiencies and improve cash flows. While these solutions are valuable and important today, we anticipate the need for these services to increase as complexities in medical billing and coding rise with the pending conversion from ICD-9 to ICD-10."
According to the Centers for Medicare and Medicaid Services (CMS), the estimated cost to the healthcare industry of the mandated regulatory changes in claims coding from current ICD-9 codes to the new ICD-10 codes will be over $1 billion and could initially increase the complexity and number of claims rejected for improper coding by approximately 10%. Complex claims can require increased retrospective medical review by staff members with clinical expertise, as well as analysis by those with a high proficiency in billing and contract management. The addition of EquiClaim's capabilities to Emdeon's Payment Integrity Solutions will provide Emdeon's payer customers with additional tools and expertise to help meet this regulatory-driven challenge, and also further positions Emdeon to broadly assist its government and commercial customers' initiatives to promote cost-effective healthcare and reduce fraud, waste and abuse.
"Emdeon's central position in the claim adjudication workflow allows it to focus on preventing errors as early as possible within the claims adjudication process and is highly complementary to EquiClaim's services," said Kurt Anderson, executive vice president and chief operating officer for EquiClaim. "We help our customers catch errors that have slipped through the cracks without impacting the payment cycle through our post-payment audit and recovery services. When paired with Emdeon's pre-adjudication solutions, payer customers will have access to a robust scope of options to control the waste associated with improper payments."
EquiClaim also has expertise as one of the first subcontractors for CMS's Recovery Audit Contractors (RAC) program. The RAC program was introduced by CMS in 2005 and is scheduled to roll out to the state Medicaid programs this year under Section 6411 of the Patient Protection and Affordable Care Act. The RAC program is a cost-containment effort aimed at reducing improper payments within the Medicare and Medicaid programs, as well as identifying process improvements to reduce or eliminate future improper payments.
Consideration for the transaction was approximately $41 million in cash paid by Emdeon at closing.
Emdeon is a leading provider of revenue and payment cycle management and clinical information exchange solutions, connecting payers, providers and patients in the U.S. healthcare system. Emdeon's product and service offerings integrate and automate key business and administrative functions of its payer and provider customers throughout the patient encounter. Through the use of Emdeon's comprehensive suite of products and services, which are designed to easily integrate with existing technology infrastructures, customers are able to improve efficiency, reduce costs, increase cash flow and more efficiently manage the complex revenue and payment cycle and clinical information exchange processes. For more information, visit www.emdeon.com.
Statements made in this press release that express Emdeon's or management's intentions, plans, beliefs, expectations or predictions of future events are forward-looking statements, which Emdeon intends to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. Such statements include statements regarding the future performance of the acquired business and the anticipated impact of healthcare regulatory changes. Forward-looking statements also may include information concerning Emdeon's possible or assumed future results of operations, including descriptions of Emdeon's revenues, profitability and outlook and its overall business strategy. You should not place undue reliance on these statements because they are subject to numerous uncertainties and factors relating to Emdeon's operations and business environment, all of which are difficult to predict and many of which are beyond Emdeon's control. Although Emdeon believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Emdeon's actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements, including the risks discussed in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and elsewhere in Emdeon's Annual Report on Form 10-K for the year ended December 31, 2010, as well as Emdeon's periodic and other reports, filed with the Securities and Exchange Commission.
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