UnitedHealth Group’s (NYSE: UNH) health information technology subsidiary Ingenix has reached an agreement to acquire a Pennsylvania-based compliance consulting company for hospitals.
Ingenix didn’t disclose the price for Newton Square, Pennsylvania-based Executive Health Resources in a statement, but a Bloomberg report last week put the figure at about $1.5 billion.
The deal fits with UnitedHealth’s strategy of beefing up its service business as its core health insurance business faces continuing pressure to hold downs costs, which is likely to hurt profitability. The Executive Health Resources acquisition marks UnitedHealth’s fifth acquisition this year of a closely held company outside its insurance unit. Last month, Ingenix reached a deal for health IT firm Picis.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Executive Health Resources helps hospitals manage what it calls “medical-necessity compliance requirements,” which essentially means ensuring that hospitals have completed the proper documentation to show that patients actually need the medical services the hospital is providing.
Laws require that hospitals and health systems perform compliance reviews for patients covered by Medicare and Medicaid, according to the statement.
Executive Health Resources has 1,100 U.S. hospital and health system clients.
