HMS Holdings (HMS), Las Colinas, Texas, has announced a definitive agreement to acquire privately held Medicare Recovery Audit Contractor (RAC) HealthDataInsights (HDI), Las Vegas, Nevada, for approximately $400 million. The transaction is not contingent upon financing and is expected to close by December 31, 2011, subject to regulatory approvals.
HDI is the exclusive RAC in 17 states and three U.S. territories (CMS Region D), covering approximately 22 percent of all Medicare claims in the nation. According to the Centers for Medicare & Medicaid Services (CMS) fiscal year (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 percent of the total dollars collected by all four Medicare RACs, and reviewed more than $300 billion in paid claims last year.
After applying HMS’ revenue recognition methodology, HDI is projected to contribute approximately $85 million of revenue to HMS in 2012.
“We believe this acquisition aligns perfectly with our long-term plan and is significantly positive for HMS and all our stakeholders,” said Bill Lucia, HMS chief executive officer.
