Emdeon acquires Chapin, better addressing hospital-based claims and payment recovery
Emdeon, a Nashville-based provider of healthcare revenue and payment cycle management solutions, announced this week the acquisition of Chapin Revenue Cycle Management of Tampa, Fla., a leading provider of hospital-based revenue cycle services, including accounts receivable management, medical denials, appeals and collection improvement initiatives.
The deal was valued at $18.9 million paid at closing, composed of $16.2 million in cash and $2.7 million in restricted shares of Emdeon Class A common stock, plus additional contingent payments totaling up to $8.1 million to be paid in additional restricted shares of Emdeon Class A common stock. The contingent payments will be paid based upon the attainment of financial performance objectives of the acquired business from the closing through the end of 2012.
Chapin utilizes a proprietary contract management system built specifically for rapid and precise calculations of reimbursement amounts from all types of healthcare payers and contract arrangements. By leveraging this technology and Chapin's extensive experience in outsourced hospital revenue cycle management services, Emdeon will offer an added service layer designed to enhance the financial performance of institutional healthcare providers across its broad network.
"Healthcare providers continue to face financial challenges associated with rising accounts receivable balances, inaccurate claim submissions and declining cash collections from unpaid or underpaid claims," said George Lazenby, Emdeon's CEO. "Our acquisition of Chapin will help Emdeon address these industry-wide problems and strengthen our already solid foundation in revenue cycle management solutions across the entire patient encounter."
In addition to expanding its service portfolio, the acquisition of Chapin further advances Emdeon's payment integrity initiatives focused on lowering administrative costs and improving accuracy in the billing and payment cycles of both payers and providers. The transaction also will strengthen Emdeon's ability to drive continued acceleration of the hospital revenue cycle where Emdeon already offers technology solutions including eligibility, claim submission, collection, posting, denial management and patient billing.
"Chapin operates as an extension of a provider's patient financial services staff focusing on specific revenue cycle issues in which providers historically lacked the tools or resources to adequately address," said Keith Henthorne, executive chairman for Chapin. "Enabling Chapin's solutions within the Emdeon network will help hospitals improve collections and their ability to cost effectively bill for and monitor complex contractual arrangements."