Emdeon Buys The Sentinel Group

Emdeon Inc., a Nashville, Tenn.-based provider of revenue cycle management services for healthcare providers, has acquired The Sentinel Group, a Lake Forrest, Ill.-based provider of healthcare fraud and abuse management services. No financial terms were disclosed for the deal, which closed on June 5. Emdeon is in registration for an IPO, and is backed by General Atlantic and Hellman & Friedman.

PRESS RELEASE

Emdeon, a leader in revenue and payment cycle management solutions, today announced the implementation of its first major customer following the recent acquisition of The Sentinel Group. The Sentinel Group, a recognized leader in healthcare fraud and abuse management services, was acquired by Emdeon on June 5, 2009.

The Sentinel Group acquisition expanded Emdeon’s portfolio of offerings to help identify potential financial risks much earlier in the claims administration cycle and create efficiencies and cost savings for both payers and providers. Emdeon’s network connects 1,200 government and commercial payers, 500,000 providers, 5,000 hospitals, 81,000 dentists and 55,000 pharmacies. Leveraging the breadth and scale of its network, Emdeon drives consistent workflow, information exchange and risk management services for healthcare providers and payers. Integrating fraud and abuse detection logic within Emdeon’s existing network should make earlier detection possible within the revenue cycle while streamlining delivery of non-affected claims.

“Emdeon can now offer a myriad of solutions with a custom fit for each specific client,” said Kelli Garvanian, Emdeon’s vice president for fraud and abuse. “Furthermore, the in-stream nature of fraud and abuse detection logic, coupled with Emdeon’s existing electronic transaction network, allows for seamless implementation with virtually no additional infrastructure investments required by our payer customers,” Garvanian explained.

Within days of the acquisition, Emdeon began offering expanded solutions to its customers and recently completed the implementation of fraud and abuse services with its first major existing customer, the insurance subsidiaries of the Texas-based HealthMarkets Companies, providers of individual health insurance plans. Integrated with existing services such as claims processing and payment distribution, the addition of Sentinel’s fraud and abuse solutions provides the HealthMarkets Companies with a robust solution that helps detect fraudulent activity before processing the claims.

Emdeon’s pre-processing capabilities, coupled with the rapid in-stream implementation, required virtually no resource investment by HealthMarkets. This approach is expected to yield immediate benefits to HealthMarkets and its insurance subsidiaries in combating fraud, waste and abuse, which is a problem experts estimate costs the healthcare industry more than $70 billion per year.

“HealthMarkets was evaluating the fraud and abuse vendor market for several months prior to Emdeon’s acquisition of The Sentinel Group,” said John Hunter, senior vice president of operations at HealthMarkets. “Given our long-standing contractual relationship, Emdeon became an obvious choice to provide HealthMarkets with fraud, waste and abuse services. Within 30 days of the initial discussions, Emdeon conducted an impact analysis to estimate savings and implemented a custom solution to fit our needs,” he said.

“Emdeon is helping to create an efficient, expedient and transparent payment reimbursement process,” said Gary Stuart, executive vice president of payer services at Emdeon. “More importantly, we are attempting to lead the healthcare industry in a paradigm shift away from the antiquated pay-and-chase method and towards a straightforward pre-payment approach. Everyone wins when payments are made in an accurate and timely manner, without inefficient and unnecessary back-end rework,” Stuart said.

About Emdeon

Emdeon is a leading provider of revenue and payment cycle management 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 process. For more information, visit www.emdeon.com.

About HealthMarkets

HealthMarkets(R) is the brand name for products underwritten and issued by the insurance subsidiaries of HealthMarkets, Inc. — The Chesapeake Life Insurance Company(R), Mid-West National Life Insurance Company of Tennessee(sm) and The MEGA Life and Health Insurance Company(sm). Products provided under the HealthMarkets brand are designed to provide personalized protection to individuals, families and the self-employed. For further information regarding products offered by the HealthMarkets’ Companies, visit www.healthmarkets.com. The administrative offices of HealthMarkets, Inc. and its underwriting companies are located in North Richland Hills, Texas. Products are marketed through independent agents in sales offices across the country. For more information about the HealthMarkets Companies visit www.healthmarketsinc.com.