Cognizant acquires TMG Health for an undisclosed amount

Acquisition expected strengthen BPaaS solution for govt and public health programmes

Cognizant has entered into a definitive agreement to purchase TMG Health for an undisclosed amount. TMG Health is a subsidiary of health insurance major Health Care Service Corporation (HCSC) and a business process services provider to healthcare firms in US. 

The transaction is expected to close in the third quarter of 2017, subject to satisfaction of the closing conditions, including regulatory reviews.

TMG's healthcare business and technology professionals will become employees of Cognizant post the deal. Cognizant expects the new acquisition would further expand its breadth of digital transformation solutions for healthcare payers and providers, in addition to its 2014 acquisition of healthcare technology provider TriZetto.

TMG Health will enter a new, expanded multi-year service agreement to continue providing information technology, business process and other services to HCSC's various operating units and subsidiaries, as part of the expansion of Cognizant's strategic relationship with HCSC.

TMG Health, an HCSC subsidiary since 2008 with offices in Pennsylvania and Texas, is a national provider of business process services to the Medicare Advantage, Medicare Part D and Managed Medicaid markets in the US, supporting 32 client plans and more than 4.3 million members in all 50 states.

The combination of capabilities from TMG Health, Cognizant's Digital Operations, and Digital Systems and Technology practises will further strengthen its scalable business process-as-a-service (BPaaS) solution for the government and public health program markets.

A BPaaS model provides insurers with a technology and operational foundation for the efficient management of their government lines of business, enabling them to focus on strategic growth at a predictable cost while aligning quality, standards, risk and compliance across their programs.

"Cognizant and TMG Health are an ideal strategic fit because we share similar priorities and values when it comes to helping clients deliver superior member-centric care, enable efficient claims processing and efficiently meet state and federal regulatory requirements," said Susan Rawlings Molina, President and CEO at TMG Health.

"Government business lines are expanding, and more payers, big and small, are entering the market. We believe there is a growing opportunity for our experienced teams to work together to help current and future clients succeed in highly regulated, cost- and compliance-driven markets."

"Cognizant's TriZetto Facets and QNXT healthcare claims and administration software and systems process more than 30 per cent of the nation's managed Medicare lives and over 60 per cent of the nation's managed Medicaid lives," said Kaushik Bhaumik, Executive Vice President and global head of healthcare at Cognizant. "The addition of TMG Health's capabilities and experts to our healthcare portfolio will enable all of our payer clients to embrace new digital opportunities with their growing government business lines, be more competitive and respond quickly to changes in these critical markets with increased efficiency from member enrollment through care management, under a predictable, cost-effective BPaaS model."

Andy Napoli, Senior Vice President and Chief Customer Service Officer of HCSC, "By joining forces in this way, Cognizant and TMG Health can combine their unique strengths to accelerate innovation across people, process and technology capabilities so that we can better serve members now and in the future."