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Firstsource acquires MedAssist Holding, Inc

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Announcement Mumbai
"Firstsource Solutions Ltd on August 29, 2007 has announced that it has entered into an agreement to acquire MedAssist Holding, Inc., a leading provider of revenue cycle management in the healthcare industry in the U.S. The acquisition is valued at US $330 million and is subject to the regulatory approval under the US HSR statute.
 
 
MedAssist, headquartered in Louisville, Kentucky has 1,400 employees and is a pan-American provider of revenue cycle management services to the healthcare industry. This includes Eligibility Services, Receivables Management Services and Post-default Collections services for healthcare providers. The Company has over 1,000 clients including hospitals, large physician groups and alternate site providers. MedAssist's revenue for year ended December 31, 2006 was US $99 million.
 
 
The MedAssist acquisition presents significant synergies for Firstsource. Firstsource, which already has a strong presence in the US healthcare BPO space on the payor side (insurance Company end) will now also enter the provider side (hospitals end) of healthcare BPO services. Currently, hospital care in the US amounts to approx. US $700 billion and administrative costs are estimated to be 14%, or US $100 billion, which is a huge opportunity. Revenue and cost pressure on healthcare providers is increasing. Hence, providers are increasingly outsourcing multiple elements of their revenue cycle to increase revenues (by reducing uncompensated care) and contain cost. MedAssist's capabilities provide Firstsource with a pan-American presence in this provider segment, consisting of over 5,000 hospitals nation-wide.
 
 
Commenting on the acquisition Ananda Mukerji, Managing Director & CEO, Firstsource said, "The healthcare space in the US is a tremendously attractive market from a BPO perspective. Firstsource already has a significant presence in the payor side of the market. This acquisition gives us access to the equally large provider side. MedAssist has an attractive portfolio of service offerings, an excellent customer base and a strong management team. We see significant opportunity to grow our business in the segment by cross-selling Firstsource's services to MedAssist's customers."
 
 
Firstsource's current clients in the healthcare industry include three "Fortune 100" US healthcare insurance Companies. Firstsource provides end-to-end services, including mail and document management services, policy administration, claims processing, claims pricing, claims adjudication, and adjustment, and healthcare provider database maintenance. Its key strengths within the healthcare sector are end-to-end services, proprietary platforms and deep domain expertise. Income from services to healthcare clients represented 13.7% of Firstsource's revenues for quarter ended June 30, 2007.
 
 
Firstsource stated that there would be no change in the management of MedAssist and all employees would continue in their current jobs."
 
 

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First Published: Aug 29 2007 | 12:00 AM IST

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