Health insurer services vendor HMS Holdings will acquire claims review firm and Medicare Recovery Audit Contractor HealthDataInsights Inc. for $400 million. The companies expect the deal to close by year-end.

New York-based HMS provides a range of software and professional services to government and commercial insurers. Its government business includes Medicare, Medicaid and CHIP, state employee plans, child support agencies and military health. Its services include program integrity, eligibility and enrollment, customer service call centers and pharmacy cost avoidance, such as identifying and redirecting claims to liable third parties.

Las Vegas-based HealthDataInsights serves public and commercial insurers. The company uses data mining/analytics and database technologies to retrospectively analyze all of a payer's claims for fraud, abuse, waste or errors. HealthDataInsights reviews more than $300 billion in paid claims annually and is the Medicare RAC for Region D, encompassing 17 states and three territories.

The acquisition will accelerate HMS' strategy of investing in new but related products and markets, and extend its reach into commercial markets, says CEO Bill Lucia. HMS also expects HealthDataInsights to contribute about $85 million in revenue during 2012.

Andrea Benko will remain president and CEO at HealthDataInsights, which will become a wholly owned subsidiary of HMS. HealthDataInsights has about 400 employees at facilities in Nevada, California and Florida.


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