Pamplona Capital Management will pay $2.7 billion for MedAssets because it sees new opportunities by combining MedAssets’ large suite of revenue cycle management services with health information management vendor Precyse, which Pamplona already owns.

The combined companies will create an end-to-end HIM solutions vendor helping 2,700 clients manage $450 billion in annual patient revenue, say Jeremy Gelber, M.D., a partner at Pamplona.

The goal is to create one company with coding services and computer-assisted coding software, clinical documentation improvement services, and patient identity management and health information management expertise from Precyse, combined with back office revenue cycle solutions such as collections, contract management, charge capture, denials management, RAC audits and appeals, a claims clearinghouse, and analytics for managing accounts receivables and insurance contracts from MedAssets, Gelber says.

The transaction, Gelber adds, is based not on synergies but on strategic merits, with a long-term view to better support hospitals facing value-based reimbursement and increasing numbers of patients with high deductible health plans and difficulty in making payments.

Also See: Quality Systems, NextGen Move into the Cloud, Small Practice Markets

Following closure of the deal by the end of January, Pamplona will turn around and sell the Spend and Clinical Resource Management unit of MedAssets to VHA-UHC Alliance, for an undisclosed sum. This unit includes a group purchasing organization that will augment a similar service VHA already operates, as well as offer compliance advisory services and Sg2, a market insight and analytics consulting firm.

While important services, the parts being sold to VHA are not part of Pamplona’s plan to add MedAssets’ revenue cycle management business to the HIM business of Precyse, Gelber says.

The VHA-UHC Alliance is buying the Spend and Clinical Resource Management unit of MedAssets to boost its already formidable clinical and clinical improvement analytics capability as well as supply chain price performance analytics. Now with the Sg2 analytics technology and advisory services, the alliance can help providers better understand their market share, how to improve patient services, and where and how to partner with insurers in the market, says Byron Jobe, president of strategic growth and marketing.

For instance, the Spend and Clinical unit has more depth than VHA-UHC in capital management and contracted services, Jobe says. But VHA-UHC has deeper knowledge of physicians and their clinical preferences, such as using certain medical devices that are high-cost but not necessarily better. The combined entities can help hospitals get the best pricing while also helping physicians make more informed decisions around outcomes and utilization of devices.

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