Evolent Health, which offers a suite of advisory and technology services to support emerging accountable care organizations, particularly in Medicaid, is paying $145 million in cash and stock to get deeper into the market.

The company has entered a definitive agreement to buy technology vendor Valance Health, which also serves the Medicaid market and brings complementary services to increase scale, as well as new offerings, says Frank Williams, CEO at Evolent Health.

Together, the companies will serve 23 Medicaid agencies as well as integrated delivery systems getting into ACOs. Evolent Health offers analytics, data integration, predictive rules modeling, electronic health record optimization, a unified patient record, web apps to coordinate care and outsourced services. Evolent Health also can aid providers in negotiating payment arrangements with insurers and assist in ACO development for health plans and providers.

Valence Health brings to the table 10 of the Medicaid agencies as well as Medicaid TPA claims processing capability, advisory services covering value-based payments, quality measurement and cost and utilization metrics, along with 600,000 lives covered under its programs, according to Williams.

Valence also brings expertise in patient engagement of Medicaid clients including clinical programs that use claims, EHR, pharmacy, and biomedical data to risk stratify individuals and get the most acute patients into interventional clinical programs. Further, alerts placed in a provider’s electronic health record can flag patients who should be enrolled in an interventional program.

Williams expects new business coming from Valence Health will increase scale and client diversification, while accelerating Evolent’s financial break-even timeline in 2017 by one or two quarters.

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