Two private specialty-benefit management companies have completed a merger, creating a combined entity with about $1.5 billion in annual revenue.
CareCore National and MedSolutions finalized the merger last week and now operate as CareCore-MedSolutions. Both companies work with health insurers and other managed-care groups such as state governments to provide healthcare cost-management services such as prior authorization for imaging, cardiology and other service lines that tend to result in costly patient claims.
MedSolutions also is working with several hospitals and health systems that are participating in CMS' Bundled Payments for Care Improvement initiative, a program that dishes out lump-sum payments to providers for specific episodes of care. MedSolutions has contracts with Knoxville, Tenn.-based Covenant Health, Franklin, Tenn.-based Iasis Healthcare and several Tenet Healthcare Corp. hospitals for the post-acute model.
Financial terms of the deal were not disclosed. John Arlotta, CEO of CareCore, will take over the top spot of the combined company. MedSolutions CEO Curt Thorne is retiring.
Several private-equity firms own Franklin, Tenn.-based MedSolutions, and CareCore, headquartered in Bluffton, S.C. The merger could spell increased competition for Magellan Health, one of the largest health-benefits intermediaries in the country that has struggled this year.
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