Hospitalist staffing firm and post-acute-care provider IPC Healthcare announced a spike in net revenue for the quarter ended Sept. 30, as the company prepares to become part of TeamHealth this year.
North Hollywood, Calif.-based IPC said its net revenue spiked 8% over the same period last year. Patient encounters, however, rose 14% over the same time period in 2014. The company reported that the end of Medicaid parity payments at the end of 2014 and the exit of some contracted facilities caused the difference between revenue growth and encounter growth.
But net income margin shrank to 1.9% during the third quarter this year, down from 5% during the same period last year. Overall, IPC saw $3.6 million in net income on $184.8 million in revenue for the three-months ended Sept. 30, compared with $8.6 million in net income on $169.8 million the prior year.
Meanwhile, the company saw $18.8 million in net income on $549.6 million in revenue for the nine months ended Sept. 30, compared with $24.5 million in net income $514.7 million over the same period last year.
TeamHealth is expected to acquire IPC for $1.6 billion by the end of the year. IPC said a stockholder vote is scheduled for Nov. 16.
“We believe the combination of our two physician-centric organizations will be transformative to the healthcare delivery system,” Dr. Adam Singer, CEO of IPC, said in the earnings report.
However, the proposed merger with TeamHealth did contribute to rising general and administrative expenses, IPC said. For the third quarter, expenses rose 39.1% over the same time period last year, and IPC said it incurred $5.3 million of transaction costs associated with the TeamHealth merger.
Also, IPC was slapped with a $1.7 million charge related to False Claims Act litigation.
Without those costs, IPC said its expenses would have risen 17.4%, or $4 million over the prior year's quarter. The $4 million financed the continuing growth of operations and new administrative costs due to the company's participation in Medicare's Bundled Payment Care Improvement incentive program, which began July 1.