Through the acquisition, R1 RCM expects to create a scaled leader in end-to-end revenue cycle management and technology-powered revenue intelligence
R1 RCM, a US-based provider of health technology solutions, has agreed to acquire Cloudmed, a revenue partner for healthcare providers, from New Mountain Capital in an all-stock deal worth around $4.1bn.
The consideration is inclusive of Cloudmed’s net debt of $857m.
Cloudmed, which is based in Atlanta, is said to partner with more than 3,100 healthcare providers in the US.
Its revenue intelligence platform is designed to identify opportunities for generating additional revenue to customers. For this, the platform combines cloud-based data architecture and domain expertise with intelligent automation to analyse huge volumes of medical records, payment data, and complex medical insurance models.
Last year, the company is claimed to have helped its clients recover over $1.5bn of underpaid or unidentified revenue.
In December 2021, Cloudmed acquired par8o, a healthcare technology company with specialisation in 340B and patient referral management technology.
Cloudmed CEO Lee Rivas said: “Cloudmed solves a critical problem in the healthcare system by helping healthcare providers get paid for the services they deliver.
“By combining with R1, we will be creating a best-in-class platform with market-leading capabilities to drive improved outcomes for our customers, among the leading healthcare providers in the country. R1 shares our values and focus on innovation, which is why we are so excited about joining them to drive value for healthcare providers.”
R1 RCM is engaged in offering technology-driven solutions aimed at transforming the patient experience and financial performance of health systems, hospitals, and medical groups.
Through the acquisition, the company expects to create a scaled leader in end-to-end revenue cycle management as well as technology-powered revenue intelligence.
The company said that Cloudmed brings to it revenue integrity capabilities with a focus on the middle revenue cycle. Together, the companies are expected to have improved offerings that unite decades of expertise across coding, charging, and reimbursement to fuel further client digitisation via automation and artificial intelligence (AI).
R1 RCM president and CEO Joe Flanagan said: “This transaction accelerates our strategy to build the most scalable, flexible, and integrated platform for the revenue cycle and consumer engagement in healthcare.
“Our combined solutions, including enhanced automation capabilities, will further transform the patient experience and drive continued improvement in our customers’ financial results.”
After the closing of the deal, existing R1 RCM’s shareholders will own around 70% of the combined firm, while Cloudmed’s equity holders will hold the remaining 30% stake.
The deal, which is subject to R1 RCM’s shareholders’ approval, regulatory approvals, and other customary conditions, is anticipated to close in Q2 2022.