Revenue Cycle Review, an initiative by Novistra Capital, is a curated report to keep you updated about the Revenue Cycle Management (RCM) Industry. In this edition we bring you latest news & developments, along with select M&A transactions for the first nine months of 2022.

The RCM industry was valued at~$243.1 billion in 2021 and is projected to expand at a sharp compound annual growth rate (CAGR) of 11.6% between 2022 and 2030. Rapidly evolving digitalization of healthcare, coupled with the large quantity of multiple data sets and unorganized workflows in healthcare settings is driving the demand for advanced RCM solutions. In the last one year, high US inflation, further exacerbated by rising wages and costs, has shifted healthcare leaders’ focus towards cost efficiency. As a result, healthcare organizations are investing in software and back-end systems, with RCM becoming a top investment priority. Also, market trends indicate that RCM is expected to take up a significant share of provider investment budgets over the next year.

Health systems are executing eletronic processing for claims, coding, and reimbursements and rising healthcare expenditures are turning industry participants, from payers to providers, to adjust, by accepting value-centric reimbursement structures. Moreover, organizations continue to invest in Cloud, Artificial Intelligence (AI), Machine Learning (ML) and automation to simplify their processes, manage costs, and accelerate growth. We expect investment in advanced technologies to drive revenue opportunities for the industry.

The RCM industry witnessed strong M&A and private placement activity throughout 2022, including large ticket transactions such as Cerner’s takeover by Oracle and Change Healthcare’s acquisition by UnitedHealth Group-owned Optum. Strategic buyers pursued acquisitions to expand presence and augment their services while PE-backed players continued platform and bolt-on acquisitions to solidify their digital healthcare offerings. We expect favourable industry tailwinds to drive the M&A market in the near term.


Legislators float bill to extend and expand telehealth

The US Congress passed the Telehealth Extension Act of 2021 that would extend and expand access to telehealth services in the Medicare Program while imposing certain requirements for high-cost services. The Act would remove geographic and site constraints on Medicare enrollees’ access to approved telemedicine services and would provide clarity, certainty, and a framework for developing a telemedicine system that increases access, protects patient choice, and includes fundamental fraud and exploitation precautions. Additionally, the Act would create a 2-year extension of the COVID-19 emergency telehealth waiver, permitting new types of providers to supply telehealth, including audio-only options. Telehealth services will also be available to federally certified health centres, rural health clinics, Indian Health Service (IHS), and Native Hawaiian Health Care Systems.

Finally, in the event of a disaster, the bill gives the CMS broad discretion to authorize further telehealth flexibility. The Act received support from more than 15 organizations, including key leaders across the healthcare community, and already has 30 bipartisan cosponsors.

Optimizing financial clearance is priority during the pandemic

Financial clearance, including patient identity verification and eligibility checking, has helped both providers and patients to overcome operational challenges during the pandemic. It has increased revenue from both payer and provider by ensuring data accuracy to prevent denials, identifying those patients that are likely to pay, and connecting patients who need financial assistance with the proper programs. Organizations need to follow three important practices to ensure that patients can quickly obtain maximum funding with minimal effort:

(i) Screen every patient for eligibility – identify self-pay or uninsured patients and screen them as soon as possible;

(ii) Utilize automation to identify funding sources – enter patient response data into an automated program able to identify and submit applications, increasing efficiently;

(iii) Monitor performance metrics – review performance metrics in real time, make adjustments, and implement ongoing improvements to ensure that patients receive funding and that healthcare organizations are reimbursed in a timely manner. If followed correctly, optimizing financial clearance can be a strategic advantage for driving improved revenue metrics, market share, and patient loyalty.


Migration to cloud-based RCM boosting technology spending

Cloud-based technology spending is becoming increasingly necessary in the US healthcare industry as it allows organizations to move from in-house, high-cost infrastructure maintenance to a “pay-for-what-you-use” model. With flexible and scalable capabilities, health clouds reduce IT complexity and decrease costs while enhancing resource utilization and service delivery. By 2024, healthcare organizations are projected to spend an estimated $50bn on technology investments, with cloud driving much of that expense. The global market for cloud technology in healthcare is expected to grow by more than $25bn between 2020 and 2024.

While adopting a cloud server can save organizations from purchasing costly infrastructure in the future, front-end cost such as PaaS platform deployment and IT managed services can get expensive. Therefore, it is critical to weigh the short-term expenditures against the long-term ROI for cloud migration. Before migrating to the cloud, it is important to review all unforeseen costs, as the total cost paid for cloud services should cover customer satisfaction, performance data security, and compliance.

Value-based payment models leading to better care quality

According to a recent Humana study of Medicare Advantage (MA) members, MA patients receiving value-based care received better overall health outcomes, as well as lower costs and more preventative care. The report found that 67% of Humana’s individual MA members sought care from primary care physicians in value-based agreements, considering that, as of December 31, 2021, about 67,800 primary care physicians had value-based contracts with Humana. A vast majority of Humana ‘s MA members (approx. 90% of 4.6mn members), had at least one chronic condition, while approx. 83% had at least two chronic conditions. Humana pointed to these statistics as evidence that value-based frameworks are appropriate for these populations, given that the care model is more focused on prevention.

Humana’s value-based proposition achieved an estimated medical cost savings of 13.4%, compared to volume-based Medicare. Preventative care helped lower the usage of acute care services, and value-based physicians reduced avoidable hospitalizations by 11% over their fee-for-service counterparts.






Optum, a diversified health services company and a subsidiary of UnitedHealth Group, completed the acquisition of US-based Change Healthcare for $13 billion. Previously traded on Nasdaq, Change provides software and technology-driven solutions to improve clinical, financial, administrative, and patient engagement solutions in the US healthcare system. While the transaction was announced in 2021, it received approval from the US Department of Justice only in H2 2022.

The Change acquisition is seen as a move by UnitedHealth and Optum to bolster the Group’s efforts to improve health outcomes and population health. Both Change and Optum share a vision for achieving a more intelligent and adaptive health system by simplifying and connecting the core clinical, administrative and payment processes healthcare providers and payers depend on to serve patients. Change would join with Optum’s “OptumInsight” unit to provide software and data analytics, technology-enabled services; and research, advisory and revenue cycle management offerings.

National Medical Billing Services (National Medical), a leading RCM company serving the surgical market, with backing from Aquiline Capital Partners, acquired California-based Medtek LLC. Founded in 2001, Medtek is a provider of revenue cycle solutions to Ambulatory Surgery Centers (ASC), hospitals, clinics and specialty groups in the US. Financial details of the transaction was not disclosed.

This acquisition will further enhance National Medical’s position as the complete end-to-end provider of outsourced revenue cycle solutions serving ASCs, surgical practices, and anesthesia groups.It also marks National Medical’s fourth transaction since its Jan 2021 buyout by Aquiline Capital Partners. MedTek brings ASC-specific medical transcription, surgical coding, and related revenue cycle software and services, which are complementary to National Medical’s existing portfolio and the combination will be able to further enhance their client’s financial profile by improving the working capital position and maximizing reimbursements.


Veritas Capital, a private equity firm focused on technology and healthcare, completed the bolt-on acquisition of two complementary revenue cycle management businesses: Coronis Health and Miramed Global Services. Coronis is a leading provider of end-to-end revenue cycle management solutions to US healthcare providers and Miramed on the other hand, delivers medical, coding, billing, and receivable management solutions to regional anesthesia focused physician practices and other commercial healthcare clients. Financial details of the transaction was not disclosed.

Leveraging Veritas’ expertise in healthcare technology, the combination will bring together two highly complementary businesses, with a shared mission to improve operations for healthcare providers. Moreover, Coronis’ end-to-end RCM solutions paired with MiraMed’s expertise and global infrastructure creates a robust platform for growth in a highly fragmented market.

Nasdaq traded healthcare solutions company, Computer Programs and Systems, Inc. (CPSI) completed the acquisition of Washington-based revenue cycle management solutions provider, Healthcare Resource Group (HRG), through its subsidiary TruBridge. Founded in 1994, HRG has grown into a national recognized provider of customized healthcare revenue cycle management solutions serving approximately 400 employees, serving 77 healthcare clients, primarily located in the Pacific Northwest and Southwest, including academic medical centers, tribal organizations, and independent 200+ bed hospitals. Financial details of the transaction was not disclosed.

The combination of HRG and TruBridge will more effectively address the growing demand from healthcare organizations to outsource revenue cycle operation and the workforce of both the companies will team up with a shared commitment to fulfill this demand. HRG is a great strategic fit for CPSI, and the transaction supports the company’s goal to complete accretive acquisitions complementing its growth strategy with a stable client base and high mix of recurring revenues.



Financial data provided by compny filings and PitchBook as of 30 Sep 2022
(2) Calculated as Market Value plus total debt, non-controlling interest and preferred stock, less cash & equivalents.
(3) Converted from GBP to USD at an exchange rate of 1.2
(4) Definitive Healthcare EBITDA multiple removed from average calculation


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