Premier, Inc.’s Subsidiary Contigo Health, LLC, to Acquire Contracts With 900,000 Providers and Licenses to Cost Containment Technology
07 September 2022 - 7:21AM
Business Wire
The acquisition will support Contigo Health’s
continued growth by expanding its nationwide footprint and
enhancing the value proposition for direct-to-employer
offerings
Premier, Inc. (NASDAQ: PINC) subsidiary Contigo Health, LLC, a
provider of comprehensive services that optimize employee health
benefits, today announced an agreement to acquire key assets from
TRPN Direct Pay, Inc. and Devon Health, Inc. (collectively, TRPN)
for $177.5 million in cash. Acquired assets will include contracts
with more than 900,000 providers across 4.1 million U.S. locations,
including acute care hospitals, surgery centers, physicians,
ancillary facilities, MRI centers, laboratories, radiology centers,
urgent care clinics, home health services, durable medical
equipment suppliers, chiropractors, physical therapists and mental
health practitioners. Under the terms of the agreement, Contigo
Health also will license TRPN’s proprietary cost containment
technology.
Contigo Health, which collaborates directly with self-funded
employer health plans and health systems to improve employee access
to high-quality healthcare, plans to leverage the acquired TRPN
assets to develop the provider contracts into a new out-of-network
wrap product named Contigo Health® ConfigureNet™. This new product
is expected to complement and help grow Contigo Health’s health
plan administration products, improving access to quality
healthcare and reducing the cost of medical claims through
pre-negotiated discounts with its network providers. Claims will be
aligned to the network provider’s contracted rate through an
electronic data interchange to help ensure a rapid and seamless
process for health plans and providers alike.
“Premier is committed to high-quality, low-cost care for the
millions of people receiving health coverage from their employers,”
said Michael J. Alkire, President and CEO of Premier. “The
acquisition of these assets, which offer market-leading pricing, is
expected to accelerate Contigo Health’s ability to serve additional
self-funded employer health plans across the country. With an
expanded footprint, Contigo Health will be better positioned to
improve employee health and engagement, all with more predictable
and controlled costs. At the same time, we believe the resulting
wrap product will further differentiate Premier members and other
health systems as high-value care networks for employers.”
“Contigo Health is relentlessly focused on optimizing care
through innovative models and collaborations between health systems
and employers,” said Steven Nelson, President of Contigo Health.
“We anticipate this acquisition will help bridge the gap between
quality care and geographic constraints and allow self-funded
employer health plans to manage costs while offering more
flexibility to their employee plan participants.”
Expected Benefits of Transaction
When combined with Contigo Health’s high-touch, personalized
approach to third-party health plan administration products, the
Contigo Health® ConfigureNet™ out-of-network wrap will provide key
capabilities that are expected to enhance Contigo Health’s value
proposition.
Benefits of the transaction are expected to include:
- Increased provider access: A national wrap-network
solution is a competitive differentiator that is expected to
accelerate Contigo Health’s ability to expand its current
offerings, including Contigo Health Sync Health Plan™ third-party
administration products and Contigo Health Sync Health Plan™
business process outsourcing for self-funded employer health
plans.
- Better management of out-of-network claims: Additional
provider contract assets will enable Contigo Health to offer
solutions to help self-funded employer health plans manage
out-of-network claims with a differentiated, transparent approach
to cost and quality for employers, employees and healthcare
providers.
- More flexibility to employers: With the acquisition of
these key assets, Contigo Heath plans to create additional and
customized wrap network product options to meet the emerging needs
of self-funded employer health plans.
Transaction Details
The transaction is expected to close in the second quarter of
fiscal 2023, subject to customary closing conditions and regulatory
clearance under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
Premier currently anticipates the transaction to generate
adjusted earnings per share accretion of $0.01 to $0.02 in fiscal
2023. In addition, the company expects the transaction to result in
$40 million to $60 million in incremental annual net revenue and
contribute 40 percent to 50 percent in adjusted EBITDA margin once
fully scaled in the next three to five years.
Forward-looking statements
Statements made in this release that are not statements of
historical or current facts, such as those related to Contigo
Health, LLC’s ability to expand its product offerings and offer
increased access to high-quality care and improved employee
engagement, the additional expected benefits of the transaction
include increased provider access, better management of
out-of-network claims and increased flexibility to employers, the
anticipated timing of the closing of the transaction and the
expected benefit to Premier’s adjusted fully diluted earnings per
share in fiscal year 2023 are “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Premier to be materially
different from historical results or from any future results or
projections expressed or implied by such forward-looking
statements. Accordingly, readers should not place undue reliance on
any forward-looking statements. In addition to statements that
explicitly describe such risks and uncertainties, readers are urged
to consider statements in the conditional or future tenses or that
include terms such as “believes,” “belief,” “expects,” “estimates,”
“intends,” “anticipates” or “plans” to be uncertain and
forward-looking. Forward-looking statements may include comments as
to Premier’s beliefs and expectations as to future events and
trends affecting its business and are necessarily subject to
uncertainties, many of which are outside Premier’s control. More
information on potential factors that could affect Premier’s
financial results is included from time to time in the “Cautionary
Note Regarding Forward-Looking Statements,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of Premier’s periodic and current
filings with the SEC. Forward-looking statements speak only as of
the date they are made, and Premier undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information or future events that occur after
that date, or otherwise.
About Premier, Inc.
Premier, Inc. (NASDAQ: PINC) is a leading healthcare improvement
company, uniting an alliance of more than 4,400 U.S. hospitals and
health systems and approximately 250,000 other providers and
organizations to transform healthcare. With integrated data and
analytics, collaboratives, supply chain solutions, and consulting
and other services, Premier enables better care and outcomes at a
lower cost. Premier plays a critical role in the rapidly evolving
healthcare industry, collaborating with members to co-develop
long-term innovations that reinvent and improve the way care is
delivered to patients nationwide. Headquartered in Charlotte, N.C.,
Premier is passionate about transforming American healthcare.
Please visit Premier’s news and investor sites on
www.premierinc.com; as well as Twitter, Facebook, LinkedIn,
YouTube, Instagram and Premier’s blog for more information about
the company.
About Contigo Health, LLC
Contigo Health, LLC, a subsidiary of Premier, Inc., creates new
ways for clinicians, health systems and employers to work together
to optimize employee health benefits. With over 3.9 million
eligible members, Contigo Health® products include Sync Health Plan
Administration TPA, Sync Health Plan BPO, and ECEN Passport (COE).
These quality programs support a common goal for all stakeholders
to increase access to high-quality care, enhance employee
engagement, control costs and get employees back to work and life
faster. For more information, please visit www.contigohealth.com as
well as LinkedIn, YouTube and Twitter.
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version on businesswire.com: https://www.businesswire.com/news/home/20220906006085/en/
Media Contact: Public_Relations@premierinc.com
Investor Contacts: Angie McCabe Vice President, Investor
Relations Angie_McCabe@premierinc.com
Ben Krasinski Director, Investor Relations
Ben_Krasinski@premierinc.com
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