HMS Holdings Corp. (the “Company” or “HMS”) (NASDAQ:HMSY), a
leading provider of coordination of benefits, payment integrity and
member health management solutions for payers, has completed the
previously announced acquisition of Eliza Corporation (“Eliza”).
The cash purchase price of approximately $172 million was funded
with available liquidity, consisting of approximately 75% cash on
hand and 25% from the Company’s existing credit line. The addition
of Eliza is currently expected to add approximately $35 million to
2017 Company revenue and be accretive to current year earnings. An
update to other aspects of full year 2017 guidance as a result of
the acquisition will be provided on the Company’s 1Q’17 earnings
conference call.
Eliza is a cloud-based platform which provides
comprehensive and personalized outreach and health engagement
solutions to improve quality of care and clinical outcomes. It
utilizes sophisticated communication techniques and proprietary
predictive analytics, behavioral science and data-driven design
methodologies to achieve targeted outcomes for customers and their
members.
Eliza has 70+ customers, including eight of the
top ten health plans in the U.S. Their health engagement analytics
and services successfully integrate proprietary data assets, a deep
understanding of the healthcare consumer, and multi-channel
outreach and technology to deliver desired results for health
plans, PBMs, home health agencies and disease management companies.
The Eliza solution suite helps target gaps in care and provides
tools to pursue appropriate condition management; raise quality
scores; improve cost savings; and increase wellness, preventative
care, medication adherence, member satisfaction and retention. For
additional information, see: http://www.elizacorp.com.
“We view member outreach and engagement as a
natural extension of the work we have done historically, and an
opportunity to leverage both the Essette care management platform
we acquired last fall and the data assets and analytics we have
built over the years in the cost-containment arena,” said Bill
Lucia, HMS Chairman and CEO. “We also know our customers want to
deal with fewer service providers for a variety of reasons,
including to reduce the risk of data breaches and the abrasion
associated with hiring multiple vendors for member interactions.
With our existing HiTrust certification, we expect there will be
heightened interest in the combined solutions we can now offer
for coordination of benefits (COB), payment integrity (PI), health
management and patient engagement – all services impacting both
costs and revenue for risk-bearing entities.”
“We enthusiastically welcome the Eliza team into
the HMS family and look forward to taking advantage of our newly
acquired capabilities, which enhance our capacity to bend the
healthcare cost curve on behalf of customers,” added Lucia.
“Effective member outreach and engagement are
tools applicable across the entire HMS customer base - from
commercial at-risk and ASO populations to those in Medicare and
Medicaid. Eliza has built best-in-class solutions designed to
deliver a consistent consumer experience - utilizing digital design
to personalize content, motivate members, drive ideal behaviors and
reduce costs. We have consistently found that mastering the
intricacies of engaging consumers is key to improving health
outcomes and reducing expenditures, particularly for the 5% of the
population that account for roughly 50% of healthcare spending,”
said John Shagoury, Eliza President and CEO.
“This acquisition represents a significant
broadening of the total addressable market for HMS services, as we
add to our capacity to assist customers with solutions they can
utilize to better manage the health of their members. We believe
this broader suite of services, to be sold as part of a third
business vertical established with the acquisition of Essette, is a
natural complement to our core COB and PI product offerings and
will increase opportunities to cross-sell into our expansive
customer base. We are also expanding that base, as a meaningful
portion of Eliza revenue is generated from PBMs. Our initial sales
focus will be commercial health plans and provider owned plans, but
we expect there will be interest in the Essette and Eliza product
suite from our state customers as well,” said Jeff Sherman, HMS
CFO.
About HMS
HMS Holdings Corp., through its subsidiaries,
provides coordination of benefits, payment integrity, and health
management and engagement solutions for payers. HMS serves state
Medicaid programs; commercial health plans, including Medicaid
managed care, Medicare Advantage and group and individual health
lines of business; federal government health agencies, including
the Centers for Medicare & Medicaid Services and the Veterans
Health Administration; government and private employers; child
support agencies; and other healthcare payers and sponsors. As a
result of HMS’s services, customers recover billions of dollars
annually and save billions more through the prevention of improper
payments.
Safe Harbor Statement
This press release contains "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such statements reflect our current
expectations, projections and assumptions about our financial
results, business, the economy and future events or conditions.
They do not relate strictly to historical or current facts.
Forward‐looking statements can be identified by words such as
“aims,” “anticipates,” “believes,” “estimates,” “expects,”
“forecasts,” “intends,” “likely,” “may,” “plans,” “projects,”
“seeks,” “targets,” “will,” “would,” “could,” “should,” and similar
expressions and references to guidance, although some
forward-looking statements may be expressed differently. In
particular, these include statements relating to future actions,
business plans, objectives and prospects, future operating or
financial performance. Factors or events that could cause actual
results to differ may emerge from time to time and are difficult to
predict. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate,
actual results may differ materially from past results and those
anticipated, estimated or projected. We caution you not to place
undue reliance upon any of these forward-looking
statements.
Factors that could cause or contribute to such
differences, include, but are not limited to: our ability to
execute our business plans or growth strategy; our failure to
innovate, develop or implement new or enhanced solutions or
services; the nature of investment and acquisition opportunities we
are pursuing, and the successful execution of such investments and
acquisitions; our ability to successfully integrate acquired
businesses (including Eliza) and realize synergies; variations in
our results of operations; our failure to accurately forecast the
revenue under our contracts and solutions; our ability to protect
our systems from damage, interruption or breach, and to maintain
effective information and technology systems and networks; our
failure to protect our intellectual property rights, proprietary
technology, information processes, and know-how; significant
competition for our solutions and services; our failure to maintain
a high level of customer retention or the unexpected reduction in
scope or termination of key contracts with major customers;
customer dissatisfaction, our non-compliance with contractual
provisions or regulatory requirements; our failure to meet
performance standards triggering significant costs or liabilities
under our contracts; our inability to manage our relationships with
information and data sources and suppliers; reliance on
subcontractors and other third party providers and parties to
perform services; our ability to continue to secure contracts and
favorable contract terms through the competitive bidding process
and to prevail in protests or challenges to contract awards;
pending or threatened litigation; unfavorable outcomes in legal
proceedings; our success in attracting qualified employees and
members of our management team; our ability to generate sufficient
cash to cover our interest and principal payments under our credit
facility or to borrow or use credit; unexpected changes in our
effective tax rates; unanticipated increases in the number or
amount of claims for which we are self-insured; changes in the U.S.
healthcare environment or healthcare financing system, including
regulatory, budgetary or political actions that affect procurement
practices and healthcare spending; our failure to comply with
applicable laws and regulations governing individual privacy and
information security or to protect such information from theft and
misuse; negative results of government or customer reviews, audits
or investigations; state or federal limitations related to
outsourcing or certain government programs or functions;
restrictions on bidding or performing certain work due to perceived
conflicts of interests; the market price of our common stock and
lack of dividend payments; and anti-takeover provisions in our
corporate governance documents; and other factors, risks and
uncertainties described in our most recent Annual Report on Form
10-K and in our other filings with the Securities and Exchange
Commission. Any forward-looking statements are made as of the date
of this press release. Except as may be required by law, we
disclaim any obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise.
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Francesca Marraro
VP, Marketing and Communications
fmarraro@hms.com
201-927-7055
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