Quorum expects $50M annual boost from new revenue cycle deal

Quorum Health is outsourcing revenue cycle management services to R1 RCM, and the Brentwood, Tenn.-based company expects $50 million in annual EBITDA benefit from the deal by 2021.

On May 8, Quorum announced that it had tapped R1 RCM to provide end-to-end revenue cycle management services at its outpatient centers and 26 hospitals across 14 states. In a first-quarter earnings presentation on May 10, Quorum leaders said the contract with R1 RCM begins July 1, and they expect to be fully transitioned to R1 RCM's platform by the fourth quarter of this year. 

In 2019, Quorum expects to recognize $10 million in EBITDA benefit from both cost savings and revenue improvement from outsourcing revenue cycle functions. Quorum expects the EBITDA benefit to ramp up to $50 million annually by 2021, according to the earnings presentation.

Quorum, a spinoff of Franklin, Tenn.-based Community Health Systems, ended the first quarter of 2019 with a net loss of $39 million on revenues of $442.8 million. That's compared to the first quarter of last year, when the company recorded a net loss of $99 million on revenues of $486.8 million.

"During the first quarter, our team continued to execute on several key strategic goals," Quorum Health President and CEO Robert Fish said in an earnings release. "Our continued focus on cost management and the revenue cycle improvements from our new R1 partnership give me confidence that we will meet or exceed our previously stated 2019 goals."

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