HMS Holdings Acquires Medicare Region D RAC for $400M

HMS Holdings announced a definitive agreement to acquire HealthDataInsights, the Medicare recovery audit contractor for CMS Region D, for $400 million, according to an HMS news release.

HDI identifies and recoups improper payments for the 17-state region and covers approximately 22 percent of all Medicare claims, according to the release. In CMS' fiscal year 2010 report, it also showed that HDI accounted for 47 percent of the total dollars corrected by all four Medicare RACs. HMS is one of the biggest players for Medicaid RAC contracts, as eight states have already chosen HMS as their Medicaid RAC.


HMS CEO Bill Lucia said in the release that the "HMS/HDI combination will create the nation's premier provider of improper payment identification services for federal, state and commercial health benefit programs."

The $400-million transaction will consist of $384 million in cash and the rest in unvested options. It is expected to close by Dec. 31.

Related Articles on RACs:

Are RACs Performing Enough Provider Outreach?
17 States With Finalized Medicaid RAC Contracts
CMS: Medicare RACs Identify $75M in Overpayments in FY 2010

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