Intelenet to acquire a U.S. firm in $30 Million
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Mumbai: In order to address the healthcare records conversion industry, Intelenet Global Solutions plans to buy a U.S. based firm with capabilities in healthcare records processing and IT. Earlier this year, Intelenet, which is controlled by private equity firm Blackstone, won a $300-million contract from one of Blackstone's portfolio firms in the healthcare business. The acquisition is likely to be $25-$30 million, and will be its fourth if it goes through. Its earlier acquisitions of Travelport and Upstream BPO helped it to diversify into the travel domain, while its acquisition of Sparsh BPO helped it to diversify into domestic outsourcing. The latest acquisition will boost its efforts to diversify into the U.S. healthcare market. Intelenet, which was a joint venture between Barclays and HDFC till the management-led buyout by Blackstone, predominantly earned revenues from financial services clients. Sandeep Aggarwal, Intelenet Executive Vice President, confirmed that his company is seeking to grow through acquisitions. "We expect a huge opportunity from the conversion of U.S. healthcare records from the ICD-9 (International Statistical Classification of Diseases-9) to ICD-10 format and other codes like the HIPPA (Health Insurance Portability and Accountability Act) and family medical procedural codes," said Aggarwal. The ICD-9, which has approximately 11,000 classifications, is set to move to the ICD-10 format, which has around 68,000 classifications, by 2012. This will involve changes both to the systems of healthcare providers, ancillaries and payers. "Some part of this conversion will involve technology, but a large part will be manual. A majority of providers and payers will move to this standard by 2012 and a wrong classification could result in under-invoicing or over-invoicing," said Suresh Ramani, U.S. Head of Sales, Intelenet. Europe and some parts of Asia, such as Singapore, Japan and Australia, have already moved to ICD-10. U.S. healthcare reforms, providing for universal insurance access to all citizens, are also expected to drive pressure to cut costs and move towards higher outsourcing. Healthcare records are still manual and involve reading details from a scanned image of the prescription and interpreting them under the new classification. Intelenet expects to add close to 5,000 seats by December 2010 to service the U.S. healthcare market. Each seat accounts for about $20,000 in annual revenues.

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