Bill review vendor Stratacare announced the closing of their financing deal this morning. An investment group led by long-term industry veteran Paul Glover now owns a majority stake in the company; SV Life Sciences and Beecken Petty O’Keefe are the private equity firms behind the deal.
Sources indicate the deal is for a majority stake, but significant equity has been retained by the original owners.
Stratacare’s bill review customers tend to be mid-tier and smaller payers; the company’s application has strong auto-adjudication capabilities and was one of the first to integrate the ODG treatment guidelines, essential to processing medical bills in Texas. Most clients utilize their hosted services, although a few have loaded the Stratacare application on their own hardware.
Bill review companies have long been at the mercy of big network vendors who could, and have, altered the terms of their network rental arrangements at will. Stratacare and giant Coventry battled over price increases last year with Stratacare eventually paying significantly higher access fees.
Stratacare will be the foundation of a significantly expanded work comp managed care firm. Expect Stratacare, under new chairman Glover, to rapidly expand into the network business; network rental fees are often a major contributor to bill review company profits and represent a significant growth opportunity for the company. Sources indicate Stratacare is evaluating several initial market opportunities with initial focus likely on Texas, where the larger networks are having challenges meeting payers’ needs.
More details to follow: I have a query into Stratacare.
For now, off to the NCCI annual conference…
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