UnitedHealth Group, the parent company of the largest U.S. health insurer, UnitedHealthcare, will purchase healthcare payments company Equian for around $3.2 billion, according to a report by The Wall Street Journal.
Equian, which is owned by New Mountain Capital, does payment processing operations for insurers and healthcare companies, and highlights its process for reducing overpayment mistakes.
The acquisition will probably see Equian merging into UnitedHealth’s Optum arm, a part of UnitedHealth’s business that serves healthcare-related companies. Equian will help Optum branch out farther than just healthcare, as Equian also serves other types of insurance.
UnitedHealth has a reputation for acquiring companies, and healthcare is a healthy sector in terms of mergers and acquisitions — second only to technology companies. Dealogic reported that more than $260 billion worth of deals in the sector have been announced up to now.
Equian came about from a merger between Trover Solutions and a predecessor company, following the acquisition of both companies by New Mountain in the year 2015. New Mountain bought Equian’s previous company for $225 million. The Equian platform, based in Indianapolis, works with upwards of $500 billion in health-related claims a year as well as nine of the 10 biggest payers in the industry. It analyzes claims pre- and post-payment to search for aberrations in the payments system.
The merger took a few months to complete. New Mountain, which is in New York, handles upwards of $20 billion has an investment history with a number of different healthcare, information and technology companies, including Signify Health and Ciox Health.
Earlier this month, patient records numbering around 11.9 million were compromised and exposed in a data breach of an agency that collects money for Quest Diagnostics and UnitedHealth Group.
Quest revealed the information in a securities filing. It stated that the American Medical Collection Agency (AMCA), which is based in Elmsford, New York, informed Quest on May 14 about the eight-month breach. Over that period of time, a hacker was privy to credit card numbers, bank accounts, Social Security numbers, medical information and other personal data. Quest said it stopped sending requests for collections to the AMCA and was cooperating with authorities and with UnitedHealth.