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UnitedHealth to buy A-Life Medical

by Brendon Nafziger, DOTmed News Associate Editor | September 22, 2010
UnitedHealth's subsidiary Ingenix said Tuesday it would buy medical-coding services company A-Life Medical Inc. for an undisclosed amount.

The purchase makes the sixth this year for the Eden Prairie, Minn.-based Ingenix, and the fourth of a company that helps providers cut costs.

UnitedHealth Group Inc., the country's largest insurer, said it was interested in moving beyond health plans to help the market control rising costs, according to a Bloomberg report.

"Combining A-Life Medical with Ingenix is an extension of our strategic alliance that enables deeper integration of our complementary technologies to create more powerful coding solutions for our clients," Bill Miller, executive vice president of health care delivery solutions at Ingenix, said in prepared remarks. "Even as the volume of medical claims grows, health care providers face increasing pressure to reduce administrative costs."

The company said the purchase of San Diego-based A-Life Medical, which has around 40,000 physician customers, would allow them to offer products to help doctors comply with new coding requirements set to take effect in 2013. By October of that year, the Centers for Medicare and Medicaid Services will require all health care organizations to switch to ICD-10. The switch from ICD-9 requires an order of magnitude more codes, UnitedHealth said.

According to Inc.'s company profile of A-Life Medical, the 14-year-old business's 2009 sales were around $17.1 million. The company has witnessed three-year growth of 95 percent, Inc. said.

UnitedHealth's stock rose around half a percent to reach $35.49 a share in recent trading on the New York Stock Exchange.