Cerner Corp. sold its revenue cycle outsourcing business to a Chicago-based company. R1 RCM struck a deal on Tuesday to acquire Cerner’s RevWorks business, including its non-federal clients.
The deal was valued at $30 million in working capital and cash and is expected to close in the third quarter of this year, according to a Wednesday presentation made to R1’s investors.
RevWorks, which helps hospital clients manage billing and coding, would be integrated into R1’s EHR-agnostic revenue cycle platform. R1 expects the deal will bring it about $80 million in revenue across more than 150 customers and will expand its footprint. As part of the deal, Cerner will extend R1’s revenue cycle capabilities to existing clients and new prospects.
“We look forward to working collaboratively with Cerner to deliver superior results for healthcare providers and the communities they serve,” R1 executive vice president and chief commercial officer Gary Long said in a news release. “With our interoperable technology and end-to-end platform, we are well-positioned to serve Cerner’s customers, as well as other healthcare organizations across the country.”
Cerner’s revenue cycle business has struggled recently. It lost a major client earlier this year when Florida-based health system AdventHealth announced it would use competitor Epic for revenue cycle management. Last year, a report by KLAS showed 70% of clients that used Cerner’s revenue cycle outsourcing service wouldn’t buy it again.
In an emailed statement, Cerner said it “remains committed to and heavily invested in its revenue cycle solutions.”
This isn’t R1’s only recent acquisition. Earlier this year, the company bought scheduling and patient-access software provider SCI Solutions for $190 million.
R1 RCM’s stock jumped 9.7% on the news of the Cerner deal.
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