Medical cost manager on acquisition binge

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An Indianapolis health care management business has acquired its third company since January and plans to grow to become the largest company in its industry.

Financed by a Connecticut private equity firm, Health Systems International this week announced it had bought Bridgeway Medical LLC, a Montgomery, Ala., company that reviews and audits medical bills for other companies.

“We’re looking for how that company is going to fit,” said CEO Russ Sherlock said. “Size is not an issue.”

In April, Health Systems absorbed Bass & Babb Cos. The Des Moines company also helps client companies cut medical costs and reviews workers’ compensation expenses.

In January, Health Systems bought Asert Benefit Services Inc., a Miami company that specialized in reviewing bills for medical claims of at least $100,000.

Health Systems doesn’t disclose acquisition prices or revenue figures. However, Sherlock said sales have quadrupled since late last year.

Including the 2005 acquisition of Hall Health Inc., a San Diego company focused on helping maritime companies cut health care costs, Health Systems has broadened its employee base to 260 from 40 just four years ago.

Health Systems has financial support to digest large deals, Sherlock said, because it is backed by Great Point Partners, a private equity firm in Greenwich, Conn., with $900 million under management.

Great Point recapitalized the company in November last year, taking majority control but including Sherlock and five other managers as shareholders.

Health Systems resulted from the 2004 merger of Intercontinental Corp., an Indianapolis bill review and medical cost manager for travelers and expatriates, and Health Data Services Inc., which provided preferred provider organization repricing for insurers and third-party administrators.

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