The combination of Bedminster-based Zelis and St. Louis, Missouri-based RedCard will create the health care industry’s first payments optimization platform to price, pay and explain claims with an enterprise scale on a claim-by-claim basis, they said.
The new company will be led by Doug Klinger, serving as CEO, and Joe DiMartini and Eric Schaefer, serving in senior executive roles. The company will keep its existing locations and teams in Bedminster; St. Louis; Clearwater, Florida; Atlanta, Georgia; and Overland Park, Kansas.
Once combined, the pair will serve more than 700 payer clients and 600,000 providers.
“The key focus of this combination is to deliver deeper electronic penetration, best-in-class claim cost savings performance and a transformational billing and payments experience, all for the benefit of payers, providers and consumers,” Klinger, who currently serves as CEO of Zelis, said. “Zelis and RedCard have both been disrupting the industry status quo, and we are thrilled to join forces to bring leading-edge payment optimization technology and solutions to our clients and the market broadly.”
The deal was supported by Parthenon Capital, Bain Capital Private Equity and Bain Capital Ventures. Existing shareholders of Zelis and RedCard will retain significant ownership positions in the new company, they said.
“The combined company’s payment optimization solution combines the three critical activities along the payment value chain: the payment data platform or software ‘brain’ to manage and communicate payment data, a highly attractive payment network and payment execution technology, and proprietary processes and expertise to organize every step required to efficiently and effectively take a complete payment file from start to finish,” DiMartini, chairman of RedCard, said. “RedCard has worked in partnership with Zelis for many years with many clients, and we are ecstatic to be formally joining forces to change the future of our industry.”
The deal is expected to close in the third quarter of 2019. Financial terms were not disclosed.