SPi acquires Laguna Medical Systems for $8.25 million

Sep 3 2009

SPi, a leading global business process outsourcing (BPO) company, today announced that it has acquired Laguna Medical Systems, Inc. (LMS) for an aggregate purchase price of US $8.25 million.

LMS has 50+ regionally-based consultants who assist more than 200 hospitals to achieve coding and billing compliance and to optimize entitled reimbursements for patient services. The 22-year-old company also offers Recovery Audit Contractor (RAC) defense and recovery services to help healthcare providers manage and defend RAC audits.

Peter Maquera, President and CEO of SPi, said, "As a result of the significant focus on healthcare reform in the US, we have been actively tracking companies in the coding compliance space with the goal of finding one to acquire whose corporate culture and values match our own. LMS fits the bill. Their capabilities nicely complement our existing medical transcription, billing and revenue cycle management services and provide an excellent, new entry point for us into this rapidly growing $25 billion industry." Maquera went on to say, "The inclusion of LMS's service offerings in our Healthcare portfolio allows us to strengthen our relationships with the more than 400 hospitals, multi-specialty clinics and physician practices that we currently serve, and it increases our Healthcare-specific employee base to more than 2,000 worldwide."

The US healthcare industry accounts for 16% of US GDP and is the largest segment in the US economy. With the US government now requiring healthcare providers to achieve a 95% or greater accuracy rate on medical coding, inexperienced healthcare providers with limited resources are expected to struggle to meet this requirement, enhancing growth opportunities for well-funded and managed service providers in the coding compliance consulting market. Add to this that the US government's RAC program is soon to expand from just hospitals to physicians in all states and the rationale for entering this coding marketplace becomes even stronger.

"SPi's acquisition of LMS is an excellent example of how we are executing on our strategic plan to accelerate growth and strengthen our position in the BPO arena," stated Ray C. Espinosa, President and CEO of ePLDT. Espinosa went on to say, "Recognizing the rapid and continued growth in the healthcare industry, we are committed to expanding our platform in this area and are delighted to be adding another annuity-based business to our overall BPO portfolio."

Mike Beninato, President and CEO of SPi's wholly-owned medical billing and revenue cycle management company, Springfield Service Corporation (SSC), said, "SSC's management team is equally pleased with the acquisition of LMS and looks forward to merging its service offerings with our own." He added, "As it is becoming increasingly important for healthcare providers to significantly improve their efficiency while simultaneously lowering their costs, LMS's coding, audit and compliance consulting services, along with the rest of SPi's offerings, provide a critical set of capabilities for organizations navigating their way through today's ever-changing healthcare landscape. We look forward to working with LMS to integrate its offerings with ours and to achieve continued growth and profitability together in the years ahead."