Health Management Associates signs a five-year medical transcription services contract with Transcend

Sep 11 2009

TRANSCEND SERVICES, INC. (NASDAQ: TRCR), the third largest provider of medical transcription services to the U.S. healthcare market, announced today that it has entered into a five-year single-source contract to provide medical transcription services to Health Management Associates, Inc. (NYSE: HMA) (“HMA”).

Prior to signing this agreement, Transcend had individual contracts with approximately 45 of HMA’s 56 hospitals. The new agreement expands the existing relationship between Transcend and HMA to include HMA’s hospitals which are currently using other transcription service providers. These hospitals will be transitioned to Transcend over a six-month period starting on October 1^st. In addition, any future hospitals acquired or managed by HMA will transition to Transcend as soon as practicable. HMA’s hospitals also have approximately 80 transcriptionists who will be offered the opportunity to join the Transcend team on or about October 1^st. Transcend expects the incremental impact of the new agreement to be accretive to annual diluted earnings per share by approximately $.04 once the new hospital implementations are complete.

Sue McGrogan, Transcend’s President and Chief Operating Officer commented: “HMA has been a key partner for many years beginning with the relationship we developed with them at Medical Dictation Inc. (“MDI”) prior to MDI’s acquisition by Transcend in 2005. Since then, HMA and Transcend have expanded the relationship by adding hospitals and migrating most of HMA’s hospitals to our BeyondTXT platform. We are now formalizing this relationship at the HMA corporate level, which allows us to deliver our services consistently across HMA’s entire base of current and future hospitals.”

Larry Gerdes, Transcend’s Chief Executive Officer, added: “This agreement is illustrative of the expansion of Transcend’s capabilities as we increasingly serve the portion of the market that makes decisions encompassing the needs of entire hospital systems. We could not be happier with this relationship and we look forward to growing and deepening it over the years to come.”