Ingenix buys compliance consulting firm for undisclosed sum

UnitedHealth Group’s (NYSE: UNH) health information technology subsidiary Ingenix has reached an agreement to acquire a Pennsylvania-based compliance consulting company for hospitals.

Ingenix didn’t disclose the price for Newton Square, Pennsylvania-based Executive Health Resources in a statement, but a Bloomberg report last week put the figure at about $1.5 billion.

The deal fits with UnitedHealth’s strategy of beefing up its service business as its core health insurance business faces continuing pressure to hold downs costs, which is likely to hurt profitability. The Executive Health Resources acquisition marks UnitedHealth’s fifth acquisition this year of a closely held company outside its insurance unit. Last month, Ingenix reached a deal for health IT firm Picis.

Executive Health Resources helps hospitals manage what it calls “medical-necessity compliance requirements,” which essentially means ensuring that hospitals have completed the proper documentation to show that patients actually need the medical services the hospital is providing.

Laws require that hospitals and health systems perform compliance reviews for patients covered by Medicare and Medicaid, according to the statement.

Executive Health Resources has 1,100 U.S. hospital and health system clients.