Welcome to our newest issue! The healthcare payments capital markets were on vacation along with the rest of us, and then they weren't - many deals to cover in this issue and some sizable transactions reported to be in the works. We also bring you a look into how ICHRAs, LSAs and HPAs are reshaping workplace perks and benefits.
A reminder that we will be in Nashville from October 1-3. Please reach out if you would like to meet up while we're in town. We'd love to see you. You can email us here.
DEAL NEWS
EQT acquires majority of GeBBS Healthcare
Swedish investor EQT announced on September 9 that it is acquiring a controlling interest in GeBBS from ChrysCapital. Reports put the amount at over $850 million. GeBBS, founded in 2005, is headquartered in Los Angeles and provides revenue cycle management services to U.S.-based healthcare providers. The company has 13,000 employees in India, the Dominican Republic, Philippines and the U.S.
New Mountain Capital creates new payments platform
After failing to win the bidding war for R1 RCM, which will be taken private by TowerBrook and CD&R in an $8.9 billion deal, New Mountain Capital announced it has combined The Rawlings Group, Apixio’s Payment Integrity (PI) business, and VARIS together to create a new company focused on payment accuracy and proactive identification of errors to drive savings for health plans.
The firm's press release lists "subrogation, coordination of benefits, pharmacy payment integrity, and complex claim solutions" as capabilities of the new company. As part of the transaction, Apixio’s Connected Care platform and value-based care solutions were acquired by Datavant.
San Francisco-based Candid Health announced that it has raised $29 million in Series B funding. The round was led by 8VC with participation from previous investors including First Round Capital and BoxGroup. Candid Health bills itself as a revenue cycle automation platform. The company streamlines and simplifies the full cycle of claims management, focusing on submitting accurate claims from the start that achieve first pass resolution and net collection rates of 95-99%.
Milwaukee-based HPS/PayMedix announced that it has acquired TempoPay, which helps employees access medical, dental, pharmacy, and other expenses not paid by their insurance. TempoPay uses interest-free financing and a Visa card to give employees the ability to pay for medical and dental care, drugs, optical needs, vet bills, and other approved health and wellness-related costs not covered by their plans. Financial terms were not disclosed.
New York-based Nirvana, a four-year old company leveraging AI to automate insurance eligibility checks and cost share estimates, just raised a $24.2M Series A round led by Northzone. Additional investors include Inspired Capital, Eniac Ventures, and Surface Ventures. Nirvana’s model is continuously updated and adapted to the unique situations of different medical specialties based on millions of monthly eligibility checks.
Flex, which offers a solution for direct-to-consumer health and wellness brands to begin accepting HSA and FSA payments online, announced a $3.2M seed round from Y Combinator, SV Angel, Precursor, Liquid 2 Ventures, among others. San Francisco-based Flex describes itself as operating like Stripe for HSA/ FSAs. According to its press release, "At the heart of the Flex platform is a sophisticated API that enables the company to swiftly check item eligibility and then process payment for those eligible items."
Thatch raises large Series A to help employees adopt ICHRAs
Related to our deep dive on new approaches to workplace benefits, below, a startup just raised significant funding to help drive ICHRA adoption. Thatch, founded in 2023, closed a $38 million Series A led by General Catalyst and Index Ventures. New investors SemperVirens and The General Partnership joined the round. Existing investors Andreessen Horowitz and Avid Ventures participated as well.
Thatch is paid by employers to simplify the work that employees have to do to pick their own plan in the ICHRA model.
Several sharp eyed and well-informed readers told us after our last issue that we had pegged Salucro's value quite a bit higher than what it actually traded for. While we had estimated $40-45 million as U.S. Bank's purchase price, our sources tell us that Salucro was burning cash and actually sold in the "high teens". So - we stand corrected and will revise our estimated Salucro deal value to $15-20 million.
Thanks to those who alerted us, and we are happy to print corrections when we miss the mark on something!
DEAL RUMBLINGS
We became aware from the HISTalk Blog recently of two deals that would be significant if they move forward:
Bain Capital and Parthenon Capital are considering selling a minority stake in payments company Zelis that would value the company at $17 billion (read more)
While EQT has picked up a new health IT asset with GeBBS, it is apparently also evaluating strategic options for its AGS Health revenue cycle management company (read more)
DEAL DILIGENCE: HGP WHITE PAPER
Huge shout out to the HISTalk Blog for surfacing an insightful white paper from the team at Healthcare Growth Partners. HGP is a great source for information and data related to healthcare deals. The firm often publishes content that others would keep for clients or simply not make available outside the firm. This white paper summarizes learnings from 140 lower to middle market health IT deals that HGP has completed. It looks at 50+ due diligence topics "across six core due diligence categories and contains representative examples of potential pitfalls, opportunities, and preparation strategies for these matters." Well worth your time if you or your team might be engaging in a potential investment transaction, liquidity event, or acquisition!
THE BENEFIT REVOLUTION:
How ICHRAs, LSAs, and HPAs are Reshaping Workplace Perks and Benefits
Mid-September is an underrated gem, offering a perfect blend of summer's warmth and autumn's crispness. With crowds thinning and kids back in school, it's an ideal time for peaceful getaways and outdoor activities. Interestingly, it's also the time of year when many employers start to unveil next year's benefits packages, making it a season of both natural beauty and a time of important life planning and budgeting.
Gone are the days when a one-size-fits-all health insurance plan was the pinnacle of employee benefits. Today, we're witnessing a seismic shift in the world of workplace benefits perks, with Individual Coverage Health Reimbursement Arrangements (ICHRAs), Lifestyle Spending Accounts (LSAs), and Healthcare Payment Accounts (HPAs) leading the charge. The pendulum has moved to a more market-flexible equilibrium where employers, both small and large firms, are offering their employees more freedom to select the healthcare benefits and perks that work for them. It's as if the benefits world decided to trade in its trusty flip phone for a shiny new smartphone—and both employers and employees might be on the verge of reaping the rewards.
Let's start with ICHRAs, the cool kids on the benefits block. These arrangements have seen a 29% increase in adoption from 2023 to 2024. It's like they're the new avocado toast of the HR world—everyone wants a slice. And why wouldn't they? ICHRAs allow employers to offer a monthly allowance for employees to buy their own health insurance. It's like giving your staff a healthcare shopping spree, minus the chaos of Black Friday.
But wait, there's more! Enter LSAs, the Swiss Army knife of benefits. These flexible accounts let employees spend on everything from gym memberships to mental health support. It's like giving your staff a magic wand to wave at their wellness woes. And employers aren't complaining either—LSAs can lead to significant cost savings. One company, Bright Health, saved over $250,000 annually due to unused LSA funds. That's enough to buy a lot of office coffee—or better yet, invest in more employee perks.
Not to be outdone, HPAs are making waves too. These no-interest, no-fee accounts are like the friendly neighborhood Spider-Man of healthcare—always there when you need them. HealthEquity, the largest custodian of Health Savings Accounts in the U.S., has partnered with Paytient, the market leader, to expand the distribution of HPAs into their broad employer account base.
This benefits revolution isn't just a flash in the pan. The U.S. Department of Labor projects that ICHRAs will grow an additional 255% by 2025. That's faster than you can say "open enrollment"! And it's not just small businesses jumping on the bandwagon. ICHRAs grew by a whopping 84% among applicable large employers. It seems even the big players are realizing that sometimes, smaller (and more flexible) is better.
But what does all this mean for employees? Well, it's like going from a set menu to an all-you-can-eat buffet. With ICHRAs, 60% of employees are choosing Gold and Silver ACA plans. Meanwhile, LSAs are allowing staff to invest in everything from professional development to pet care. It's workplace benefits your way, without the "would you like fries with that?"
For employers, these new benefits are a secret weapon in the war for talent. They're seeing improved employee well-being, increased engagement, and enhanced employer branding. It's like giving your company a makeover, but instead of a new logo, you're offering a better quality of life.
As we look to the future, one thing is clear: the days of one-size-fits-all benefits are as outdated as dial-up internet. ICHRAs, LSAs, and HPAs are ushering in a new era of personalized, flexible benefits that cater to the diverse needs of today's workforce. It's a brave new world of workplace perks, and frankly, it's about time. After all, why should choosing your benefits be any less personalized than choosing your lunch order?
So, here's to the benefit revolution—may our health plans be flexible, our lifestyles supported, and our healthcare payments painless. The future of benefits is here, and it's looking better.
CEO CHAT
Steve Piaker, Managing Partner, Ten Coves Capital
Click here to read our latest CEO Chat, with Steve Piaker of fintech investor Ten Coves Capital.
WHAT WE'RE READING
Judy Faulkner's 25-to-50-year plan for Epic. Excellent and insightful summary of Judy Faulkner's executive address at Epic's Users Group Meeting in August. (Becker's Health IT)
PayPal: A Fintech OG rejoining the Fastlane. A detailed look at PayPal's origins, early success factors, current product stack, latest releases and reasons to be bullish. (Fintech R&R)
Deal Tracker. Regularly updated list of healthcare payments related transactions since November 2023.
Conference List. Rolling twelve month look ahead at conferences and other events covering healthcare payments, revenue cycle, fintech and related areas. Updated through September 2025.
CEO Chat. Thoughts from healthcare payments CEOs on the problem their company was founded to solve, their right to win, and plans for the next 12 months.
Newsletter Archive. News, trends, and insights from the healthcare payments industry compiled in our bi-weekly newsletter. Last six months of newsletters.
Epic MyChart. Excel sheet with full listing of all Epic MyChart instances as of May 2024, categorized by state, provider type and specialty.
All of these resources can also be accessed at the FinMed Partners Insights page.
Coming Soon to Nashville
We'll be in Nashville from October 1-3 - drop us a line at info@finmedpartners.com to arrange time to meet while we're in town!
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FinMed Partners is a management consulting and advisory business focusing at the intersection of payments/ fintech and healthcare. Our founders have developed deep expertise from decades of experience with health IT companies, healthcare providers and many players within the payments ecosystem. Investors, boards and executive teams work with us to maximize business value through strategic input and tactical execution.
FinMed Partners LLC, 34 Long Avenue, Belmont, MA 02478, United States
