Magellan Health Services and Performant Financial Announce Strategic Relationship on Recovery Services for Specialty Pharmacy

Healthcare management firm Magellan Health Services Inc. (NASDAQ: MGLN) and accounts receivable recovery firm Performant Financial Corporation (NASDAQ: PFMT) today jointly announced a strategic relationship to offer payment integrity recovery services to Magellan’s commercial specialty pharmacy customers through Magellan Pharmacy Solutions.

Specialty pharmacy overpayment recovery consists of auditing customer claims data in order to identify inappropriate coding, billing, and payment of specialty pharmacy claims. Magellan and Performant piloted the combined audit and recovery services in 2012 with select customers and will now expand this offering to all Magellan Pharmacy Solutions commercial customers.

In 2011, the United States spent $80 billion on specialty pharmaceuticals, and healthcare consulting firms are predicting global revenues in the specialty sector will surpass $160 billion in 2013.An industry report suggests that specialty pharmacy costs may account for 40 percent of total drug spending by 2020.

Magellan Pharmacy Solutions’ SVP of Strategy and Business Development Kjel Johnson said, “Magellan is continuing its innovative approach to the specialty pharmacy market by looking at new opportunities for additional cost savings for our customers through recovery solutions to further enhance the services we offer.”

“Industry estimates place claim overpayments on specialty pharmaceuticals at three to ten percent annually, which potentially amounts to millions of dollars in savings for a plan sponsor each year, so we’re excited about the potential implications for our customers,” said Kjel Johnson, Magellan’s SVP of Strategy and Business Development.

Performant Financial’s CEO Lisa Im said, “We have refined our recovery services over many years and in multiple industries, so meeting this unmet market demand is a natural fit with our strategy.”