Healthcare Revenue Cycle Firms MedSynergies and Practice Performance Inc.

MedSynergies Inc., a leading provider of healthcare revenue cycle services and technology that includes advanced analytics and reporting platforms, announced it has completed a merger with Dallas-based healthcare management and technology company Practice Performance Inc. (PPI), effective August 31.

The merger combines PPI’s revenue cycle expertise in orthopedics, cardiology and OB/GYN with MedSynergies’ technology and support services infrastructure. Specific financial terms of the agreement were not disclosed.

The joint operations, capabilities and resources from the merger will accelerate growth and are expected to position the new, larger entity — called MedSynergies — among the top 10 U.S. providers of revenue cycle management services. With greater breadth and depth of solutions to support a broader range of physician practices, the combined operations are anticipated to approach $1 billion in charge volume and 2.9 million transactions during 2006.

“By joining forces with PPI, MedSynergies is extending its commitment to enhancing full revenue cycle outsourcing services that meet the growing and complex demands of today’s healthcare provider organizations,” said John R. Thomas, CEO and president of MedSynergies. “Because PPI’s complementary technology offerings and service philosophy are such an ideal match for our team and our provider customers across the U.S., we are confident that this is MedSynergies’ most significant step forward in our 10-year history.”

The PPI unit of MedSynergies will be known as Practice Performance Inc., a MedSynergies Company, specializing in revenue cycle management, billing and collections, code review, financial accounting, information technology, human resources and business process outsourcing. While the complementary nature of the companies’ revenue cycle businesses will result in virtually no redundancy, MedSynergies will strategically invest in and evaluate opportunities to increase service levels and offerings for existing customers of both organizations.

“Since 1996, PPI has focused on the overall quality and efficiency of the physician office environment and MedSynergies not only shares that focus but also mirrors our expanded vision for revenue cycle management throughout the industry,” said Jonathon N. O’Sullivan, chairman and CEO of PPI.

Customers of MedSynergies and PPI will benefit from increased scalability and more robust service capabilities, and the two companies are now enabled to address a wider range of physician specialties with tailored revenue cycle management solutions.

“The number-one priority for PPI and MedSynergies continues to be serving our clients,” said Don Dale, president of PPI. “We are excited to enter the next phase of PPI’s contribution to enhancing the strategic, financial and operating environments of our physician clients for a stronger and increasingly patient-focused healthcare system.”

With the merger completed, Mr. O’Sullivan will join MedSynergies’ board of directors. He founded PPI and VMG Health, a healthcare valuation and transaction advisory services firm, and has acted as a business and financial advisor in mergers, acquisitions, restructuring and consolidation of physician groups in various business structures. Mr. Dale, who will continue serving as president of PPI, is a certified public accountant who has served as regional comptroller overseeing the medical billing and financial responsibilities in the clinical laboratory industry. A frequent business and financial advisor in mergers and acquisitions, he also served as an auditor with Ernst & Young. Mr. Thomas, who has held progressive leadership positions with MedSynergies since its inception in 1996, will continue to serve as CEO, president and member of the board of directors of MedSynergies.

PPI’s 72 employees will remain in its current North Dallas offices, located just 10 miles from the MedSynergies headquarters in Irving.