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MedAssets, Inc. (MDAS - Snapshot Report) announced that Allina Health, a not-for-profit health system, has extended its prior agreement with the company to align hospital and physician reimbursement strategies more efficiently across its own healthcare domain. Following this positive piece of news, MedAssets’ shares gained 15 cents (since Nov 25) to end the session at $21.54 on Nov 29, 2013.  

Allina Health delivers care for patients, from birth until the end of life, through its wide network of 90+ clinics, 12 hospitals, 14 pharmacies, specialty care centers and specialty medical services. The extension of the relationship with MedAssets demonstrates the Minneapolis-based healthcare system’s intentions to comply with the accountable care organization (ACO) delivery model and grow as a value-based organization.

The sole intention of The Patient Protection and Affordable Care Act is to ensure that all Americans have access to superior quality healthcare at affordable prices. It includes payment reform initiatives that seek to promote physician-hospital integration, including ACOs. Under this new mechanism, all providers like hospitals, medical groups and independent physicians will be jointly accountable, financially, for both the cost and quality of a defined patient outcome.

MedAssets is a healthcare performance improvement company, focused on helping providers realize financial and operational gains, so as to serve better the health care needs of the community.

This relationship is also expected to bring in new payment methodologies that promise, within the scope of one payment, services from pre-acute, acute and follow-up care providers.

Moreover, with the implementation of MedAssets Contract Management Professional and Prospective Episode Manager, Allina Health will be able to model, bundle and price both hospital and professional claims under a single-bundled contract. Allina Health can incorporate the insight gained therein into its pay or contract negotiations.

Such in-depth analysis will help Allina Health to determine reimbursement patterns in future, in order to mitigate financial risks and identify greater cost-saving avenues.

MedAssets Contract and Episode Management Solutions enable health systems to narrow the gap between traditional fee-for-service and fee-for-value reimbursements. The Contract management and Modeling tools from MedAssets have helped Allina Health achieve annual financial improvement of $6 million to $8 million during the last 10 years.

Currently the stock carries a Zacks Rank # 4(Strong Sell). Investors interested in the industry may consider stocks like Charles River Laboratories International, Inc. (CRL - Snapshot Report), ICON Public Ltd. (ICLR - Snapshot Report) and Air Methods Corp. (AIRM - Snapshot Report) carrying a Zacks Rank #2 (Buy).

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