Intelenet, a multi-faceted business process outsourcing (BPO) solutions provider is all set to acquire a US-based healthcare records processing and IT firm to address the lucrative healthcare records conversion industry. This will be the company’s fourth acquisition and is likely to be a deal of $25-$30 million.

Initially, a joint venture between HDFC and Barclays, Intelenet was later taken over by Blackstone, a private equity firm. It used to get revenue from financial service clients. Intelenet has obtained a contract worth $300-million from one of Blackstone’s portfolio firms in the healthcare industry in the US earlier this year.

This latest acquisition will be an effort to diversify into the US healthcare market. The company has diversified into different fields ever since its first acquisition. It has entered into travel domain with the acquisition of Travelport and Upstream BPO. The acquisition of Sparsh BPO helped it to venture into domestic outsourcing.

According to Intelenet executive vice president Sandeep Aggarwal, the company is planning to grow through acquisitions. He also comments on the conversion of ICD-9 to ICD 10 format. “We expect a huge opportunity from the conversion of US healthcare records from the ICD-9 to ICD-10 format and other codes like the HIPPA and Family Medical Procedural Codes. This will be a bigger opportunity than what Y2K conversion was,” Mr. Aggarwal said.

The ICD-9 or the International Statistical Classification of Diseases-9, with approximately 11,000 classifications is to be converted to ICD-10 format with around 68,000 classifications by 2012. “Some part of this conversion will involve technology, but a large part will be manual,” said Suresh Ramani, US-head of sales, Intelenet. “A majority of providers and payers will move to this standard by 2012 and a wrong classification could result in under-invoicing or over-invoicing,” stated Mr. Ramani.

According to Mr. Ramani, the US healthcare reforms, which provide universal insurance access to all citizens, are also expected to cut costs and move towards higher outsourcing. Healthcare records still require manual work. This includes reading scanned prescriptions and interpreting them under new classification. Intelenet plans to add around 5000 seats, each worth $ 20,000 in annual revenues, by December 2010 to serve the US healthcare industry. Some of the companies that have already moved to ICD-10 format are Europe, Singapore, Japan and Australia.