medassets-logo.jpgMedAssets, an Alpharetta, Ga., provider of IT and services designed to maximize hospital revenue, said it plans to sell as many as 13.8 million shares at a price of $14 to $16 apiece, for a maximum IPO take of $221 million. The company’s latest SEC filing is here.

The offering would value MedAssets at as much as $685.8 million. In overall size, the amount MedAssets hopes to raise in the offering is slightly less than the $230 million it first estimated when it filed the IPO.

MedAssets, which we covered briefly here when it first filed its IPO, cloaks its business strategy in such a thicket of buzzwords that at first glance, it’s difficult to figure out what the company actually does. It describes its offerings as ways to bolster “revenue cycle management,” streamline operating costs, save on supply purchases and integrate information flow for “improved decision making.”

In practice, one big chunk of MedAssets business appears similar to what Athenahealth does for physicians’ practices, which is essentially to help amass and organize enough information to successfully challenge insurance companies and Medicare when they deny claims or offer lower-than-desired reimbursements. In that sense, it’s part of the giant game of whack-a-mole that is the U.S. healthcare system, where most of the major players are intent on squeezing as much money out of each other as possible. Between that and other efficiency improvements, MedAssets claims to improve per-patient revenues by one percent to three percent.

How much does MedAssets love its healthcare-finance geekspeak? Well, in a recent press release for a new “workflow management” tool, MedAssets claimed that the product “enhances hospitals’ revenue integrity by enabling managers to disperse chargemaster information and assignments to revenue stakeholders organization-wide and, subsequently, to track task status and completion.” Similarly, a quick stroll through the trade literature turned up the following gem in a Biotech Week article from last week:

“In response to customer feedback and the current transparency trends in healthcare, we created a chargemaster tool that assists healthcare providers in preparing their chargemaster for public consumption while remaining compliant with current regulations and optimizing revenue,” said Kate Banks, senior vice president, MedAssets Net Revenue Systems.

“Chargemasters” are the folks in charge of managing insurance and Medicare claims, which helps clarify MedAsset’s main selling point. (This 2005 article from Healthcare Financial Management provides some more insight into the way people in this field actually think, although it’s pretty heavy going.) I have to say, though, that I’m still scratching my head over what in the world Ms. Banks means when she says the tool helps prepare chargemasters for “public consumption.”

That said, it’s worth noting that “revenue-cycle management” accounts for only about 45 percent of MedAssets’ revenues in 2006, with “spend management” — mostly, it seems, jawboning lower prices out of suppliers of medical products and devices — making up the rest. The company’s revenue growth appears to be slowing, and its net loss attributable to common shareholders has risen sharply in the last few years, to $23.6 million in 2006. It’ll be interesting to see if the company can pull off an Athenahealth-style triumph with its IPO.

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