A-Life Medical, the San Diego-based computer-assisted coding company, is the newest firm to be brought into the Ingenix fold. The acquisition follows a strategic alliance formed between the two companies last year.

Terms of the deal were not disclosed.

Ingenix has long provided medical coding research and encoding tools to hospitals and physician practices, and A-Life Medical is a leading provider of computer-assisted coding (CAC) software. Together, the companies will accelerate development of advanced coding solutions for billing services providers, physician practices and in-patient and out-patient providers, as well as for more medical specialties.

The purchase – the latest in a string of aquisitions by the UnitedHealth subsidiary meant to help providers control costs – will help address the new swell of insurance enrollees resulting from the Patient Protection and Affordable Care Act and will better enable physician practices and hospitals transition to ICD-10 more efficiently.

“Combining A-Life Medical with Ingenix is an extension of our strategic alliance that enables deeper integration of our complementary technologies to create more powerful coding solutions for our clients,” said Bill Miller, executive Ingenix's vice president of health care delivery solutions. “Even as the volume of medical claims grows, healthcare providers face increasing pressure to reduce administrative costs. These challenges will become more acute as 30 million more Americans obtain health insurance because of healthcare reform, and as regulatory requirements such as the transition to the ICD-10 coding system come into effect. Together, A-Life Medical and Ingenix will create advanced coding solutions to help our clients manage these challenges efficiently.”

Currently, claims coders use manual processes, supported by un-connected, single-purpose systems: clinical documentation is reviewed individually by medical coding staff who identify diagnoses and related procedures provided during patient care. These events must have codes assigned to them for use in billing and performance measurement programs. Coders use one system to research medical codes and another to create encoded documents.

Inefficiencies in medical coding add more than $8 billion in administrative costs to the healthcare system, result in billing and payment errors and slow payments to healthcare providers.

A-Life Medical has developed LifeCode, a patented Natural Language Processing technology that assists medical coders and clinical abstractors through various software applications, including Actus, A-Life Medical’s industry leading CAC product. LifeCode reads clinical documentation, deciphers the meaning and context of words within medical records and correctly identifies diagnoses and procedures provided during patient care. The software then recommends appropriate and compliant ICD-9 and CPT-4 codes. Coding staff then confirm the suggested codes or conduct additional research to validate them or adjust them.

“Ingenix has unparalleled expertise in medical coding, and together, we can truly advance the science of coding technology to create a single, advanced CAC platform that supports coding across all venues of care,” said Jaye Connolly, A-Life Medical's president and CEO. “In addition to helping our clients increase coding accuracy and compliance, we’ll help them achieve greater efficiencies through improved productivity and reducing the cost of managing disparate coding tools. We’ve already proven the success of this model, which can now be extended for billing services providers and physician practices.”