Canopy Financial, a vendor of healthcare banking technology that connects healthcare and financial services, has acquired CareGain, Inc., a provider of consumer-directed healthcare account administration and management software to health plans.
Through the acquisition of CareGain from Chicago-based Fiserv, Inc., Canopy has moved to consolidate the healthcare banking technology market. Under the terms of the acquisition, CareGain's clients will now be served by Canopy. Fiserv retains its healthcare banking solutions for its financial institution clients.
The new entity provides the technology supporting the CDH programs of many of the top 25 health plans and financial institutions, and administers more than 1 million CDH-related spending accounts nationally.
"Today marks a great milestone for our company and the CDH industry in general," said Vik Kashyap, CEO of Canopy. "This partnership brings together the best minds and technologies and creates an incredibly rich value proposition for our clients, employees and shareholders."
Kashyap said the move expands HealthDirect, the company's electronic payment, administration and account management and investment technology platform for Health Savings Accounts, Flexible Spending Accounts and Health Reimbursement Arrangements. CareGain will integrate its Asset Management Platform with Canopy's HealthDirect; the combined product is expected to be available during the fourth quarter of 2008.
"The popularity and growth of consumer-directed healthcare accounts is creating a unique opportunity for both health plans and banks," said Red Gillen, senior analyst with Celent. "A truly integrated, multi-custodian FSA, HRA and HSA administration platform with embedded payment capabilities unlocks a great deal of potential for those in the CDH ecosystem."
The combined company serves more than 50 enterprise health plan and bank clients and will administer more than 8 million claims each year.
"As a client of both companies, we are excited about the potential this move offers us and we believe this creates a compelling solution set," said Jim Bridges, vice president of product development with Coventry Health Care of Bethesda, Md.