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Cotiviti Holdings Idea Proposal (COTV)

Cotiviti Holdings Idea Proposal (COTV)

Can Cotiviti further penetrate and cross sell its existing clients to drive continued growth?

Report Available: April 5, 2018


Blueshift’s initial research found healthcare and medical claims growth moving in a direction favorable for claims auditing expert COTV. With 20 of the top 25 health insurers on board as clients, COTV’s strong track record of delivering savings for payers from prospective and retrospective claims auditing is leading to significant growth. However, moderate provider utilization curtailed recent claims volume growth, which, combined with COTV’s difficulty penetrating its existing accounts further, could slow the company’s growth.



  1. COTV is the leading payment accuracy and value-based payer solution provider for the healthcare insurance claims process. Using its advanced and proprietary technology platform and analytics capabilities, COTV focuses on achieving accuracy and eliminating waste across the healthcare payment continuum. By offering solutions for payer liability, coding and contract compliance, and clinical appropriateness both prospectively (reviewing a claim before it is paid) and retrospectively (reviewing a claim after it has been paid), COTV improves the financial performance of health insurance companies, self-insured enterprises, and CMS.
  2. The U.S. government estimates healthcare spending will increase from $3.5 trillion in 2017 to $5.7 trillion by 2026. Wasteful spending and fraud is estimated to make up at least one-third of the total, or $1.1 trillion. COTV generated more than $3.7 billion in healthcare savings for its clients in 2017, positioning it for significant growth since it has not fully penetrated any client’s claims processing operation.
  3. COTV’s shared savings business model provides high ROI with its repeatable solution. COTV expects 70% to 75% of its growth to come from existing clients by expanding the number and type of claims reviewed. Implementing the service available through its July 2017 acquisition of RowdMap, an analytics-driven risk assessment and provider evaluation tool, gives COTV a new subscription fee-based service to cross sell to existing accounts.
  4. COTV will be challenged by the cyclical nature of provider utilization which could moderate claims and reduce revenue. COTV’s clients must delicately balance their desire to maximize profits by reducing erroneous/mistaken claims submitted by providers while not angering providers by being overly aggressive in pursuing mistaken claims. This balance raises possible concerns for COTV’s growth if payers decide to be less aggressive in either the volume of claims submitted to COTV or the aggressiveness of the “edits” they allow COTV to pursue. The competitors in this space are few, but there are some robust providers including UNH’s Optum and healthcare giant MCK.
  5. COTV’s Q4 results produced a beat on earning and a match on revenue, which increased 5% to $176.7 million from $167.9 million in Q4 2016. Revenue growth was driven by a 6% increase in the Healthcare division, including revenues from recently acquired RowdMap. Full year 2017 revenue was up 9%. Guidance for 2018 calls for continued growth in the 8% to 11% range.


Is medical claims volume increasing or decreasing? Is spending with COTV increasing or decreasing? What is the outlook for claims volume and spending with COTV in 2018 and 2019? Will companies engage COTV across other claim types? Will they onboard COTV’s RowdMap services in 2018? Is there any change in the claims review competitive market place? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Health insurance companies, CMS regions, and Industry specialists.


Companies: Cotiviti Holdings Inc. (COTV), HMS Holdings Corp. (HMSY), UnitedHealth Group Inc. (UNH), McKesson Corporation(MCK)


Research Begins: March 19, 2018


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