The stock price of R1 RCM tanked by roughly 50% this week after the large medical billing and collections company reported an unexpected $30 million loss in the third quarter.
R1’s revenue fell in part because health insurers have taken longer to pay claims to R1’s hospital and physician clients, and because it’s been more difficult to collect on patient bills. R1 also has stumbled with taking over the billing operations of a couple large physician groups. Those factors, among others, ultimately sapped the company’s profit, lowered expectations for next year’s profit, and resulted in Wall Street erasing $3 billion of its market value.
R1’s sharp downturn also raises questions about the timing of a recent stock sale by one of the company’s prominent owners and largest customer: Ascension, the national Catholic hospital system. A fund owned by Ascension and private equity firm TowerBrook sold $306 million worth of R1 stock on Sept. 13, weeks before the company closed the books on its disastrous third quarter.
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