Picis to Acquire LYNX Medical Systems

Combined company creates most comprehensive end-to-end clinical information and financial automation system for hospital emergency departments

July 24, 2007—Wakefield, Mass.—LYNX Medical Systems (LYNX), a leading provider of emergency medicine documentation and revenue management solutions, today announced an agreement with Summa Health System (Summa) to implement LYNX E/Point facility charging software. E/Point will be implemented at Summa hospital Emergency Departments (EDs) in Akron City, St. Thomas and Cuyahoga Falls, Ohio.

Picis, the leading global provider of high-acuity care information systems, announced today that it has entered into a definitive agreement to acquire LYNX Medical Systems of Bellevue, Wash. LYNX provides revenue cycle management solutions to hospital emergency departments and Picis provides the market-leading clinical information system for emergency care. The combined companies will now offer a powerful solution that provides the most comprehensive end-to-end system to manage, automate and optimize both the clinical information and financial functions of hospital emergency departments. Terms of the agreement were not disclosed. The acquisition, anticipated to close later this summer, was funded in part by Goldman Sachs & Co. through an equity investment in Picis and a senior debt issue, which was also announced separately today.

Picis provides hospital emergency departments with a comprehensive and integrated emergency department information system (EDIS) through its CareSuite ED PulseCheck® application. ED PulseCheck helps emergency departments markedly reduce patient wait times and increase throughput while helping to improve clinical documentation, charge capture and patient satisfaction. LYNX’s E/Point and E/Code software and services dramatically improve accuracy in coding procedures (through CMS-audited algorithms) resulting in increased revenue and patient acuity levels, decreased accounts receivable days and minimized compliance risk. Case studies have shown that LYNX customers achieve increased revenue amounting to $25-$35 per ED visit.

The two companies’ combined expertise and solutions will create the most robust integrated end-to-end solution that closely links clinical documentation with coding and reimbursement revenue management. In essence, the combined solution will track patients from initial contact through disposition, and help hospitals to realize maximum revenue and reimbursement for the services they provide. The solution is specifically designed for the needs of the hospital emergency department, one of the fastest growing departments in today’s hospitals.

“From every perspective, short and long term, strategically, financially, and operationally, this acquisition represents another major milestone for Picis,” said Todd Cozzens, Picis president and CEO. “We are not only acquiring complementary technology and services, but also a proven management team, product development expertise and a sales force with a demonstrable track record of success operating in the same markets as ours. We believe we will be the only company able to offer our customers a truly differentiated, integrated and cost-effective tool to manage the growing complexities of the emergency department, the fastest growing hospital care department. We are looking forward to working with our new colleagues at LYNX to quickly bring the benefits of our combined solution to the marketplace and to further serve the over 1,350 hospitals which make up our combined installed base.”

To determine reimbursement amounts for the hospital and physician, a hospital adds insurance and reimbursement codes to a patient’s record before submitting to payers through charge tickets. In-house or outsourced coding experts use the physician’s and nurse’s clinical documentation to align the care a patient received with costs incurred and revenue generated. As a result of poor or incomplete charting and lost or forgotten charge ticket completion, hospitals and physicians frequently do not have quality documentation to support adequate reimbursement rates. In the emergency department, where hundreds of patients are seen each day and where time is of the essence, this situation is particularly true. By combining ED PulseCheck’s clinical care information system with LYNX’s coding optimization software and services, hospitals will more efficiently than ever align the actual patient care delivered with accurate and correct coding and billing, helping to dramatically increase both professional fees and facility revenue, and thereby reducing billing cycles.

“The combination of Picis and LYNX will create an organization that is uniquely positined and qualified to address the substantial information management challenges and opportunities of the growing high-acuity healthcare market,” said Gene Cattarina, president and chief executive officer of LYNX Medical Systems. “We view this as a ‘win’ for our customers, shareholders and employees.”