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2026.10.08 | TB | Healthcare | Lyric Payment Integrity & AI Threats

原标题：Lyric – Tuning the Healthcare Payment Integrity Market – AI-native Competitive Threats & Sale Exploration Outlook

#healthcare #software

Third Bridge · 2026-10-08

Analyst-led • 30 Sep 2026

Companies: ELV US

Jason Adams (JA) VP, Client Engagement at Certilytics Inc

Bryce Victor (BV) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

BV [00:00:01]: Welcome to Third Bridge's Interview entitled Lyric – Tuning the Healthcare Payment Integrity Market – AI-native Competitive Threats & Sale Exploration Outlook. I am Bryce Victor, and I will be facilitating today's Interview with Mr Jason Adams, former Director of Product Enablement and Success Management at Lyric.

Jason, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

JA [00:01:08]: I agree.

BV [00:01:09]: Could you begin with a brief 60-second introduction of your background?

JA [00:01:14]: I have been in the payment integrity space for about the last 10 years, give or take. I've been both in the payer side and on the vendor side. First off, payer side, spent three years overseeing clinical recoveries programme, while at Anthem, now Elevance. Annual value of about USD 250m overseeing six different vendors in first pass, second pass as well as clinical audits such as IBR, DRG, fraud, waste, abuse. More recently, spent about just shy of two years at Lyric as the Director for Partner and Product Enablement and Success Management. Sat in the product strategy space, basically determining what vendors, what partnership look like. Mergers, acquisitions, buy vs build, looking at the overall PI landscape and where Lyric could bolster its stance in the PI landscape and then did some work in more in the Medicaid space and predictive analytics at Certilytics.

Questions

00:02:42] Healthcare payment inaccuracies, administrative waste and claims friction cost the US healthcare system hundreds of billions annually. Lyric operates in a massive but fragmented space. What is the company's current SAM [serviceable addressable market]? How might it expand as its products move into adjacent use cases?

JA [00:03:05]: Essentially, what we're looking at right now, total addressable market, obviously, the entire PI landscape, specifically serviceable addressable market. What Lyric is looking at is their legacy product, ClaimsXten, nine out of top 10 payers are their clients. They have 80% of the Blues plans cover approximately 185-190 million covered lives within their ClaimsXten product. I don't necessarily foresee a lot of tremendous growth in that area. They have solidified themselves as a market leader in the first pass primary edit space, utilising their legacy product ClaimsXten. Where I see potential growth happening is through their Lyric42 orchestration or workflow platform that would allow additional vendors, what Lyric would call partners, as additional product offerings besides their primary edits through ClaimsXten. Such offerings could include COB product from Strout, additional edits through Concert, who they just acquired. Could also look at potential fraud, waste, abuse products through Codoxo or similar partners. We were in the process of researching potential partners in the subrogation space. I think in terms of market growth, it's going to come through what they're able to accomplish utilising the 42 platform as opposed to trying to push additional growth with just primary edits in their ClaimsXten product.

00:05:04] Could you break down Lyric's typical pricing model? Is it based on a contingency model, so a percentage of savings, a SaaS licensing fee or a hybrid structure of the two?

JA [00:05:16]: A little bit of a hybrid. Always looking at PMPM. Also potential contingency, but they are in the process of introducing more of a hybrid software-as-a-service model, along with contingency savings, especially around the 42 platform.

BV [00:05:42]: Are you seeing a shift to a more heavily licensing fee-based revenue stream? Do you think that hybrid structure will remain in place in the long term?

JA [00:05:50]: From a payer perspective, the hybrid structure brings a little bit better stability in terms of budgeting. I know while at Elevance and then in some of my time at Humana, looking at the total cost of care as it relates to licensing fees, recovery, especially in the PI space, that is always an internal battle that payers fight. The more structure and the more stable pricing models that can be offered to payers, the more likely they are to be paying attention to those things and to be more acceptable of those. I definitely see a hybrid continuing in this space.

00:06:38] Could you roughly break down Lyric's revenue streams across software subscriptions – Lyric 42 and ClaimsXten – and professional services or human-in-the-loop auditing?

JA [00:06:52]: Specifically at Lyric, they don't do a whole lot of human-in-the-loop auditing. There's some, but it's a lower percentage, I'd say, 5% or less. A vast majority of their revenue stream comes through the ClaimsXten product, only because that's their legacy product with the 42 platform being a new-to-market offering that they were really trying to push. I'd say 85-90% of the revenue stream was coming through the ClaimsXten legacy product.

00:07:34] You mentioned that Lyric42 could be a big growth opportunity for Lyric over the next 2-3 years. How do you expect the company's revenue split to evolve over that period?

JA [00:07:50]: I don't necessarily see revenue dipping at all from their ClaimsXten product. Specific growth is going to happen through 42 as they're able to provide additional offerings. I know one of the challenges that we were facing during my time there was overcoming the AI hurdle with a lot of large payers and figuring out… There was a lot of fear with AI, specifically. From a payer perspective, I want my data to remain in-house. I want it to remain on-prem. A lot of the benefit of 42 is more of a cloud-based architecture for data. It's a bit of an uphill battle. Within my time at Lyric, we were just coming off of the Change Healthcare data breach, which had a lot of payers very, very nervous and rightfully so. The battle was definitely uphill for payers to sign on to the 42 orchestration platform, looking at single tenant vs multi-tenant but in a cloud-based architecture. However, all that being said, that's definitely where the growth is going to happen. I think as we're seeing additional HITRUST certifications, HIPAA compliance and for vendors being able to show annual certifications through those things, through those route, I think that's going to ease payers' minds and allow for additional opportunities. Any specific revenue growth, I think, is going to come through their 42 platform, but it's going to be based on whatever additional product offerings that 42 is going to bring.

42 is a workflow platform. It's an orchestration layer. It's not necessarily a revenue-generating product. It supports the revenue generation as Lyric would be able to attach additional product offerings via 42 to have a single sign-on for their client. For instance, if I'm an Elevance or if I'm a Humana or Kaiser Permanente, as I am looking at the overall product offerings, I have a single sign-on through 42, then I can access all the primary edits and all the ClaimsXten product. I can also access now just recently, additional, more clinical edits and lab edits through the Concert acquisition that Lyric has. Then through their ClaimShark stuff, trying to get into secondary edits. Beyond that, it's going to be a matter of what additional products is Lyric going to be able to offer in terms of coordination of benefits, in terms of subrogation, in terms of more clinical audits, in terms of fraud, waste, abuse. Because Lyric is not going to have the resources and the capacity to build all of those products in-house, that's the whole purpose of the 42 platform is to allow other vendors such as a Codoxo or a Strout for a COB product to attach itself and work itself into the orchestration layer of 42 to be a product offering for the payer at a fee that is agreed upon both by Lyric, the additional vendor as well as the payer.

00:11:59] What kind of pricing premium can Lyric demand for Lyric42 as a workflow integrator? Might the company keep pricing the same but increase recurring revenue because Lyric42 would make the platform stickier?

JA [00:12:18]: There may be a minimal price increase. I don't necessarily foresee it being a big jump at all, if anything, only because when I was there, we were just trying to get 42 out and used by some of our larger clients. We were offering it to them, for instance, "Let's have ClaimsXten run off of 42 rather than run off of your own on-prem solution." That was opening the door for 42 as an orchestration layer to be more acceptable in the payer space. Because it is specifically a workflow orchestration layer and it's not doing the actual reviews, the actual audits, it's not offering its own layer of revenue services beyond whatever partners that it can bring in. I don't see 42 by itself without additional partners being a large revenue boost. I see it being more of a support tool in order to allow other revenue sources to be more easily accessible.

00:13:47] How has Lyric commercially approached the go-to-launch strategy and expansion of its accounts?

JA [00:14:00]: It's been 1.5 years since I've been there. I know that their go-to-market processes have changed because we were still developing the go-to-market process and protocols for 42 when I was there. I don't know that I could speak directly to what it looks like now. What it looked like then was still in the early stages of we need to get this adopted by a few of our larger clients and working correctly so that we can then begin offering it at a larger scale.

00:14:37] In your opinion, what are the key levers that Lyric could pull for account maintenance and expansion to prompt uptake of Lyric42?

JA [00:14:59]: It's going to be, again, nine out of the top 10 US payers are clients of Lyric. That's going to be big. The issue is going to be the cost of implementation and what does that look like? If Lyric can find a way to offset cost of implementation for the payer and bring little to no disruption to the PI landscape for that payer, I think payers are going to be very willing to adopt it. That's going to be the biggest lever they can pull. Second biggest lever they can pull is continuing to build out and announce additional partnerships for additional product offerings, as I mentioned, subrogation or fraud, waste, abuse or COB.

00:15:47] What does the Lyric42 implementation process look like? Has Lyric historically been attentive in streamlining implementation and continued customer support?

JA [00:16:01]: Have they typically been attentive to that? Yes. Once 42 was announced formally, the entire implementation and customer service teams were hard at work in building out what does an actual implementation ongoing support look like and ensuring that there is going to be no downtime for their clients.

00:16:30] What was the standard timeline from customer acquisition to full integration and process optimisation for products such as ClaimsXten?

JA [00:16:44]: Full integration, I believe the goal was between three and six months. Again, I was so heavily focused on 42 that I was aware of a lot of ClaimsXten work, but did not track specific implementation and integration timelines. I do remember there being a 3-6-month window of full integration. Now operationalisation of the full platform and gaining the full benefit of it was going to be the additional three months beyond that. I'd say 6-9 months for full integration and full optimisation.

BV [00:17:34]: What was the standard timeline from customer acquisition to acquisition cost payback? What's the estimated lifetime value of a payer client?

JA [00:17:47]: Oh, gosh, lifetime value is pretty high. It's going to depend on the size of the payer. I don't know that I can speak to dollars, but looking at ROI, it's easily within one year, you've recovered any costs that you had to pour into implementation. You've already recovered those. Within 6-12 months, you're already on the positive side. Beyond that, it's 8-10x, sometimes 12x ROI. I've heard in some clients as high as 20x.

00:18:35] Could you break down Lyric's commercial approach towards legacy products and how the company goes about obtaining new accounts? You said that you don't see as much revenue growth coming from that area. How is Lyric trying to push new accounts and get them to integrate Lyric42?

JA [00:19:00]: Any new accounts are going to be smaller to mid-sized markets and smaller to mid-sized payers on the ClaimsXten product. Obviously, as you're aware, they did acquire ClaimShark middle of 2025 to get into the secondary edit space. I'd say that was a mixed bag because if you're going to promote so hard that the ClaimsXten product does such a great job in primary edits, then why are you jumping into the secondary edit space as well? You're telling me you have a backup in case you miss something, which that's a little odd. Probably not the best optics there. Growth is going to happen in smaller payers, which means smaller dollars, obviously. The way that 42 is going to continue to grow is going to be two ways. One, it has to be adopted by their larger clients. That adoption is going to have to be adoption/integration. It's going to have to be able to be publicised and tracked, in some way showing here the hard benefits to being on the 42 platform. That piece is only going to work if they can also bring in additional products to be offered. That's what 42 was designed to do, was bring in multiple products through partnerships with Lyric, with other companies' partnerships with Lyric in order to offer Lyric's clients a more holistic payment integrity landscape product.

00:20:50] You touched on Lyric's May 2025 acquisition of ClaimShark and how it might be slightly questionable in your opinion. What key synergies do you see resulting from the July 2026 acquisition of Concert? How do you think it influences Lyric's positioning in the industry?

JA [00:21:10]: Concert offers a number of deeper lab edits that Lyric didn't necessarily have at the time. Whether they place those lab edits in the primary or the secondary space, obviously, is dependent on how they work the product out. I think offering additional lab and more clinical edits that Concert had already clearly developed and developed well just bolsters the ClaimsXten and Lyric's overall product offering.

00:21:43] You mentioned vendor relationships. What channel partnerships is Lyric pursuing with consulting firms, claims clearinghouses and EHR [electronic health record] vendors to try and accelerate market penetration?

JA [00:21:58]: Again, I can't speak to the last 12-15 months, but prior to that, we were deep in talks with both Edifecs and Availity. Obviously, Edifecs wound up working closely and partnering closely with Machinify. Sorry, I'm getting some of my names mixed up. The Edifecs partnership started fading while I was there, but the Availity talks were continuing. I have not seen a lot of market announcements in terms of any big partnerships being announced from either side. I don't know if those talks are still somewhere in the loop or if they've died down a little bit. I know those were the two that were heavy in discussions within the last 1-1.5 years.

00:23:02] Lyric's client roster includes healthcare giants such as United Health, CVS and Humana. Approximately what cumulative proportion of revenue is coming from these major accounts? Is the company holding substantial customer concentration risk?

JA [00:23:23]: It's a good question. Typically, I would say, yes. However when you have both nine of the top 10 payers and 80% of the Blues plans, you have a little bit of padding there should one or two of the top payers decide to go with a different platform.

00:23:49] How high are the switching costs for a customer once Lyric is fully deployed in the workflow? How sticky is the company's software, both legacy and now Lyric42?

JA [00:24:05]: Because of its legacy, Lyric is pretty high in terms of stickiness because they're deeply embedded in the payers' adjudication workflow. It's in line, it's real time, and it creates a pretty high switch costs beyond what would be a typical SaaS tool. The national payers, they have meaningful pricing leverage given their scale, but switching from Lyric to something else is going to create a lot of tension that a lot of payers aren't going to be interested in seeing, especially if any other vendor is going to be able… They're going to have to show significant gains and significant ROI within the 12 months in order to talk some of these payers into switching from Lyric. I would say the biggest concern right now is other large vendors, I'm thinking probably like an Optum, reverse engineering some of what Lyric already has. Obviously, Optum has a massive data and analytics capabilities. The barrier isn't necessarily building the rules logic. The barrier for any vendor to offset Lyric as a vendor of choice for some of these national payers is going to be how do we do this better than Lyric and at a lower cost? I think most people still haven't figured that out yet. I think it is a long-term threat but in the next three or four, maybe five years, I don't see Lyric falling by the wayside anytime soon.

00:26:22] You mentioned that it's unlikely that Lyric's pricing is going to be undercut. How much leverage do the mega payers that I mentioned possess in terms of contract term determination and pricing negotiations?

JA [00:26:40]: There's quite a bit of leverage. It's all back and forth and we will get wound up with attorneys and legal departments for months. There is significant leverage that these large national payers will hold and continue to hold.

BV [00:27:02]: If Lyric pivots to focus more on smaller accounts and regional plans, could there be more room for high-margin pricing there?

JA [00:27:16]: Yes, for sure.

00:27:19] How do you think that Lyric could best pursue diversified accounts, given that it's very well-positioned within tier 1 national payers? What do you think is the best strategic approach for the company to start breaking into smaller payers?

JA [00:27:36]: They're going to have to show a really fast ROI, and they're going to have to show almost a net positive within the same fiscal year for any payer to really consider that. The other option is if Lyric is approaching smaller to mid-sized payers that that are trying to build things in-house and just not doing it well, they can offer a pretty standard solution that's going to cover 80-90% of what a mid-sized payer is struggling to build right now. The pricing model is going to be the contingency fees and the PMPY. It's going to be a bit more aggressive, but it's also going to offset that mid-range payers' internal cost for building the same product.

00:28:40] Has Lyric proven it can successfully adapt to the unique regulatory requirements of state Medicaid agencies or Medicare fee-for-service?

JA [00:28:49]: Yes. They're highly adaptable in that space.

00:28:54] The healthcare industry has experienced a shift towards value-based care. How well-positioned is Lyric to capitalise on the shift towards preventative prepay interventions as opposed to more retroactive behaviour?

JA [00:29:12]: Lyric's flagship product is the primary edits. That is prepay. In a sense, they're already sitting there. However, the continued shift left, that's where 42 is going to come into play a bit more prominently. Whatever product offerings that 42 is going to be able to bring to a payer, that is also going to sit in that prepay space. That remains to be seen. 42 can handle the orchestration. That's not the problem. It's going to be what additional products or services can integrating 42, what's that going to bring me in that shift left mentality? I haven't necessarily seen a lot of partnerships or the like announced saying this is going to really solve some big problems here.

BV [00:30:23]: In your perspective, what kind of strategic prioritisation should Lyric pursue to accommodate that shift? What are the company's major gaps that need to be filled most immediately for a value-based care-specific environment?

JA [00:30:41]: The stuff that we were watching, during my time at Lyric, the products that we were really focused on bringing in was fraud, waste, abuse products. They were going to be a really, really solid offering in addition to the primary edits. Additionally, we were looking at, a low-hanging fruit would be COB, especially between government and commercial lines of business. Those would be a couple of pieces of lots of value add and probably lower implementation costs.

00:31:27] What makes you classify COB [coordination of benefits] as low-hanging fruit? How do you think Lyric could integrate that in and why would it be easily integrated?

JA [00:31:40]: We already had a lot of the integration built. We just were still waiting on, essentially, the final paperwork to be able to get everything done in terms of a partnership with the COB product offering. The COB, I say it's low-hanging fruit because of the partnership that we were pursuing with the organisation we were pursuing it with, already had a significant COB product offering as showing a high rate of return based on the costs and the high hit rate, highly successful COB product. Because we already had that partnership nearly solidified and because we already had a lot of the data and the data flow and integration points figured out, I would say it was probably 80-85% there when I was still at Lyric, again, 15-18 months ago, whatever that was. That's the reason I say it's low-hanging fruit. A lot of the work is already done, and it just becomes merely a matter of here's a new product offering for the 42 platform.

00:33:16] The healthcare payment integrity space includes entrenched incumbents and a new wave of AI native start-ups. What is Lyric's core differentiator against legacy claims processing engines such as Cotiviti?

JA [00:33:33]: Cotiviti is typically set in the postpay space. Lyric's ClaimsXten product has typically been primary edits. That's a general differentiator. Lyric, with its acquisition of ClaimShark, is moving into the secondary edit space as well. That's going to be more head on with the Cotiviti or with Optum. However, because of Lyric's continued client base, Lyric is going to have a seat at the table for the foreseeable future. It's going to be because their ClaimsXten product is so solid in what it does, because of Lyric's current client base being so vast and because of the 42, the orchestration platform being native AI. I think Lyric has positioned themselves well to handle both incumbent battles such as a Cotiviti or an Optum plus go head-to-head with a number of market challengers such as a Machinify or Claritev or whatnot.

00:34:57] If Lyric uses ClaimShark to push further into the secondary editing space, where a lot of incumbents are well-situated, what kind of ceiling do you see for market capture? Do you think that market share is limited, or could the company substantially break into the space and displace competitors?

JA [00:35:26]: I don't know that I would say displace some competitors. I think what Lyric really is going to wind up doing is taking a lot of ClaimShark's rules and policies and some of the rules engines and seeing what they can do to move those into a prepay or a primary edit space. While ClaimShark was typically secondary edits and some of them still are going to be secondary edits, I don't want to dismiss that, part of Lyric's goal with that acquisition was to figure out how much of those secondary edits can actually become primary with some tweaking. In terms of displacement of current secondary edit vendors, I don't know that there's going to be a lot of displacement outside of having their current clients adopt the 42 platform. If they can get their current clients to adopt the 42 platform, that will more easily open the door to additional secondary edits and maybe push a Cotiviti or someone like that to a third pass.

00:36:39] Given the variety of solutions being integrated into Lyric's platform, do you view the company as an all-or-nothing purchase against competitors? Does it serve a purpose in working adjacently with existing infrastructures?

JA [00:36:58]: It's a really good question. With ClaimsXten, it's more of an all-or-nothing thing. 42, I think that's what has positioned Lyric for continued growth is the adoption of 42 allows it to sit alongside of, or maybe underneath because it's an orchestration layer, to sit alongside of additional opportunities within any payer's infrastructure.

00:37:33] In a pre-Interview discussion, you highlighted that Cotiviti is making significant gains utilising AI capabilities. How far into AI development and integration is Lyric, and how would its AI capabilities stack up against those of competitors that are heavily utilising AI, such as Cotiviti?

JA [00:38:07]: There's two ways to look at this. There's AI utilisation, but then there's native AI builds. A lot of the market disruptors such as a Machinify are bringing native AI builds into the space that are going to really push all the incumbents such as an Optum, a Cotiviti and a ClaimsXten product for Lyric into deeper utilisation of AI. Cotiviti's products, Optum's products and Lyric's ClaimsXten product are not native AI. They are tools that are now being, I don't want to say revamped, but continue to be built out using AI, but they're not native AI builds. There's always going to be those limitations. The incumbents such as a Cotiviti, while they are pushing to utilise more AI, they're not necessarily rewriting their entire product to be native AI. There's going to be additional processing times and limitations that an AI utilised tool is going to have against a native AI tool, if that makes sense.

00:39:40] In January 2025, Machinify was acquired by a private buyer and combined with The Rawlings Group, Apixio Payment Integrity and Varis. In October 2025, the company acquired Performant Healthcare to expand its AI capabilities and better position itself in the government programme customer population. Can you walk me through how Machinify's M&A activity has shifted the payment integrity solutions landscape? What kind of market share shift are we seeing from players such as Cotiviti and Lyric towards Machinify?

JA [00:40:14]: What's really interesting is Machinify did through M&A, what Lyric was trying to do through partnerships in 42. What Machinify did is not unlike what Lyric is also doing through their 42 platform and building out these partnerships. It's offering a more holistic product landscape to the end user vs just primary edits or just secondary edits or just fraud, waste, abuse products. It's offering a more holistic view. The edge that I think that Lyric has over Machinify is Lyric has the 42 platform already designed, and so they can bring on any number of new partners with or without going through the mergers and acquisitions process. They can bring on a number of new partners as a singular product offering through the 42 platform, whereas Machinify is going to have to continue to build out the full integration of products using orchestration layers. I think that's why they added the additional acquisition toward the end of the year to build out their AI capabilities because you have the Apixio, you have the Rawlings COB offering, but those are all standalone products. What you have to do is find a way to unify those in a single product offering. That's where I think Lyric still offers an advantage over Machinify.

00:41:58] Do you see any risk for Lyric taking the partnership route instead of the M&A route, such as if a partnership falls through or the partner adds more risk?

JA [00:42:09]: Absolutely. Yes, there's always going to be that risk. That specific area is where I built my team out, the partner success model, is figuring out how do we not only bring these partners in, but keep them in and make sure that we're creating a scenario where everybody wins as opposed to having to go through the entire process of a merger and acquisition? I say that because it's easier to gain partners, but it's also easier to lose partners. There's always going to be that risk there. However, the acquisition that Lyric announced, what, a couple of months ago of Concert, that was started early in my tenure at Lyric. That's a 2-3-year process, whereas if numbers can be agreed upon, a partnership can be stood up in a matter of two or three months. You see a significant shorter runway when you're dealing with partnerships vs the mergers and acquisitions.

00:43:29] How does Lyric approach maintaining its partnerships? Where is there a major value add? How does the company ensure that there isn't partnership churn? Partnerships are faster than M&A, and you said it's integratable into Lyric42 easily, but if there is a loss of partnership, that's a pretty big downside. How does Lyric approach maintaining partnerships?

JA [00:43:55]: Yes. That's the million-dollar question. What does that look like? What's the benefit to each? A partner is going to bring a product offering to Lyric that Lyric doesn't currently have and Lyric's clients may not currently have. That's what a partner is going to bring. What does Lyric bring to the partner? Lyric brings to the partner nine out of the 10 top health payers, 80% of the Blues plans, 180 million or 190 million covered lives. It's going to be mutually beneficial because that partnership brings a product Lyric doesn't have, but Lyric brings the client base that the partner doesn't have. As long as the contingency fees and the fee structures are all settled upon and the integration is continuing to flow correctly, there should be no issue. That's the model that we built. Maintaining those partnerships is going to be merely a matter of continuing to assess and reassess, is the partner getting out of this what Lyric agreed to? Not just the visibility of all these clients, but the actual sales process, the go-to-market process. Are they gaining additional benefit that they wouldn't have had other than through a partnership with Lyric? That's where a lot of the success management metrics and KPIs were being developed.

00:45:43] Lyric's peers have suffered a lot of volatility and uncertainty due to fear of smaller, AI point solution native offerings. Claritev, for example, saw its stock drop 80% between late 2025 and mid-2026 before partially recovering. How can Lyric fend off similar trends? Do you think that the company's data moat is enough to fight off AI native start-ups? If it's also attempting to develop its own AI native agents, as you mentioned, what does its positioning look like?

JA [00:46:25]: The market definitely has real scepticism that legacy platforms are going to hold up against native AI disruptors basically. That's a fair assessment. Whether Lyric's, what I believe you call data moat, whether that is sufficient, that's the central question that needs to really be assessed. Prospective buyers are already weighing whether AI native competitors could replace Lyric's functions more cheaply. The answer is yes and no. I hate to be really vague there, but 30 years of edits is not going to be easily replicated. However, 80% of 30 years of edits can be easily replicated. Where Lyric's strength lies in its native or in its legacy system and ClaimsXten is the fringe edits that 30 years has taught them to look for that AI hasn't necessarily caught on or learned yet. That's where the competitive streak is still going to keep Lyric at the forefront, I think, is native AI platforms are going to be able to replicate a majority of what Lyric can do, but not all of it. All of it, those fringe edits is where a lot of dollars are made and lost.

00:48:18] Lyric is looking for a sale at USD 250m in reported annual EBITDA, and a USD 5bn price tag is being thrown around. Is a 20x multiple warranted by a mature payment integrity company, given the volatility we've discussed around competition and AI-native entrants?

JA [00:48:41]: I think that the multiple is a little skewed, and this is just me personally, only because Lyric's two acquisitions in the last two years, I believe you said, what was it, 20x multiple or something like that. I believe if you look at the last 12 months, Lyric's acquisitions of ClaimShark and then most recently of Concert have not been able to necessarily show the benefits just yet only because it's going to take some time to show the return for those additional dollars spent. With the EBITDA being based on the USD 250m in sales or whatever, I think that's a little skewed because they've had a lot of volatility in the last 12 months. I don't think we've had enough time to see how the ClaimShark additions and the Concert additions are going to play into Lyric's revenues just yet. If I'm being real, I struggle with that valuation a little bit.

BV [00:50:14]: Do you think the valuation should be lower?

JA [00:50:17]: Probably, but that's just me. I could be wrong.

00:50:25] How long do you think the actualisation of upside from Lyric's acquisitions might take? You're saying it's a slower process to realise some of the synergies, but when do you think the company will be able to say they were good acquisitions?

JA [00:50:50]: I think [Firm] is selling Lyric right now because they see it as an underperforming asset. What I think is that we're in that 12-15-month window post ClaimShark announcement. The acquisition and the full integration was going to be another 6-12 months. We should just now start to see the impacts of the ClaimShark acquisition, in this quarter and going forward. I think the same would be said for Concert. This time next year and going forward will be when we really see the full transparency of were these good acquisitions or not so much. Part of me wonders if [Firm] doesn't see that, and they're trying to get out before that realisation happens. Again, I could be way wrong.

00:52:12] Under new ownership, where do you see the greatest opportunities for Lyric to grow beyond 42, as we've discussed? Are there any operational inefficiencies that you think are addressable to expand the company's bottom line?

JA [00:52:32]: Operational inefficiencies is always going to go back to their engineering base and their engineering team. That's always going to be a very close watch item, at least in my experience with Lyric. I don't want to say that there are inefficiencies there, but I would say that the engineering team would definitely be a watch item for me, given my experience. Potential growth is going to be in two areas. One, what does the 42 adoption with our clients actually look like? I would want to see some specific statistics and models around that. I would also push hard to see what is the pipeline, not for sales, but for partnerships and bringing additional product offerings onto the 42 platform. Those would be my two biggest watch items for any buyer of Lyric and what's this look like.

BV [00:53:46]: Why is the internal engineering team a watch item for you? Where are you seeing points that might raise some eyebrows or demand a closer eye?

JA [00:54:01]: Without getting into specifics, it would be difficult for me to say that because I don't want to cross any boundaries there that might be internal stuff. I would just say one of my watch items would be engineering capacity vs engineering output and having a really solid product roadmap for continued growth. I would watch those three things very, very closely.

00:54:42] In your opinion, what's the ideal buyer profile for Lyric? Do you think the company is better suited to a mega cap tech firm entering healthcare or an incumbent such as Cotiviti integrating more into the primary editing space?

JA [00:55:09]: I would go larger than that. The ideal buyer would be almost like an Amazon getting into this space. That's ideal. I think a very logical buyer for Lyric would be like a Carelon, wholly owned by Elevance, focused in the PI space. I think Lyric has built out enough of a product to really be able to advance a Carelon into a full commercial product offering. I also think that maybe larger competitors such as a Cotiviti, I don't fully see that happening. Obviously, I guess it's a possibility. Outside of the ideal buyer, I would look to either a national health plan or a larger, more health tech forward investment firm.

00:56:34] Do you see an opportunity for Lyric to expand into international markets? Does the company have the capabilities and the capacity to accommodate single-payer or hybrid systems in Europe and Asia?

JA [00:56:52]: They have the technical capabilities to do that, yes. I fully believe that. I don't know that I could speak to the operational capabilities. I'm not sure if I could answer that question sufficiently. I could take a guess, but I wouldn't want to steer someone wrong there.

BV [00:57:55]: With that, we can wrap up the conversation. Really appreciate your time, and I hope you have a good rest of your day.

JA [00:58:01]: I appreciate it. You too.

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