US headquartered Cognizant Technology Solutions (CTS) on Tuesday announced it has entered into a definitive agreement to purchase Health Care Service Corporation’s (HCSC) subsidiary TMG Health. The transaction is expected to close in the third quarter of 2017, subject to regulatory nod. Financial details were not disclosed. TMG Health’s healthcare business and technology professionals numbering to around 1800 will become employees of CTS upon the close of the transaction.

TMG Health, an HCSC subsidiary since 2008, with offices in Pennsylvania and Texas, is a provider of business process services to the ‘Medicare Advantage’, ‘Medicare Part D’ and ‘Managed Medicaid’ markets in the US, supporting 32 client plans and more than 4.3 million members in all 50 states.

“The combination of capabilities from TMG Health, CTS’s digital operations, and digital systems and technology practices will further strengthen CTS’s scalable business process-as-a- service (BPaaS) solution for the government and public health program markets,” the company said.

A BPaaS model provides insurers with a technology and operational foundation for the efficient management of their government lines of business, enabling them to focus on strategic growth at a predictable cost while aligning quality, standards, risk and compliance across their programs.

“Building on CTS’s acquisition of TriZetto, the addition of TMG Health will extend CTS’s market leadership and expand the breadth of its digital transformation solutions for healthcare payers and providers,” the company said. CTS acquired healthcare technology provider TriZetto in 2014 for $2.7 billion.

“We believe there is a growing opportunity for our experienced teams to work together to help current and future clients succeed in highly regulated, cost- and compliance-driven markets,” said Susan Rawlings Molina, president and CEO, TMG Health.

“The addition of TMG Health’s capabilities and experts to our healthcare portfolio will enable all of our payer clients to embrace new digital opportunities with their growing government business lines, be more competitive and respond quickly to changes in these critical markets with increased efficiency from member enrolment through care management, under a predictable, cost-effective BPaaS model,” said Kaushik Bhaumik, executive VP and global head of healthcare, CTS.