Health IT startup wants to shed light on hospital insurance contracts and improve patient interaction

Insurance reimbursement contracts for providers are notoriously complex and opaque. Each procedure has a separate code and there are various permutations and combinations for when payments are available.

That gets in the way of practicing medicine and now a Minnesota health IT startup wants to help doctors’ groups and hospitals focus on their core function.

MD Clarity has a cloud-based, software-as-a-service product through which doctors can know whether they are being paid appropriately by insurance companies for treating their members.

“… the reimbursement formulas are very complicated. For [providers] to look at every single payment that comes from an insurance company and ensure that it is accurate is impossible, said Mike Albainy, founder and CEO of MD Clarity. “They would need five people sitting there 24 hours a day.”

MD Clarity’s product drills down to the procedure level to make sure that the provider is getting paid accurately.

“Where they should have paid providers $400 for a procedure, they only paid $100 because their system adjusted a price incorrectly. Payers have very old systems,” Albainy said. “So, for one, we are finding a lot of money for providers that before they didn’t know that they were missing because nobody was looking at this stuff.”

But besides making sure that physicians are being reimbursed appropriately, the software can also see whether proposed contracts from a new payer are fair. It does that by simulating a potential contract across all the data that the provider has before providers can decide whether it is in their interests to strike a relationship with a new payer. For instance, providers don’t have to take it at face value when an insurer approaches with a proposed contract and say they will see a 2 percent increase in reimbursements. Running that contract through the MD Clarity system and the provider’s own historical clinical data might actually reveal that reimbursements will decline.

“Blue Cross is telling us that it will be a 2 percent increase, but we know based on specifics of our organization that it actually will be 0.6 percent decrease, so we need to ask for XYZ to truly get a 2 percent increase,” Albainy explained. “So it creates a more fair negotiations process where we can kind of sit between the payer and the provider and validate how a contract is truly going to play out on the uniqueness of that provider and what they do.”

MD Clarity also has a price transparency tool that providers can share with patients so that patients can know exactly how much they will have to pay out of pocket.

“If my doctor was thinking about giving me an X-ray or doing surgery, based on my insurance benefits and their relationship with my insurance company, they would be able to look up on the spot that this is going to cost you X amount out of pocket and maybe we should find something simpler first,” Albainy said of possible conversations that doctors could have with their patients.

One of MD Clarity’s customers – Summit Orthopedics – is using MD Clarity to manage contracts and to estimate costs. At the Woodbury Ambulatory Surgical Center and Landmark Surgery Center owned by Summit Orthopedics, MD Clarity is being used to figure out how much money patients would have to pay for any surgical procedure, said Tammy Gill, business office supervisor. She noted that the software also “helps us to know what we will get paid for procedures so we know if they will be profitable or not with the different payors.”

MD Clarity offers both solutions to providers and charges roughly $5,000 to $10,000 for small provider groups ranging from about 5 physicians to 50. A pricing model for large providers like hospitals has not been fixed so far. MD Clarity’s customers are mainly in the Twin Cities region of Minnesota and in Seattle, Washington, where the company maintains offices. Some customers include Twin Cities Orthopedics, Summit Orthopedics and Woodbury Ambulatory Surgery Center.

The company has roughly five employees and hopes to grow to 10 or 12 by the end of the year.

While MD Clarity is trying to shed light on processes that were largely opaque before, Albainy is all too aware that those older fee-based reimbursement models are changing. He intends MD Clarity to win the “race to build a solution of determining appropriate reimbursement related to quality.”

 

[Photo Credit: Freedigitalphotos.net]

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