A health IT startup studying the health insurance claims space sees a minefield of mistakes that can hold up reimbursement for weeks and even months. Better developed an app so people who buy their own insurance can easily get assistance in addressing these billing errors and speed up payment.
San Francisco-based Better raised $1.1 million to recruit a few engineers and to expand its customer base.
Initialized Capital led the funding round and Designer Fund also took part in the round. Several angel investors also participated including Lee Linden, who founded and sold Karma to Facebook, Halle Tecco, who founded health startup incubator Rock Health, and Brent Goldman, who founded Standard Treasury. Postmates cofounder Sean Plaice, Spruce Health founder Ray Bradford, Mixpanel cofounder Tim Trefren, and Alex Balandin also backed the business.
This is how Better’s app works. Users enter information such as their insurance card, personal information, take a photo of their bill. and transmit it to Better. The company reviews these bills for incorrect information and missing data. It works with payers and providers to identify and remedy errors, Norman said. The company files the claim with the user’s health insurance company. Better will also file out-of-network claims for medical expenses such as therapy, psychiatry, acupuncture, chiropractic care, and dental work. The company works with health insurers such as BlueCross BlueShield, HealthNet, Anthem and UnitedHealth Group, a press release said.
“We know that 90 percent of medical bills are miscoded,” said Better Founder and CEO Rachael Norman said in a phone interview. “Those buying insurance out of pocket have the least support and we want to ensure they have support… Currently, patients have to advocate for themselves to get these bills filed. We are unique in providing this service, although there are advocates who work on behalf of patients for larger bills.”
Asked how long the company takes compared with the current standard, Norman said it depends. “It’s hard to control an insurance billing,” she said. Still, Norman estimated that the average amount of time it takes for reimbursement of a claim is 30 days if nothing goes wrong, but sometimes she noted that it can take that long just to find out whether there’s a problem.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Our technology can significantly speed up the process of getting paid,” Norman said.
Still, the company isn’t charging for the service it provides. In the future, though, it will charge 10 percent of what customers are reimbursed.
Norman made an argument for her business in a blog post describing what she learned in the year leading up to the company’s launch.
She painted a picture of two starkly different realities when she contrasted the kind of customer service a self-insured employer plan would typically receive compared with someone relying on an exchange plan.
The employer plan will have well-trained dedicated agents, while the bargain plan will have unhelpful call center employees, who aren’t really able to answer any questions. On Covered California or other exchange plans, individual consumers have very little negotiating power. We often see the worst allowable amounts from plans purchased on the individual marketplace….
Even though our legal system favors the consumer when contracts and policies are ambiguous, the efforts and energy it takes to do the research and fight errors is untenable for most. People do not have the time or resources to fight to be treated fairly, and the insurance companies benefit.
The business isn’t currently promoting itself but word of mouth has helped, particularly from providers recommending Better’s app to patients, Norman said. She noted that most of its business comes from regular recurring expenses, such as chiropractor or therapist appointments.
Although companies providing services to fix medical billing errors aren’t new, a startup focusing on the niche market of supporting individuals with their own insurance is. Eventually, however, Better’s interest will inevitably expand to the employees of self-insured companies — a market where it will likely have much more competition.
Photo: Getty Images
