Product Concept

The Automated Biller is comprised of two parts –1) the scanner and 2) the database medical billing software. The system is designed for providers to scan in their medical procedures via Scan Form and accompanying medical records at the point of medical service. The Automated Biller creates a paperless workflow; this process can assist all medical professionals to meet all compliance standards.

The Scan forms are custom designed to meet the needs of each individual provider’s specialties. At the point of service, the patients will fill in all demographic (initially) information. Scan Form is scanned into the scanner to populate all demographic information into the data base. After provider sees patients he/she will fill in the bubble as service provided in the super bill and scan. The Automated Biller system will then convert the bubbled information to code and bill insurance companies either electronic or on paper. The key feature of the Automated Biller is that the provider is able to view the insurance claim on the screen before processing the claim through the software; this way the user can catch errors before the information enters the patient ledger database. This process takes approximately 2 minute per transaction. The revolutionary Automated Biller program can thus reduce the typical 7 to 10 days or longer turnaround times between services provided and submit claims to the insurance company. The Automated Biller software gives the opportunity for health care providers to perform more services daily because of the short time for billing and coding. It also eliminates the cost of a complete billing service or personnel.

By making the investment into the Automated Biller, healthcare entities can look forward to increased revenues and reduced operation costs, even for the first year of operations. As we can see in the chart below, the biggest savings a medical practice will realize is a reduction in labor cost. The office that does not have the Automated Biller System still must make an investment into information technology to maintain HIPAA compliance; the amount of the investment is comparable to the retail price of the Automated Biller system. For medical practices that choose to contract a medical billing firm will pay up to 10 percent of their yearly reimbursements collected; for a physician who earns $500,000 a year, they will pay more than $50,000 in billing fees, which is more than the cost of the Automated Biller system. So in effect, the Automated Biller system can not only decrease operation costs for medical billing, but will increase their collection by at least 20 percent.

Chart I: Revenue Analysis of the Automated Biller

Revenue Analysis of The Automated biller

While The Automated Biller offers paperless medical billing solutions, it also handles the functions of traditional software. Here is a glimpse of its many features that allow individual practices manage their medical practices more effectively:

Automatically calculate all complex anesthesia procedures and time accurately, including appropriate modifiers
Automated patient appointment scheduler
Automatically calculate all drugs and supplies used
Automatically generates follow up letters to insurance companies if no payment received after 30 days.
Each system is customized to meet the medical insurance regulations of the provider’s state.
Automatically generates following reports overnight
Daily charge, payment, adjustment by each provider
Weekly charge, payment, adjustment by each provider
Monthly charge, payment, adjustment, and customizable financial reports
Tracking inventory for all medical supplies used
Monthly patient count to reconcile with appointment schedule
Practice analysis by % of payor base like Medicare, Medicaid, and private insurance
Aging Accounts Receivable Account, by number of days (30, 60, 90 and 120) and by insurance
Yearly charge, payment, adjustment, and financial reports all available online

Target Market Analysis

The target market includes any medical practice (chiropractic, physical therapy, dental practices, surgery centers and hospitals) which operated in the United States, including dental that needs to improve their current medical billing practices. The Automated Biller can improve any medical practice cash flow, but is not limited to, the following ways:

The Automated Biller enhances healthcare entities’ ability to reach and maintain HIPAA compliance through its unique medical record storage capabilities
Reduces medical billing costs by eliminating the medical biller/coder
Increases healthcare entity control of reimbursements, billing and scheduling, and financial practice management
Reduces turnover time to receive medical service reimbursement because electronic billing occurs at the point of service
Healthcare entities can spend more time developing their practices and spending more time with their patients instead of maintaining their current billing practices

It is important to note that The Automated Biller will only be available through the US market; Canada would not have a use for this software because of their socialized medicine structure. While other countries utilize a similar medical insurance billing process as the US, the system is not equipped to meet foreign needs at this moment. Depending on the success of The Automated Biller in the US medical billing industry, executives may venture to conquer foreign markets as well.

Evidence of Market Need

Medical billing is an ongoing challenge for all healthcare entities, such as anesthesiologists; they usually will only see patients right before procedures or during times of patient unconsciousness. Traditionally these professionals do not have their own office or staff to complete their billing; many times the failure to provide medical records to a medical billing professional has elongated, or even halted, their payment process. According to Salary.com, the average medical biller should make about $30K per year plus benefits. Medical billing services, the alternative, are expensive; with the new HIPAA compliance regulations, providers need to be especially careful where they send their patient’s medical records. HIPAA compliance violations can come with expensive penalties and can bar providers from being a Medicare participant. Violations are mishandling of patient medical record documentation, lack of proper medical file discarding techniques, and poor training for employees that handle private patient information. If a medical billing firm is charged with HIPAA violation, the provider is also fined for their actions. All of these problems have caused the medical professional industry to seek alternatives to expensive medical billing firms and restrictive insurance reimbursements. Chart II portrays the cost savings that The Automated Biller provides compared to a traditional billing service.

There are so many regulation changes in the medical insurance industry, codes are constantly changing; providers need to ensure that their medical billing agency is maintaining these changes and is getting paid efficiently. The tasks of regulating a medical billing firm’s practices combined with the excessive costs are better spent on The Automated Biller system package. This market need has given rise to the Automated Biller, makes medical billing fast, easy, and HIPAA compliant. The long term financial benefit of a healthcare entity that invests in the Automated Biller is very promising. The long term benefits of the Automated Biller is lower labor costs, no more information technology upgrade costs, and no medical billing agency costs. These reasons plus the added benefit of taking hold of medical practice management in-house will be enticing to most medical practices.

Competitive Analysis

There are a large number of medical billing services available to physicians in the United States; performing a web search results in hundreds of entries. Most of the companies listed provide medical billing and collections services focusing on physicians groups and small medical centers. A competitive advantage of The Automated Biller is that it targets individual medical providers or specialist, like Anesthesiologists, that are normally not an employee of one specific medical facility. Through research and analysis, this is a dramatically under-served market and provides great opportunity for The Automated Biller.

There are two main competitors targeting the same customer base and offering similar medical billing firm software packages as the ones proposed by The Automated Biller; ProMed Billing Services- a wholly owned subsidiary of Omni Medical Holdings, and Professional Associates. Both ProMed and Professional Associates provide comprehensive billing and collection services to a variety of medical professionals such as radiology technicians and physicians in private practice.

General Company Information for Main Competitors

Professional Associates is based in Delaware, and serves customers located in Pennsylvania, Maryland and Delaware. Professional Associates was formed in 1971 to provide billing services for doctor’s providing emergency services primarily in the Wilmington, Delaware area. The main customer based remained Emergency Room Physicians until 1995 when Professional Associates acquired Doctor’s Bookkeeping Service. Professional Associates then expanded their customer base to include Radiologists, Anesthesiologists and Physicians in Private Practice. They have ninety full time employees and approximately sixty-percent of the customers using their billing services are in private practice.

ProMed is headquartered in Shelton Nebraska and serves customers located primarily Nebraska, Iowa, Missouri, Kansas, Arkansas and Mississippi. ProMed is a subsidiary and wholly owned by the parent company Omni Medical Holdings and is a division of Datafuzion, Inc. ProMed considers their operation a turnkey operation for any customer, and does not publish information about employees, staff size or customers.

Professional Associates generally targets medical care facilities with ten providers or less, focusing on small practices and individual independent contractors. Professional Associates targets small practices of ten health care providers or less. Each advertises the use of HIPAA compliant software and architecture, but neither offers specific software of hardware information on their websites.

Expansion capabilities and resource availability for ProMed is limited because it is a privately held corporation. Professional Associates is part of a larger medical services organization and does have the potential to leverage services, infrastructure and staff to medical billing subsidiary.

ProMed and Professional Associates both have a niche business in a limited market with services based on existing customer’s needs. Neither company has an advertised business model or strategy to create services aimed specifically at the type of medical professionals The Automated Biller wants to serve. The Automated Biller can also be a top choice for these companies to save on personnel. Both companies have built infrastructure and business models to serve small groups of doctors, and adapted services and processes to individuals. The Automated Biller sees the individual Anesthesiologist or Emergency Room Physician as a lucrative customer with huge profit potential. In order to fully evaluate the competition and determine where the risks and opportunities exist for The Automated Biller refer to Table 1, SWOT Analysis.

Table I: Comparing the Automated Biller with its Competitors

SWOT ANALYSIS
Strengths
The Automated Biller	Professional Associates	PayMed
Ease of installation Compatibility with most scheduling software No additional hardware requirements for most users Most advanced technology available	Strong market presence in a few states Existing, successful processes Personalized approach to customers	Strong market presence in a few states Existing Successful processes Large parent company resources Image in marketplace of being a technology provider
Weaknesses
Start-up costs No name recognition in the marketplace	Lack of current technology Large reliance on human intervention and manual processes Limited market presence Reliance on acquisition for growth	No clear business strategy or target market Business decisions driven by parent company needs No current plans for growth or expansion into underserved markets
Opportunities
Ease of entry into market National access to underserved customers No national competitor	Leverage of current relationships and providers with related customers Niche service to certain customers	Large resources from parent company Economies of scale with other subsidiaries National presence of parent company and other subsidiaries
Threats
Government Regulations Technology Advancements Nationalized healthcare Reliance on investors	Government Regulations Regional and National competition Staffing resources Hostile takeover	Government Regulations Regional and National competition

Figure I depicts competitors’ location and target geographic. Professional Associates and ProMed both lack a presence, customer base or sales force in the Southern and Western United States. Neither company is currently servicing any of the following states with some of the largest populations of Emergency Room Physicians and Anesthesiologists; California, Texas, Florida, Arizona, Massachusetts or New York. Professional Associates and ProMed combined operate in only 17 percent of the United States. Through this analysis it is apparent that there is a large opportunity for The Automated Biller.

I: Defining the Current Geographic Market

(States in Red are the only states currently serviced by Professional Associates or PayMed billing services)

Pricing Strategy

The Automated Biller is a medical billing service in a box: the system comes with all of the equipment and the accompanying resources to bill as a professional billing service. All medical billing industry regulations are built into the software code so medical professionals can feel confident that medical insurance claims that are generated using the Automated Biller will be reimbursed.

Ten to fifteen percent of the commission from provider reimbursements generated by a traditional medical billing service covers a variety of services; most of these services can be handled by the Automated Biller. This system addresses initial coding and billing, addresses all insurance denials, collects payments from patients, and processes all insurance payments to match with the respecting patient accounts and hard and soft collections, while maintaining all insurance regulation changes to ensure timely payments.

Since the Automated Biller has capabilities above and beyond any medical billing service on the market, its price is based on what a typical medical provider would pay for a medical billing service on a yearly basis. Its cost includes the scanner technology, powerful database medical billing software, and a secure Internet connection to meet the needs of any medical practice.

In three years, this Anesthesiologist can pay a traditional billing service $225,000! The Automated Biller comes with no additional upgrade costs or Scantron printing costs the first three years. An Anesthesiologist can save $175,000 in three years by investing into The Automated Biller.

For $40,000 the Automated Biller user receives the following:

Programmed scanner with scanning software which has OCR capabilities that processes custom-designed forms which includes the following software
- Teleform - $9,600 Retail Price (cost)
- Microsoft Small Business Enterprise Edition - $1,699 Retail Price (cost)
- AMA coding software CPT and ICD-9 - $1,185 Retail Price(cost)
- MedPro Medical Practice Management Software - $7,500 Retail Price (cost)
Scantron forms which are custom-designed to meet the needs of the individual practice; these forms include imbedded code sets that can be upgraded as regulations change, instead of discarding forms
Windows-based medical billing software that provides many tools to manage individual practices such as custom-designed reports, automated insurance and patient collection letters, and varying payment posting options
Full setup and ongoing training provided at additional cost
Technical Support available for most business hours from coast to coast for a small monthly fee

There are many medical billing software options available on the market, but none of them offer all of the features that can replace a medical billing staff. So there is a wide array of pricing levels depending on the options the user would prefer. The Automated Biller is priced significantly higher than other software because it has the most billing options available to the user and the system does not require that the user have medical billing experience or any knowledge of medical billing code sets. The Automated Biller is a sensible solution for an individual provider taking control of their own medical billing obligations and still bill with accuracy and confidence. Table III compares The Automated Biller to some of the other common medical billing software options available on the market such as MedisoftV12 and AltaPoint5.

Table II: Feature Descriptions of The Automated Biller and other Software

Solutions

The Automated Biller Cost and Features	MedisoftV12 Cost and Features	AltaPoint 5 Cost and Features
$40,000	$7,000	$4,995
Upgrades for insurance regulation changes included for the life of the software	Standard program only; specialists must purchase their modules for the system to work for them	Standard program only; focuses more on managing medical records
System generates letters for patient collection and insurance payment every 30, 60, 90, 120 days No data entry, billing and coding personnel needed.	All collection letters are generated through individual patient accounts, no batch capabilities Need employees to data entry, code and bill	All collection letters are generated through individual patient accounts Need employees to data entry, code and bill
Entire system includes hardware such as the server and the scanner for a complete billing system	Cost supports only one user on one desktop; no hardware included	Cost supports 5 users on 5 desktops; no hardware included
Instant snapshot reports that perform financial analysis of the medical practice	Users can add more modules for the system to handle more; separate disks available for Code Sets	Maintains all patient medical records digitally including x-rays, patient history, and prescriptions

Sales Goals

In order to reach the Automated Biller target market, it is important to have the right marketing team and enough funds to make such a large marketing campaign. It is more cost effective to create a joint venture with a large marketing firm and share up to 50 percent of gross profits to reach the target market than spending limited HBSGI funds. Joint venture is projected to last up to 2 years, maybe more depending on the success of the marketing team; at the end of the term, the Automated Biller contract can be bought back as to make full profit. By that time, the Automated Biller would have already penetrated the target market and sales will come much easier.

Operations Plan
The Automated Biller, a Background

The Automated Biller was created through the professional experiences of HBSGI in 2003. At that time, HBSGI was using a DOS based medical billing program called Versaform. Versaform was used as the primary medical billing software program since the early 1990’s and was not able to keep up with the changing regulations in the medical insurance agency. After searching for other medical billing software programs that could handle the demands of multiple medical practice billing while managing other aspects of billing more effectively such as reimbursement posting and accounting consoles. After spending a year searching with no avail, in 2005 Chandana Basu, COO of HBSGI at the time, decided to invest into developing a software system in-house that could handle more than just medical billing.

So in 2000, the Automated Biller concept was born; it took a year to develop most of the consoles of the system. The medical billing software, MedPro was easy to use, used the Windows Operating System, and was able to meet the proposed HIPAA regulations which would come into effect by April 2006. Once Ms. Basu realized that other medical billing software was falling behind in attaining HIPAA compliance, she immediately took steps to modify the data entry process by introducing the scanning feature. This patented procedure reduces billing time by at least two weeks and can increase revenue for the novice medical biller because all of the codes are imbedded into the scanning form.

Today, the unique process of the Automated Biller is still one of it’s kind. Through research and development, the product is scheduled to be enhanced by allowing physicians to complete all of their medical billing through a hand held device such as a PDA. The revenue potential of the Automated Biller is significant; in the appropriate market, it sells itself.

Location and Facilities

The sales office for the Automated Biller is in Upland, California. Upland is 4 miles away from Ontario International Airport, ( 40 miles north east of Los Angeles, California) which would make it easy for staff to travel to provide System installation and on-site training. The entire Automated Biller staff is located in various part of the country; the sales office location promotes good communication between the technical staff and company administrators.