HPS unites, simplifies medical bills

Company hopes to take service beyond state

Health Payment Systems was founded on a simple idea: People would be more likely to pay their medical bills — and pay them sooner — if they received one, easy-to-understand bill.

End up in a hospital emergency department and you may get bills from the hospital, the emergency physicians and a radiologist — and that may not be a complete list. Have a serious illness or injury and you can get a seemingly endless series of bills for an indecipherable array of medical services.

At the same time, you are getting statements known as an “explanation of benefits” from your health plan.

Maybe you pay one or two of the bills. They keep coming. You have no idea what you’ve paid and haven’t paid. You give up. Or maybe you simply don’t pay any of them, figuring the best course is to wait until you can make sense of them.

“We get rid of all that,” said Beth Griffin, chief marketing and product officer of Health Payment Systems.

Giving people one, easy-tounderstand bill, though, isn’t easily done in the world’s most complex health care system.

Health Payment Systems, or HPS, employs more than 70 people in downtown Milwaukee. They include about 35 people who work in information technology. The company also holds several patents. And, at its core, Health Payment Systems is a technology company.

The company was founded in 2005, and as with many startups, its business plan has evolved. But it has had the good fortune to have investors with patience and deep pockets.

Health Payment Systems provides its service, which is sold by insurance brokers, to employers who self-insure, or pay most of the medical bills of employees and their family members. That includes most employers with 200 or more employees, as well as many smaller employers. It makes money in two ways. First, it contracts with health systems, physician practices and other providers to pay the medical bills of the people in an employer’s health plan promptly and in full, including the employee’s deductible.

That spares the health system and other providers from the expense of sending out multiple bills — by one estimate, a health system sends an average of 3.3 bills before getting paid, according to the company. It also reduces bad debt from unpaid bills. And it improves customer service.

In exchange, Health Payment Systems receives a fee, or discount, on the amount owed.

Second, Health Payment Systems receives a fee from the employer. The advantage for the employer is its human resources department doesn’t have to field calls from frustrated employees who can’t make sense of their medical bills.

Health Payment Systems basically assumes the risk that the employee will pay his or her deductible. The company has its own actuaries to estimate what percent of the bills will be uncollected. But the company was founded on the belief that people will be more likely to pay their medical bills if given bills they can actually understand.

The consolidated bill also is combined with the explanation of what the health plan covers.

“It’s all one document,” said Griffin, who has worked for Metavante, Mastercard and Op-

tum, part of UnitedHealth Group.

People also can call the company’s customer service department if they have question.

The bill itself is designed to look like a credit card statement. The first page is a summary. The second page contains information on the medical claims. The third page goes into more detail.

People also can go online to get more detail, such as what a test was for — though the company’s technology cannot yet provide simple translations of the arcane medical codes used for billing.

In recent years, health systems have worked to simplify their bills. And the statements from health plans that explain what’s covered have become easier to understand. The problem is the multiple bills from hospitals, physicians and other providers.

“That’s part of the confusion that’s created by the current system,” said Terry Rowinski, president and chief operating officer of Health Payment Systems.

More than a few people with serious illnesses have cardboard boxes in which they toss their

medical bills — Rowinski pulls out a box of bills for demonstrations of the company’s service.

“And ultimately the patient and family suffers,” Rowinski said.

The challenge is that Health Payment Systems has to negotiate contracts with the health systems, physicians, labs and other providers in a health plan’s network. That’s important because the billing systems must be programmed to not automatically send out bills.

It also was an obstacle to the company’s initial plans to expand nationally. The company had to create its own network in Wisconsin to prove its technology.

Several hundred employers in the state are customers of Health Payment Systems, Rowinski said. And about 70,000 people are covered by health plans that use its service.

“Our sales cycle is long, but once they are in, they are all in,” said Rowinski, who previously was chief operating officer of BuySeasons Inc. in New Berlin.

But creating its own network was easier to do in Wisconsin, where the market is dominated by integrated health care systems. Taking it outside the state proved to be much harder.

The market wasn’t ready for the company’s service 10 years ago.

Health plans also had smaller deductibles.

The company believes that now has changed.

Health Payment Systems hopes to have agreements with customers outside Wisconsin by the end of this year, Rowinski said.

It sees a potential market in what are known as accountable care organizations, in which a health system or network of providers agrees to provide care for a set number of patients for a fixed amount. The organizations didn’t exist 10 years ago.

Another potential market is health plans owned by health systems. Health Payment Systems hopes to integrate its technology with their networks, Griffin said.

The company has had a decade to improve that technology and test its business model. It has been marketing its service at events held by industry trade groups, such as the Healthcare Information and Management Systems Society and the Healthcare Financial Management Association.

Now comes a key test. But Health Payment Systems has some confidence that its service benefits health care providers, employers — and patients.

“We are the only ones,” Griffin said, “who do what we do.”