Executive Interview with Jay Fulkerson

technology. The Mill Girl spoke with Fulkerson about what the company is doing to solve the big, messy billing problem that dominates health care. For providers, employers and consumers alike, the current claims process is confusing, burdensome and intimidating.   I didn’t care about billing and reimbursement until I experienced it for myself after being a patient. Now, I’m getting “Please pay” and “Do not pay” notices from two insurance companies and a wide variety of providers, possibly unknown and unmet. At first, I read and saved each document, but with so many pieces of paper, I started stashing them in the space between my two-drawer credenza and an empty DJ Orthopedic brace box — that way if I ever have to reconcile something, I’ll know where it might be.  I call it the Paper Tower, and eight months later, it’s still growing. 

I’m not the only one with a paper tower. It’s something each of us deals with at some point or another, so let’s see what Fulkerson recommends as an alternative to the confusion.

The Mill Girl: Tell us about Health Payment Systems.

Fulkerson: Health Payment Systems is a unique business. Since our founding in 2005, we’ve used patented technology to streamline health care billing and collection in several ways:

• Providers receive a single electronic payment from HPS for both the benefit plan and patient portions of a bill.

• Employers save money because HPS passes along savings it secures from providers.

• Families receive one monthly statement called a Super EOB (explanation of benefits) that includes health care services from all HPS providers, for all family members.

Our patented technology does something nobody else is doing in the marketplace. It speaks very well to both physicians, hospital chief financial officers and billing staff, and to moms, who often are the ones struggling with the current claims mess for their families.

Here’s another way of looking at it: I always think about Christmas shopping at the mall. If I had to write a check at every store, I wouldn’t go shopping!  HPS acts a little like a credit card to synthesize everything in one place. Look at how we use smartphones for everything — payments, orders, order tracking, the works. But not in health care. It’s still all about paper, duplication, confusion. The cost of a 20-minute office visit has gone up, and one factor is the cost of the current billing process, including bad debt and duplication of bills and explanations of benefits. HPS technology replaces the current mess with one single bill, one payment and support to answer questions about any of the claims on the Super EOB.

The Mill Girl: How did HPS come about?

Fulkerson: One of our founders, Jim Brindley, is an attorney with a background in the area of new product development for the financial services industry. Unfortunately, Jim was diagnosed with cancer awhile back and spent more than a year in the health care arena. The good news is the cancer was caught early, and he’s here working at HPS today. But the bills and explanations of benefits for his treatment filled an office! Jim believed a single credit card-like statement would make the process better for the patient, as well as the provider, and HPS was born in 2005.

When I was first introduced to HPS, it sounded too good to be true. My own experience with managing surgery bills from multiple providers, plus my experience leading health insurance companies, told me the core concept held significant value for patients, payers and providers. In the current claims process, providers send bills to insurers and send statements to patients once the plan portion has been paid. In my case, nine different health care providers sent me statements for one episode of care. The waste and duplication was easy to see. Trying to resolve questions caused a lot of headaches.

The other key issue for providers is the time frame for payment. Under the conventional process, it takes an average of more than 100 days, and as long as six months, for providers to receive full payment. The single payment process from HPS pays providers in full within 20 business days, with no need to deal with the patient regarding anything but the care they provided.

The Mill Girl: Sounds painfully familiar!

Fulkerson: With HPS, the process is simplified for the patient; providers focus their time and attention on patient care, not billing and collection, and we support removing waste, which enhances the providers’ bottom line. The key for the health care system is to reduce unnecessary costs due to the critical need to lower overall costs of care. The entire current billing and collection process is broken and provides no value. With HPS, the provider wins with a single full payment for a service rendered; the patient wins with a single bill and one-call support for billing questions; the employer wins with happy employees who spend less time on unnecessary work.

We connect electronically with providers (to get claims) and with TPAs (to adjudicate claims) to simplify the process. Then, we send the provider a single electronic payment for both the payer’s and patient’s portion of a claim — within 20 days. The patient receives one monthly statement for all services and writes one check to us for everything not covered.

Here’s the other cool thing. Back when I injured my knee, somebody sent me a radiology bill, but I had never heard of that doctor. Have you ever tried to call radiology? Instead, now patients have an advocate — HPS makes the phone calls; we do the investigation.

The Mill Girl: What are you trying to accomplish with this new approach?

Fulkerson: We want to fundamentally change the way health care is paid for. Take a look at our animated YouTube video, and you’ll see a fictional family called the Wrights. Our goal is to make it easier for Karen Wright, the mom, to manage claims for her family. If we can do that, she becomes a happier, more informed patient; her employer answers fewer frustrated questions from her as she’s trying to understand her claims; and her doctor can focus on her care, not the collection process.

The Mill Girl: Talk more about the employer side of what you mentioned.

Fulkerson: Employers are trying to find that balance between managing claims costs and doing right by their employees. It’s tough. Employer expenses continue to increase.

Click here to see supporting evidence provided by The Henry J. Kaiser Family Foundation.

HPS can be a powerful tool in helping them simplify and reduce claims administration costs by taking out the waste.

If there’s truth in I’m what hearing from employers, they have shifted more responsibility to the patient — the Karen Wrights of the world — so we’ve designed our technology and the Super EOB to help from Karen’s perspective, as well.

Finally, for provider systems — who also are employers in their own right — claims administration can cost them from 2 to 3 percent to do billing and collections, plus the money they never receive, written off as bad debt or charity care. That’s why our single payment approach has been so valuable for them.

The Mill Girl: How long did it take for HPS to create this solution?

Fulkerson: For the software, it took three years. We started in development in 2005 and went live in 2008. One of our business challenges as a technology company is helping insurers and TPAs see the benefits of embedding our technology. It would be a game changer offering them differentiating value.

The Mill Girl: So what is holding the big insurers back from streamlining?

Fulkerson: The pressure on the health care system is higher than ever before. Medicare and Medicaid face daunting pressures, and the Affordable Care Act continues to bring significant changes. HPS billing technology requires additional changes to current processes, which must compete for the same resources being used to respond to all of the above challenges. From a payment perspective, if 100 percent of patients used the single payment system, we could make all of the changes at once and turn the ship. Unfortunately, health care systems have patients who don’t have access today, which then requires insurers and providers to follow the current processes, as well. Over time, I believe payers will see the value as providers begin to require single payment to receive their best price. Once that occurs, payers will need to consider these changes or face higher costs in the marketplace than competitors that do use the HPS technology to pay their claims.

The Mill Girl: Of all the challenges facing providers with billing, what's the worst and most expensive one?

Fulkerson: The worst thing about this is the brand-damaging experience the patient encounters. For most hospitals, when they survey right after the patient experience, the physicians get high marks, but if they wait one or two billing cycles, the results drop because of the inherent mess and confusion of the current claims process.

In our markets, we hear, “It’s all about the patient experience.” If there are two competing health systems wanting patients and employers to choose them, as a hospital CEO, you don’t want to be chosen because you are the cheapest! You want to be picked because your offering is the best patient value. Economics is important, but it’s not the endgame — the patient’s experience will matter. Our technology helps reduce costs and enhances provider brand reputation.

The Mill Girl: What does this business model do to reduce health care costs?

Fulkerson: If health care costs are 17 percent of the gross domestic product today and all of the focus is on the increased demand from an aging population, plus the amazing new technologies being rolled out every year, it is critical that we don’t waste a penny. Our estimate is that providers spend 2 percent of health care bills on billing and collection and write off, on average, 50 percent of the outstanding balance owed to them by the patient after insurance pays their portion.

The insurer also spends another 1 to 2 percent on processing explanations of benefits and answering member calls about bills they receive. If by using the HPS technology the system could save 2 percent, that would be huge. The forecast I have seen is for us to spend $4 trillion on health care by the end of 2015. If we could save 2 percent of that, it is almost mandatory that we find a way to do it, in my opinion. We believe as more providers and payers adopt the single payment model, our cost of providing the technology will go down, which adds more savings to the total. There’s no doubt there are huge cost reduction opportunities in the claims administration process to take out these unnecessary costs from duplication and mistakes. It’s just a matter of time.  

Jay Fulkerson is president and CEO of Health Payment Systems (HPS), a claims technology company with headquarters in Milwaukee. He has 25 years of executive management experience in the health care industry. Prior to his role at HPS, Fulkerson served as CEO of Touchpoint Health Plan in northeast Wisconsin and, following the acquisition of Touchpoint by UnitedHealthcare, served as CEO for Wisconsin and then as regional CEO for UnitedHealthcare’s Midwest Region. Fulkerson joined Health Payment Systems in 2011 after a stint as vice president at Alta Resources, an outsourcing company, in Neenah, WI.

Named by Fortune magazine a "Pioneering Woman in Manufacturing," Patricia E. Moody, The Mill Girl at Blue Heron Journal, tricia@patriciaemoody.com, is a business visionary, author of 14 business books and hundreds of features. A manufacturing and supply management consultant for more than 30 years, her client list includes Fortune 100 companies as well as start-ups. She is the publisher of Blue Heron Journal, where she created the Made In The Americas (sm), the Education for Innovation (sm) and the Paging Dr. Lean series. Her next book about the future of manufacturing is The Third Industrial Revolution. Copyright Patricia E. Moody 2013. All rights reserved.