Study on Healthcare Payments Processing Re-Enforces EOB Opportunity

The study was commissioned by Orbograph and conducted by BroadTrust.

Great quote from VP of Marketing Joe Gregory in press release that came out today: “There appears to be a paradox in the industry. One half of the respondents were still processing 25% paper and the overall electronic payment penetration is estimated to be near 60%. Meanwhile, satisfaction levels toward EDI adoption with hospital revenue cycle managers are 91%! There is a clear disconnect between expectations of industry influencers and actual achievements.”

If you remember, I came away from the recent IOFM Payments Summit with a feeling that there is a big opportunity in capturing paper EOBs when combined with the right additional processes - mainly in the area of payment processing. I think the results of this study re-enforce that view.

Great ideas that transform paper-burdened operations to fully automated platforms need greater visibility,” - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

"Great ideas that transform paper-burdened operations to fully automated platforms need greater visibility,” said John Casillas, CEO of BoardTrust.

"The data affirms that there is still a lot of untapped value in transforming revenue cycle operations from paper-based to digital processing. Our action item from this survey is to develop additional educational programs on the benefits of electronification and methods to achieve straight-through-processing of payments and remittances," added Barry Cohen, co-president of Orbograph.

The 2014 Strategic Healthcare Payments Research Initiative is available on the Orbograph website, and can be downloaded at www.orbograph.com/ 2014-strategic-healthcare-payments-research-initiative.htm. - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

The 2014 Strategic Healthcare Payments Research Initiative is available on the Orbograph website.

When leaders of organizations are willing to throw

“there appears to be a paradox in the industry. One half of the respondents were still processing 25% paper and the overall electronic payment penetration is estimated to be near 60%. Meanwhile, satisfaction levels toward EDI adoption with hospital revenue cycle managers are 91%! There is a clear disconnect between expectations of industry influencers and actual achievements.” - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

“there appears to be a paradox in the industry. One half of the respondents were still processing 25% paper and the overall electronic payment penetration is estimated to be near 60%. Meanwhile, satisfaction levels toward EDI adoption with hospital revenue cycle managers are 91%! There is a clear disconnect between expectations of industry influencers and actual achievements.” - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

“there appears to be a paradox in the industry. One half of the respondents were still processing 25% paper and the overall electronic payment penetration is estimated to be near 60%. Meanwhile, satisfaction levels toward EDI adoption with hospital revenue cycle managers are 91%! There is a clear disconnect between expectations of industry influencers and actual achievements.” - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

“there appears to be a paradox in the industry. One half of the respondents were still processing 25% paper and the overall electronic payment penetration is estimated to be near 60%. Meanwhile, satisfaction levels toward EDI adoption with hospital revenue cycle managers are 91%! There is a clear disconnect between expectations of industry influencers and actual achievements.” - See more at: http://www.orbograph.com/orbograph-underwrites-2014-strategic-healthcare-payments-research-initiative.htm#sthash.0EOnFcrI.dpuf

Lexmark, Hyland, ReadSoft Update

Here's what's going on:

1. Last month, Lexmark bid $182M to acquire Swedish-based document capture ISV ReadSoft.
2. ReadSoft's board unanimously recommended that shareholders accept the bid, which represented a 118% percent premium over ReadSoft's share value on the NASDAQ OMX Stockholm at the time.
3. Despite this high premium over ReadSoft's share value, DIR speculated that the offer seemed relatively low for a capture ISV with $117M in annual revenue.
3. The acceptance period for the offer was scheduled to end on this upcoming Monday, June 23.
4. There was a provision that ReadSoft could consider another offer if it was more than 7% higher than Lexmark's offer.
5. DIR speculated that an ECM ISV like Open Text (which competes with ReadSoft in the SAP invoice processing space) might think $195M is still a bargain, although ReadSoft management countered that there was more to the purchase agreement than just getting the highest price.
6. Yesterday, June 18, Hyland Software, which competes with Open Text in the ECM space, announced a bid of approximately $198M for ReadSoft.
7. According to industry analyst Harvey Spencer, the bid made sense for both sides for a number of reasons. "Hyland has almost no presence in mainland Europe to speak of and ReadSoft would definitely help them with that," he told me. "And Hyland's strong vertical market position in healthcare does not translate to the European market. If they want to expand in Europe, Hyland needs to find new markets and leveraging ReadSoft to increase their presence in the SAP space would be one way to do that."
8. Today, Lexmark up its offer slightly to approximately $200M. According to a WSJ story, "Lexmark's tender offer, which requires acceptance by more than 90% of ReadSoft's shares outstanding, was extended to July 14."
9. Once again, the ReadSoft board unanimously recommends that shareholders accept Lexmark's offer. It's unclear if, for any additional offers to be considered, they need to trump Lexmark's current bid by 7%, which would still only represent a $214M offer, or less than 2x ReadSoft current revenue. - According to Johan Holmqvist, VP, Corporate Communications, ReadSoft, "Hyland or another bidder, need to increase the [new] Lexmark offer of 43 SEK with 7% in order for the Board to consider it/be able to recommend it."

Follow-up on IOFM Payments Summit

Two weeks ago I had the opportunity to attend the second IOFM Payments Summit in Baltimore. As detailed in an article in last week's DIR, I left with two major takeaways for our industry from the event, which was attended by 230 people - a 70% increase over attendance at last fall's inaugural Payments Summit. Here is a condensed version of what we wrote (let me know if you'd like to see the full article):

• Automated EOB capture is very much alive and well in the payment processing space: There was a time when we believed that EOB capture might be the second killer app in the IDR (intelligent document recognition space) behind invoice capture. In the document capture market that idea came and went as ISVs struggled to gain a significant number of installs.
  
  What many in our industry failed to recognize is that like capturing invoices, capturing EOBs is more than just an OCR/data entry operation. EOBs are part of a healthcare billing process and EOB capture must be addressed as part of that process. Improving payment processing in healthcare through technology is currently a hot market and EOB capture is a part of this. However, it’s often not the traditional ECM players that are supplying these solutions. Rather it’s the payment processing organizations, banks, and lockbox providers (and ISVs that sell to them), that are stepping up because of their experience with receivables.
  
  That said, I'm not sure how good some of their automated EOB capture technology is, as a lot of it is homegrown by the payment processing ISVs. Clearly, it's better than not using any OCR at all, but when Orbograph's Bryan Bruton told me about the recognition improvements his start-up gained after it was acquired by Orbograph, it got me thinking that there may be opportunity out there for other document recognition specialists to license their EOB capture to some of these payment processing specialists.
  
• Payment processing organizations are struggling with the increasing trend toward electronic payments:  The general consensus is that it is the easier-to-process payments, like utility bills, that are moving online first, but there is also a desire by organizations to utilize imagng on a greater variety of documents. The result a dichotomy in the payments market as related to imaging. On one side, paper payments are decreasing. On the other side, more organizations than ever are recognizing the value in digitizing their transactional documents as soon as possible to transition from paper to electronic workflows. So, while imaging of traditional remittance payments may be on the decline, imaging in general is on the upswing. And payment processors that can address a greater variety of imaging applications, including full page capture and workflow, appear to be emerging as the winners--which represents another opportunity for traditional document capture vendors to sell into the payments processing space.
  
  
  
   

K2 and TIS Team up for SPAs

Remember when we all thought Kofax was going to be SharePoint BPM specialist K2? Well, that was the rumor floating around at least until Kofax announced it was actually going to buy Singularity, a smaller competitor in the same space. Kofax went on to leverage the K2 platform to create Total Agility 7, its new platform for deploying smart process applications (SPAs) designed to connect front-end systems of engagement effectively with back-end systems of record.

In the meantime, it appears that a relationship has percolated between K2 and Top Image Systems, which competes with Kofax in the document capture market. K2 and Top Image apparently already have 10 joint customers and yesterday announced a strategic partnership. They are billing their combined technologies as a way to create SPAs. Apparently they have already had success in Europe and Asia-Pac in applications like the digital mailroom. According to the press release, "Joint customers are able to automatically process millions of documents per year with virtually no human intervention.  The solutions deliver information to the right people at the right time, with everything needed to make smart decisions."

Top Image exhibited at the recent K2 User Conference. Said, Michael Schrader, Top Image Systems COO. "After seeing success with our joint solutions in Asia-Pacific and EMEA, we are looking forward to expanding that success to North America."