Latest / CareTalk: Healthcare. Unfiltered. / Can Healthcare Claims Be Adjudicated in Real-Time? w/ Don Peterson, Founder & CEO, PIM Health

Transcript

Can Healthcare Claims Be Adjudicated in Real-Time? w/ Don Peterson, Founder & CEO, PIM Health · CareTalk: Healthcare. Unfiltered.

• 0:00
  David: American hospitals now spend nearly$2 on administrative overhead for every dollar that touches direct patient care.
• 0:07
  David: Insurers profit from that delay, and providers wait months to get paid.
• 0:12
  David: Patients open bills weeks after they've forgotten the visit.
• 0:15
  David: But what if claims could be adjudicated with the patient still in the chair?
• 0:19
  David: With CMS launching the most ambitious value-based care program in its history in January 2027, the window to reset healthcare's payment plumbing is open right now.
• 0:37
  David: Welcome to CareTalk Executive Features, a series where we spotlight innovative companies and leaders working to advance the healthcare field.
• 0:44
  David: I'm David Williams, president of Health Business Group, and my guest today is Don Peterson.
• 0:48
  David: He's founder and executive chairman of PIM Holdings and the founder of IVX Health.
• 0:53
  David: His thesis is uncomfortable but simple: healthcare payments aren't broken by accident.
• 0:58
  David: They're working exactly as designed, and he's building the infrastructure to redesign them.
• 1:03
  David: Don, welcome to CareTalk.
• 1:06
  David: David, thank you for having me.
• 1:07
  David: Appreciate it.
• 1:08
  David: Good to be here.
• 1:10
  David: I wonder if you can explain what's broken about how healthcare gets paid for today, and if it's broken, why no one's bothered to fix it.
• 1:20
  Don: That's a great question.
• 1:21
  Don: So let me give a, a brief story to explain why.
• 1:26
  Don: So when I started IVX Health in 2013, we had the greatest beginning of any company ever.
• 1:34
  Don: We were growing 20 to 30% a quarter, and we couldn't stop patients from coming.
• 1:39
  Don: It was just a, a wonderful thing.
• 1:42
  Don: The problem was I had to buy drugs for all these patients, and it took me a lot of capital to do that, and then the reimbursements for those drugs I had to buy could take, well, generally 30 to 40 days to collect.
• 1:57
  Don: Well, some patients were coming every two weeks.
• 1:59
  Don: Some were coming every four weeks.
• 2:00
  Don: So oftentimes, I had to buy the drugs for two or three rounds of patient care before I got reimbursed for the first round.
• 2:07
  Don: So what happened?
• 2:08
  Don: I had to go to the bank and borrow money, and a lot of it.
• 2:12
  Don: And what was, well, difficult about that was I was pledging my personal assets against $2 or $3 million in guarantees for the money that I needed just to pay for the drugs for the patients who were coming in.
• 2:26
  Don: But where was that money?
• 2:27
  Don: Why didn't I have it?
• 2:29
  Don: Because the payers were sitting on it.
• 2:31
  Don: They had no incentive to pay me any quicker than, than they wanted to.
• 2:35
  Don: And thus, as a provider organization, I had to go to the bank and borrow money to accommodate their Well, decision to slow pay.
• 2:44
  Don: And while I'm, I'm not here to name vic- uh, victims or villains, I just felt like if we could come up with a way to get providers paid in near real time, how would that change the industry?
• 2:56
  Don: And we think it would change it in a significant way.
• 2:59
  Don: And so when many people see what we do at PIM, they think that we are a provider-based benefit organization trying to help providers only, and that's really not the case.
• 3:09
  Don: Providers benefit from what we do, but we actually work with the payers.
• 3:13
  Don: Our job is to make sure that the payer has an adjudicated claim, a deterministic event where a patient has come in, seen a doctor, and that claim is looked at in immediate, in an immediate fashion and paid almost immediately.
• 3:28
  Don: Now, realistically, we can't do that in every case.
• 3:31
  Don: What we think we can do that in about 70% of cases, where most of healthcare at 70% is pretty routine.
• 3:38
  Don: And so for those routine, um, episodes of care, we think the provider should get paid in near real time.
• 3:45
  Don: So they submit the claim.
• 3:47
  Don: The next day or two, just like a credit card settlement, they get paid, and that would change the economic, um, and fiscal stability of independent practices in a very significant way.
• 4:00
  Don: And it would have for me back in the days when we fir- first started IVX, and I believe it would help every provider today the same way.
• 4:08
  David: Very, very interesting, and I'm, I'm looking forward to digging in, and especially when we get to the point about how it's, uh, not necessarily a zero-sum game, uh, in that sense.
• 4:16
  David: So one of the things that you've talked about and are clearly getting at here is about how float is one of the most under-discussed profit drivers in American healthcare.
• 4:25
  David: And it seems to me like, you know, insurers have no real incentive to pay faster because as they're sitting on a claim day to day, they're earning interest on that, on those funds that are actually really technically belonging to the provider.
• 4:37
  David: So I'm wondering, when we talk about float, I get the concept, but how big is the pool, and why would it be a problem just to, to fix it?
• 4:46
  Don: Well, if you think about it, you know, the major insurance companies who are the typical payer that we think about, United and Cigna, Aetna, you know, everybody else, they're collecting a premium from whoever's paying that premium, whether it's the individual or their company or, you know, somebody else.
• 5:05
  Don: And the longer they get to sit on that premium before they have to pay a provider for whatever healthcare services the patient accessed- Well, there's interest to be earned on that, and when you think about what's now, what, close to a $5 trillion business, you have to ask yourself how many billions of dollars are they actually sitting on?
• 5:24
  Don: And what's the overnight, you know, um, interest payments that they're getting for sitting on that money for two or three or four weeks if they can?
• 5:33
  Don: And again, it's, it's not an irrational thing.
• 5:36
  Don: It's not a mean thing to be doing.
• 5:38
  Don: It's what the system supports, and there's no law against what they're doing.
• 5:42
  Don: And so, you know, again, I'm not here to name, you know, villains of any kind.
• 5:46
  Don: They're acting as any rational player would act, and they have shareholders.
• 5:50
  Don: You know, they're, they're trying to return a profit.
• 5:51
  Don: Well, there's profit in sitting on that money.
• 5:54
  Don: And when we talk about money, we're talking about billions of dollars in interest payments that drop to their bottom line 'cause it doesn't cost them anything to c- to collect that interest money.
• 6:04
  Don: They just have to sit on the hundreds of billions of dollars in premium money before they pay a provider in order to collect that interest, so
• 6:13
  David: they do.
• 6:15
  David: So I'm trying to imagine what it looks like in a patient encounter when claims are adjudicated in real time.
• 6:21
  David: What does that look like compared to your typical situation today?
• 6:26
  Don: Yeah.
• 6:26
  Don: My, my own daughter asked me this question 'cause she's a certified professional coder.
• 6:30
  Don: She works for a EMR software company, and she said, you know,"Dad, how is that gonna be?
• 6:35
  Don: How are you gonna make that work?" I said, "Well, they would have to close the chart as the episode of care is closing out." So while the patient is still there, before they walk from the exam room to the checkout counter to schedule their next appointment or typically pay a bill, we can traffic that claim through the clearing house to us, adjudicate it within 10 seconds, and return to the provider the remittance advice that they have typically waited 30 to 40 days sometimes to get.
• 7:06
  Don: We can do that in a matter of minutes, if not seconds.
• 7:09
  Don: And so before the patient hits the parking lot, they know exactly what they owe for that episode of care, not just the copay, but their co-insurance as well or whatever out-of-pocket they would have to pay.
• 7:21
  Don: And that allows the provider to collect from that patient before they leave the office.
• 7:25
  Don: Now, as you asked, you know, we have to close the charts in near real time or at the close of that episode of care.
• 7:32
  Don: Everybody wants to do that.
• 7:33
  Don: That's an aspirational thing that I think every provider organization would like to be doing.
• 7:38
  Don: Do they?
• 7:39
  Don: Mm, not so much.
• 7:41
  Don: But if we said, "But we're gonna pay you tomorrow if you close it today," where would the incentive be?
• 7:48
  Don: To close it, right?
• 7:50
  Don: So, you know, we don't expect behavior or workflows to change overnight.
• 7:54
  Don: We know it's gonna take some time for people to adapt to it, but the incentive is there to adapt to it.
• 7:59
  Don: Right now, there's no incentive.
• 8:01
  Don: Doctors can wait days, sometimes weeks before they actually get around to charting.
• 8:05
  Don: As you know, they, you know, either they do it in the evening or they do it on the weekends.
• 8:08
  Don: And, you know, I know doctors who have privileges at hospitals, and they f- well, sometimes forget to close the charts, and the doctors have to threaten them with their privileges in order to get them in there to close the charts out.
• 8:19
  Don: So, you know, we know that goes on, and so we know that some workflow is gonna have to change.
• 8:25
  Don: But the aspiration of closing charts in real time already exists.
• 8:29
  Don: Now they have a real monetary incentive to do it.
• 8:33
  David: Let's talk about everyone's favorite topic, which is prior authorization.
• 8:38
  David: Mm-hmm.
• 8:38
  David: Really one of, if not the most hated aspect of the American medicine system.
• 8:43
  David: Yeah.
• 8:43
  David: Mm-hmm.
• 8:43
  David: Uh, I know the American Medical Association has done some surveys showing that, you know, there's dozens of PAs per week per physician taking a, a ton of staff time, which is expensive.
• 8:53
  David: Yeah.
• 8:54
  David: So how does this tie in, you know, real-time adjudication and prior authorization?
• 8:59
  David: How do those tie together?
• 9:00
  Don: So what we would propose to do, and we would certainly want the payer's agreement on this, is that we eliminate prior auths as they currently exist altogether.
• 9:11
  Don: Well, how do you do that?
• 9:12
  Don: You do that by having the physician and their credentials personally attest to the medical necessity of what they're planning to do using evidence-based practice and other, you know, um, medical requirements that they have.
• 9:27
  Don: And even if the payer has step therapy requirements in between, if we know what that is, then we can adjudicate against that.
• 9:34
  Don: And in our real-time world, what we would try to do in most cases is clear any medical necessity concern in real time.
• 9:46
  Don: So as long as the, the physician attests to it, as long as we know it's not some crazy thing that they have never done before or there's not enough evidence to support what they're trying to do, we can approve that in real time, thus approving the claim and adjudicating the claim in real time as well.
• 10:05
  Don: There will be cases where we're gonna have to flag a, a, a claim and say, "Hmm, we didn't have enough information on this, Doc. You're gonna have to submit some peer-reviewed articles or whatever it is to make sure that we understand why you're doing this." Maybe it's an off-label use or some experimental treatment.
• 10:20
  Don: And, and that's okay because now instead of prior auths being, well- Required of everything or a lot of things, it's only exceptions where that would be required.
• 10:30
  Don: And again, the current system is, well, it treats every prior auth like it's an exception, when in fact there's only a handful of them that actually are exceptions.
• 10:38
  Don: And of course, we would have to treat the exceptions as we do, but as an exception, not the rule, and that's where we would differ.
• 10:46
  Don: So again, when I say that we could probably clear 70% of claims in real time, that includes those prior auths where we say, "Whoa, whoa, whoa, stop a second. We need to, you know, take another look at this or a harder look at this before we approve it."
• 10:59
  David: Makes good sense.
• 11:00
  David: Now, it doesn't seem like, uh, New Year's Eve is right around the corner for 2027, but if you're planning ahead, it, it certainly is.
• 11:08
  David: And there are some new models coming out from CMS, some new deadlines.
• 11:11
  David: Uh, there's a CMS- Yeah … LEAD model that's launching in January.
• 11:15
  David: Uh, what is that, and what sort of opportunities are you seeing for PIM?
• 11:21
  Don: Well, I think in our case, we've already baked into our most recent provisional patent filing all of the value-based care programs, including LEAD, uh, in that, in that, uh, in that patent application because LEAD has a 10-year, um, track window based, you know, on that.
• 11:39
  Don: Well, there's not a system in the world today that can do a 10-year track.
• 11:42
  Don: They just can't.
• 11:43
  Don: And the way that they typically do these kinds of things is, this is from a provider perspective first, let me give you that.
• 11:50
  Don: Provider signs up for these things, they cross their fingers and toes, and they hope at the end of the period things worked out well because they see little data in between, right?
• 12:00
  Don: Who's actually tracking for them?
• 12:02
  Don: How they're tracking against these value-based care programs, especially when there's a capitated amount you receive, and there's certain things you bill fee for service and, you know, it's a lot of stuff to gather up and try to manage.
• 12:15
  Don: And of course, as you know, you can't manage what you can't measure.
• 12:19
  Don: So if they're not able to see the data, then, you know, they're already disadvantaged.
• 12:24
  Don: And so our system would give them real-time visibility into every claim that's adjudicated against a value-based care program with the metrics against that program baked into that report.
• 12:37
  Don: So they can see in real time what they're doing, how they're doing, and, you know, look, if things aren't tracking well, then they do a better job.
• 12:43
  Don: You know, if things are tracking well, then okay, you know, set it and forget it.
• 12:47
  Don: Um, but no matter what the program, whether it's, you know, the, um, earlier programs that are mixed, you know, capitated and, and, and fee for service or LEAD, which is, I think, fully capitated, um, it doesn't matter because it still, it goes against the accumulator state of every patient who's in the program, and we report on that, you know, pretty readily and, um, in real time as best we can.
• 13:11
  Don: And so again, the provider has the visibility they need to manage the programs that they've signed up for, and that's an important Part of it.
• 13:20
  Don: You know, right, 'cause like, like I said, right now, uh, the ACOs and others, they're, they're crossing their fingers and toes and hoping for the best, and at the end of the year, they take a look at it and they go, "Oh, we didn't do so well." And now you can't do anything about it 'cause, well, you were driving the bus looking out the back window.
• 13:36
  Don: Too late now.
• 13:39
  David: I mentioned a very striking figure in my introduction about, uh, the ratio of administrative costs in hospitals anyway to direct patient care, something like two to one, and that's from, uh, Trilliant Health citing that number.
• 13:51
  David: There are other studies talking about administrative waste in the system in the hundreds of billions of dollars.
• 13:57
  David: Yeah.
• 13:57
  David: Do you buy into those numbers?
• 13:58
  David: And, and how much do you think PIM could take out?
• 14:03
  Don: Well, there's a difference, I think, between waste and then administrative efficiency too.
• 14:08
  Don: So yes, there's waste in the system because not everybody, not every EMR, not every, you know, component of what we do is efficient and efficiently handled.
• 14:17
  Don: You know, I've, I've been involved with rural hospitals, and it's very difficult to, um, today, in today's world to export the kind of competency it takes to run a very, you know, solid and efficient revenue cycle system.
• 14:32
  Don: Um, with PIM, we believe because all the practice has to do is submit the claim, and we take care of everything else, where we eliminate the denials and the appeals and the things like that that go with it, where every episode of care is basically determined, we call it deterministic in, in software speak, um, so that there is no post-episode negotiation over what gets paid or when it gets paid.
• 14:59
  Don: It's done.
• 15:00
  Don: That, that, that… It's like a, a credit card transaction.
• 15:02
  Don: You know, when you buy something on Amazon, you don't ever, ever worry that somebody's gonna send you a bill later and say, "Well, you know, we forgot to charge you for the packaging and, uh, so here's another bill for $10." That, that doesn't happen at Amazon.
• 15:14
  Don: Doesn't happen with credit cards, but it happens all the time with healthcare.
• 15:17
  Don: Why?
• 15:18
  Don: Because we let it.
• 15:20
  Don: Let's stop doing that.
• 15:21
  Don: Just we can eliminate that.
• 15:23
  Don: There's no need for that.
• 15:24
  Don: You know, why is, why does the denial happen after an episode of care?
• 15:29
  Don: Because somebody issued a local carrier determination that changed the way you code something between the time that the patient was seen last and the adjudication of their claim, which can take days or weeks.
• 15:41
  Don: Well, when a new requirement exists or is, is published and it affects claims that are already in the pipeline, those claims in the pipeline are gonna get rejected because why?
• 15:51
  Don: They no longer meet the new requirement.
• 15:53
  Don: But when they were submitted, there was no new requirement.
• 15:56
  Don: Well, that goes away.
• 15:57
  Don: We would just eliminate all of that.
• 15:58
  Don: And when you talk about inefficiency and waste, that's waste.
• 16:01
  Don: I mean, that's just totally wasted.
• 16:03
  Don: And, and it shouldn't happen that way.
• 16:05
  Don: Even Medicare, when they issue a new LCD or NCD, they only do it quarterly.
• 16:09
  Don: Why do the commercial insurances get to do it anytime they want to?
• 16:12
  Don: Any hour of any day.
• 16:14
  Don: Stop it.
• 16:15
  Don: Stop doing silly things like that.
• 16:16
  Don: So when we sit down with payers and we talk about… I mean, I, when I say payers, I'm talking about mostly regional health plans and, you know, self-insured employers.
• 16:24
  Don: We talk about these things.
• 16:26
  Don: Stop doing those silly things.
• 16:28
  Don: Don't let those silly things happen.
• 16:30
  Don: You want to issue a new, you know, local carrier determination?
• 16:33
  Don: Great, issue it, but it doesn't become effective till the first of the next quarter or maybe the next month.
• 16:38
  Don: I… You know, we can, we can granularize it, I guess, in some respects.
• 16:42
  Don: But in theory, we just tell them to stop doing the things that create the havoc, the chaos that we currently deal with.
• 16:50
  Don: It can be stopped.
• 16:51
  Don: It just takes discipline and,
• 16:53
  David: well, thoughtfulness.
• 16:55
  David: So here's maybe a follow-up question, uh, from your daughter.
• 16:58
  David: You know, with when the claims queue disappears, that means that there's a lot of work currently being done in billing, coding, appeals.
• 17:07
  David: Yeah.
• 17:07
  David: And so what does that look like for the current workforce?
• 17:10
  David: You know, which of course there's many, many people involved, uh, in that today.
• 17:14
  David: Yeah,
• 17:15
  Don: yeah.
• 17:15
  Don: Yeah, that was her first question.
• 17:16
  Don: It's like, "How many coders are you gonna put out of work?" I said, "Well, you know, Sam," her name is Samantha, I said, "What I would do with a really good coder, I'd put them in scheduling." You know, when a patient calls to make an appointment, they're gonna tell you why they want to come in, right?
• 17:29
  Don: Or you're gonna ask them, "Why do you want to come in?" "Oh, I have a sore throat." Okay, well, that starts the claim process right there.
• 17:34
  Don: A coder can say, "Okay, that's ICD blah, blah, blah," whatever it is.
• 17:37
  Don: I don't know what they are.
• 17:38
  Don: You know, and they start the episode of care right then and there before the patient even gets to the door.
• 17:43
  Don: And then when they walk in, what are you gonna do for a patient with a sore throat?
• 17:46
  Don: You're gonna do a throat swab.
• 17:47
  Don: You're gonna send it out to the lab.
• 17:50
  Don: You're gonna find out whether they have stress or strep throat or not, and then they're gonna call in and you're gonna call in an antibiotic or you're not, right?
• 17:57
  Don: But you're gonna call the patient back and, you know.
• 17:59
  Don: So there's a process to every one of these routine things.
• 18:02
  Don: And I said, if, if you put those people in scheduling, then the episode of care starts right then.
• 18:09
  Don: We don't need AI listeners and scribes and all these things, so that when the provider actually gets in the room with the patient, they already know why they're there.
• 18:18
  Don: The ICD-10 has already been set up.
• 18:20
  Don: The CPT codes that go with that are already listed.
• 18:24
  Don: Pick the ones that are appropriate for this particular episode and move on.
• 18:28
  Don: And when it's over, hand it back to the coder and say, "Okay, I'm done.
• 18:31
  Don: Close the chart.
• 18:33
  Don: Get paid tomorrow.
• 18:33
  Don: Let's be done with this." That's where I'd put them.
• 18:36
  Don: I mean, I… You know, even good billers, right?
• 18:38
  Don: They, they can be in scheduling too.
• 18:40
  Don: They could be at the front desk.
• 18:41
  Don: You know, the patient walks in, and you ask them why you're here.
• 18:44
  Don: Well, start coding right now, right?
• 18:46
  Don: So that's how I look at it.
• 18:48
  Don: Now, I know that's over s- that, that sounds simplistic.
• 18:50
  Don: It probably is.
• 18:52
  Don: You know, workflow changes in healthcare are, you know, it, it, it's, it's like trying to get a person who does, you know, factory work to change the way they do something.
• 19:00
  Don: Look, we, we don't expect all of that to happen overnight.
• 19:03
  Don: But again, we're putting the incentives in place that they'll want to And I, and I hope that's the case.
• 19:09
  Don: I, I, I really do.
• 19:11
  Don: If we're paying people in near real time, and the imp- payer's happier, the employer is happier, the employee is happier, everybody is getting something positive out of this, then we think these changes will… You know, we'll adapt to these changes because why?
• 19:29
  Don: The incentive's there.
• 19:31
  Don: Right
• 19:31
  David: now there's no incentive.
• 19:32
  David: It doesn't change anything.
• 19:34
  David: So if you look at some of the big, big players out there, some household names, Change Healthcare, Epic, you know, they're processing billions of transactions or they're have, you know, hundreds of millions of patients that are there.
• 19:47
  David: There's clearing houses that have thousands of customers.
• 19:50
  David: They run millions of claims, if not more.
• 19:52
  David: And I hear what you're saying, but I'm wondering what makes you think, you know, you can transform the system where there's already probably a lot of incentives to keep things just as they are.
• 20:02
  Don: Yeah.
• 20:03
  Don: Somebody used the analogy, they said, "Don, you're, you're trying to boil the ocean." And I said, "Well, yeah, maybe, but you know what? One sea at a time." You know, we're, we're not gonna take on the entire globe all at once.
• 20:15
  Don: You know, we see very progressive, um, self-insured employers who wanna get their hands around what they're paying for.
• 20:24
  Don: They want data.
• 20:26
  Don: They wanna manage things as they go.
• 20:28
  Don: They wanna make sure that their benefit design is being appropriately used and that their employees are getting the benefits that they require.
• 20:36
  Don: And frankly, you know, the, the Department of Labor and ERISA is gonna hold, start holding employers' feet to the fire for that kind of management, active management.
• 20:44
  Don: No longer are they gonna accept that you contracted away your fiduciary responsibility to an ASO or to a TPA.
• 20:50
  Don: They're not gonna accept that anymore.
• 20:53
  Don: And so we think that there are enough of those employers… And, you know, the, the, the, the self-in-insured employer is covering somewhere in the, about 110 million lives across the country now.
• 21:03
  Don: They're not small.
• 21:05
  Don: But no, we don't expect every employer to come over tomorrow.
• 21:07
  Don: So, right?
• 21:07
  Don: So, you know, if we start working with the most progressive employers, and we've talked to a lot of the coalition leaders and, you know, I talked to Paul Fronstin at, uh, the EBRI, the Employee Benefit, uh, Research Institute, and, you know, we're doing what we can to learn where the best entry point is, who's the best entry point, which of the coalition, which of the purchaser organizations make the most sense, who are progressive thinking, who want, who want change, and there's enough of them out there that I think we can get a toehold.
• 21:38
  Don: Well, when the industry begins to realize the benefits that we offer everybody across the board, I mean, patients, providers, payers, and, you know, everybody, I think then the momentum will start.
• 21:50
  Don: It's kinda like when I started IVX.
• 21:52
  Don: You know, we thought the hospitals would resist sending us patients.
• 21:55
  Don: They wanted to hold onto the, the, you know, the IV patients 'cause they, you know, they made good money doing it, and they do, and they did.
• 22:01
  Don: But you know, like I said earlier, we are still growing 20 to 30% a quarter in spite of that And so, yes, there'll be resistance on the part of the big household name payers that you mentioned.
• 22:12
  Don: Um, you know, they like the asymmetry in information.
• 22:15
  Don: They like the, well, the float that they, that they benefit from.
• 22:19
  Don: Um, I don't expect them to, you know, come over tomorrow.
• 22:23
  Don: Um, I think it's gonna be a battle.
• 22:24
  Don: Um, Senator Marshall, Roger Marshall said to me in a conversation one time, he said, "Don, I don't think you appreciate how much these guys are gonna hate you." And I said, "Well, you know, it's a fair statement.
• 22:35
  Don: Maybe I don't appreciate how much they're gonna hate me." But, you know, I hope in the long run they wake up one day and they say, "You know what?
• 22:43
  Don: PIM is right.
• 22:44
  Don: We've got to modernize the system.
• 22:46
  Don: We've got to make it better." I mean, when you're walking down the street in New York City and you're looking over your shoulder, um, you know you're doing something people don't like.
• 22:55
  Don: So the… you know, you gotta know.
• 22:57
  Don: You gotta know that, and then you've gotta react to it.
• 22:59
  Don: Will they react tomorrow?
• 23:00
  Don: No.
• 23:01
  Don: Will they react only because of us?
• 23:02
  Don: No.
• 23:03
  Don: But, you know, they'll react when they see momentum, and they'll, they'll jump on it.
• 23:08
  Don: I think they will.
• 23:09
  Don: But it could take five years, could take seven years.
• 23:10
  Don: I don't know.
• 23:12
  David: When you explained before how PIM benefits providers, I can, I can easily see that, right?
• 23:18
  David: They get paid faster, and there's maybe less that they need to spend in order to get there.
• 23:23
  David: But you're also talking or hi- at least hinting at more of a win-win or win-win-win.
• 23:28
  David: So you've got other players out there like self-insured employers, TPAs, ASOs, regional health plans, patients.
• 23:35
  David: Who else wins, and how do they, how do they win?
• 23:37
  David: And why is it not just a kinda zero sum where it goes, the value's going from the payer to the provider?
• 23:45
  Don: Yeah.
• 23:46
  Don: I think, you know, David, when you ask the self-insured employers what they want, they want their employees to benefit from the plans that they're paying for.
• 23:57
  Don: And right now they don't know how much benefit is being afforded them.
• 24:02
  Don: They don't know where they are in just, in suspends that they have.
• 24:06
  Don: And sure, they want the information.
• 24:09
  Don: They want, they wanna be able to drive the bus looking out the front window, um, but what they… where they benefit is if they're paying an ASO or a TPA to manage their claims, those commercial insurances who are most of the ASOs, their overheads are 12% to 15%.
• 24:28
  Don: When I can knock that down to 2% or 3%, where does that money go, right?
• 24:34
  Don: Some of it's gonna go to that payer, right?
• 24:36
  Don: It's gonna go to the ASO because now we've taken the overhead away.
• 24:39
  Don: I mean, when we… I mean, think about this.
• 24:41
  Don: The average claim today costs somewhere around $10 to $15 to process.
• 24:48
  Don: If I could knock that down to a dollar, what happens to the other $12 or $13?
• 24:53
  Don: It goes somewhere.
• 24:54
  Don: Right?
• 24:55
  Don: So we free up that money.
• 24:57
  Don: It either goes to the payer or whoever's administrating on behalf of that payer, or a split between them.
• 25:05
  Don: But we will demonstrably impact that overhead in a very significant way, and when we sit down and we look at what those savings are, well, everybody upstream from us is gonna wanna benefit from them.
• 25:19
  Don: So take it.
• 25:20
  Don: I, I, I, I-- Y- you, you pay me a dollar a claim, I, I'm a happy guy.
• 25:24
  Don: You know?
• 25:25
  Don: I don't need $13 a claim.
• 25:26
  Don: I don't need $12 a claim.
• 25:27
  Don: I take a dollar, and the $12 that we freed up, $13 we freed up, goes somewhere, and those go to, generally to the payer or to the administrators who help the payers, you know, take care of their plan.
• 25:40
  Don: So the provider wins because they're getting paid in real time.
• 25:43
  Don: They're not getting paid any more, they're getting paid the same thing in real time.
• 25:48
  Don: That's a real benefit just from a cash flow perspective.
• 25:51
  Don: So they, yeah, as you point out, they win.
• 25:53
  Don: But when I reduce overhead from twelve or thirteen percent to two or three percent, where does that money go?
• 25:58
  Don: It goes to the payer, so they win.
• 26:01
  Don: And I s- so again, when I say everybody wins, the p-patient wins because they get no surprise bills, and they know at the time of service what something costs.
• 26:09
  Don: Which if you listen to some of the politicians, they wanna put money in people's HSA accounts.
• 26:14
  Don: Why?
• 26:14
  Don: So they can shop.
• 26:16
  Don: Well, how can they shop if they don't know the price?
• 26:18
  Don: I don't understand that.
• 26:18
  Don: I, I told Doctor, or Senator Marshall, Dr. Marshall, I said, "You know, Senator, I don't quite understand this aspiration you have to put money in people's HSA accounts so they can shop.
• 26:27
  Don: What are they shopping over?
• 26:29
  Don: How do they discriminate between one place or another based on some published price?
• 26:33
  Don: 'Oh, that hip replacement there is thirty thousand, over there it's twenty-five thousand.'" They don't care.
• 26:38
  Don: What do they wanna know?
• 26:40
  Don: What's it gonna cost me, is what they wanna know, and nobody can tell them that.
• 26:45
  Don: We can.
• 26:46
  Don: And so the patients win in that regard.
• 26:48
  Don: No more surprise bills, no EOB that comes four weeks later, and then you get a bill from your provider, you know, a week later for $12 or whatever it is, and that goes on the bottom of your stack because somebody told you all doctors are greedy and they don't need the money, or all hospitals are greedy, they don't need the money.
• 27:03
  Don: So those bills never get prioritized, and, and I think frankl- I think there's been recent legislation that it doesn't even affect your FICO score anymore.
• 27:12
  Don: So we've basically said to patients, "Eh, pay it if you want to, don't pay it if you don't." You know, we got a hundred million people in medical debt according to KFF.
• 27:21
  Don: While I don't agree with their analysis of it, 'cause their analysis if you use a credit card to pay for medical care, you're in medical debt.
• 27:28
  Don: I don't, I don't believe that's an appropriate you know, cohort to put in there.
• 27:32
  Don: But that, yeah, we can quibble over that stuff.
• 27:34
  Don: But all of that would disappear in time because we eliminate it So those patients win in that regard, and providers win because they're collecting from the patients upfront before they hit the parking lot.
• 27:46
  Don: They're getting paid in near real time, and the payers win because we've reduced-- 'cause we, we reduce pa- the, the, the overhead on both sides of the equation, right?
• 27:53
  Don: We reduce it for the provider 'cause they're the ones who have to handle the prior auth and the, you know, the appeals and denials and stuff.
• 28:01
  Don: But also, somebody's got to administer that on the payer side, right?
• 28:04
  Don: So somebody's doing that.
• 28:05
  Don: Somebody's dealing with those appeals and denials too on the, on the payer side.
• 28:09
  Don: So if we can eliminate that too, then those monies flow to the payer, and so we think everybody benefits.
• 28:16
  David: So most employees in this country are in self-funded plans, and there's been actually a fair amount of class action litigation against some of these sponsors, uh, some, you know, in Fortune one hundred, Fortune five hundred companies.
• 28:29
  David: And so this sort of, you know, ERISA fiduciary exposure is on the radar screen for most, you know, CFOs- Yeah … of larger companies.
• 28:36
  David: I'm wondering if there's a play here on real-time adjudication.
• 28:40
  David: Does that change kind of the calculus for the plan sponsors?
• 28:44
  David: Is there, um, you know, does that provide some sort of a wedge for your, for your go-to-market strategy?
• 28:49
  Don: Yes.
• 28:50
  Don: In fact, that's one of the things when we talk to self-insured employers and their coalitions, the thing they focus mostly on.
• 28:57
  Don: It's called the accumulator state.
• 28:59
  Don: What is the state of the accumulator at this point?
• 29:02
  Don: And they can't get that out of the current administrators that they use, whether it's a TPA or an ASO.
• 29:08
  Don: And so, you know, they might get a quarterly report.
• 29:11
  Don: Um, it might be accurate, but if there's claims in the queue, it's not exactly accurate because they haven't adjudicated all the claims yet.
• 29:18
  Don: In our case, we have… in fact, we're patenting this.
• 29:22
  Don: It's called the authoritative accumulator state graph, and it is a real-time snapshot of exactly where any employee is or, you know, any patient is against their accumulator state.
• 29:38
  Don: Thus, the inverse report of that is what has the payer spent?
• 29:42
  Don: Where do they spend it?
• 29:43
  Don: What did they spend it on?
• 29:45
  Don: Those are the pieces of information that they have a very difficult time getting their hands on today, and that's exactly what ERISA wants.
• 29:53
  Don: They want them to have actionable data and to be actively managing those plans.
• 29:58
  Don: They can't do it if they don't have the information.
• 30:00
  Don: So they've been punting that via contract to their ASO or to their TPA.
• 30:05
  Don: And the ERISA people are saying,"No, no, no, no, not anymore. Mm-mm, employer, you're responsible for this, and we will hold you accountable." So our solution is this authoritative, uh, accumulator state graph.
• 30:19
  Don: Now, we even debated internally whether or not we want to be ERISA compliance ready or just provide the information so that the employer can be ERISA compliant.
• 30:32
  Don: And we've had some people ask us, "Well, then will you be the authoritative, you know, um keeper of this, of this information, and so far we've said, "No, we're gonna provide you the information.
• 30:45
  Don: You attest to its accuracy.
• 30:47
  Don: You take the ERISA responsibility." I don't think we're prepared to do that.
• 30:51
  Don: Uh, not yet. Not, not, not… Maybe one day, but, you know, I t- I… The people I've talked to, I said, "But then we'd have to charge you for that.
• 30:59
  Don: So, you know, if you wanna implement us and, and, and, and not incur any charges, you know, then, then don't ask us to do that.
• 31:07
  Don: You can do that, and we'll give you the data so you can do it, you know?"
• 31:11
  David: So I understand, you know, at the kind of individual level here how this could work and, and make a difference.
• 31:17
  David: We talked about some macro pieces as well.
• 31:20
  David: You've obviously got a big vision for where this could go, and I'm wondering, you know, what the vision is.
• 31:26
  David: In other words, what will the healthcare, what will the healthcare world look like in, let's say, 10 years if what you're driving forth with today with PIM works out the way you're describing?
• 31:39
  Don: Well, I would hope, David, that we can save the industry the hundreds of billions in waste and administrative overhead that currently exists.
• 31:48
  Don: That, to me, would be money returned to taxpayers.
• 31:51
  Don: That would be money, uh, spent on better medical care, better tools, you know, things like that.
• 31:57
  Don: And I, I, I really, I believe that that will be the case in the long run.
• 32:02
  Don: You know, right now we're calling this nearly a $5 trillion industry, of which a trillion dollars of it, a literally 20%, a trillion dollars is attributed to administrative overheads.
• 32:15
  Don: Now, not all of that's waste, not all of it's, you know, inefficiency or fraud, but a large part of it is, and if we can reduce that trillion dollars by $200 or $300 billion, that's a big thing, and that money goes back into the taxpayers, you know, or back into the s- the, the state treasuries.
• 32:33
  Don: And, you know, uh, I think the most unwieldy component of all the things that we do in healthcare right now is probably Medicaid, simply because of the difference from state to state.
• 32:42
  Don: Um, but, you know, if what we did instead… And I, I said this to, to Senators Marshall and Cassidy, "If you just let us take over the bronze plans and the Affordable Care Act exchange, we could save you probably tell, 10,$10 to $12 billion a year in overheads and identify the frauds that you're more, you know, most concerned about." And I said, "That doesn't include the silver or the gold plans.
• 33:09
  Don: We're, we're not even suggesting that, you know?
• 33:11
  Don: But it's still about 10 or 12 million lives.
• 33:13
  Don: It's not a small, small number." Um, I think in total there's, like, 37 million people in the Affordable Care Act exchange right now, although because premiums have gone up quite a lot, there are a lot of people this year who didn't sign up or have signed up and then couldn't afford to pay their premiums, and they've already stopped, and it's only, you know, end of April or 1st of May.
• 33:32
  Don: So, you know, we hope that we can drive costs down in ways that, well, end up in the hands of the people and the back in the coffers of the state and federal government, uh, to be used for better things than simply managing a dysfunctional system that harkens back 40 years.
• 33:52
  Don: I mean, batch processing stopped in the credit card industry in 1968, but yet we still, we still do it in healthcare.
• 33:59
  Don: Why?
• 34:00
  Don: I, I-
• 34:01
  David: Don, you're gonna put all the IBM three- you're gonna put all the IBM 360s out of business Yes.
• 34:05
  Don: And all the COBOL programmers will be out of work, I know.
• 34:07
  Don: Yeah, yeah.
• 34:08
  Don: And that's okay with me.
• 34:09
  Don: I'm sure there- You know, smart people will figure out something, something better to do.
• 34:12
  Don: Yeah.
• 34:13
  Don: But they shouldn't be maintaining COBOL systems on an IBM 360 is where they should not be.
• 34:17
  Don: Fair enough.
• 34:18
  Don: That's not gonna get the next big thing done.
• 34:20
  Don: That's just not gonna happen.
• 34:22
  David: Now, Don, my last question for you is, is this: that, you know, there's a lot of people that are listening to this episode who are, you know, either they're running an ACO, they're a self-employed insurer, they're a provider, and they're saying, "This all sounds great, um, but what is the next concrete step they should take other than, you know, listening to our next, uh, episode together?" What, what can somebody actually do?
• 34:43
  David: We're sitting here, you know, around in the middle of the year.
• 34:46
  Don: Well, I think if it's you're a payer, if you're a self-insured employer, you're part of a coalition or you're working independently, um… And we've talked to m- many who, you know, are trying to self-administer, um, or take administration away from the big ASOs and, you know, work with innovative, more transparent TPAs like Sage and some of the others, and I think that's great.
• 35:08
  Don: All we ask is sit down and talk to us.
• 35:10
  Don: Let us show you, let us tell you how we can save you money, and let us tell you the positive effects that what we do will have on your plan, on the design of your plan, and the use of your plan, and your management of that plan.
• 35:23
  Don: And if you see those benefits, then when it's time, and, you know, like I… You know, we're, we're still in development.
• 35:29
  Don: We're an early stage company.
• 35:30
  Don: We expect to participate in open enrollment in 2027, not before.
• 35:36
  Don: And so sit down with us during open enrollment or before, and let's talk about what you can do and what you might do that would help your system, your plan design and its management be easier for you.
• 35:51
  Don: And look, we, we, we speak X12 just like every other clearinghouse.
• 35:56
  Don: You know, and, and we've talked to other clearinghouses about working with us, like Steady, the, the, the more, you know, the, the technology-based, um, uh, uh, clearinghouse that's actually getting a lot of traction, and we've talked about a collaboration.
• 36:09
  Don: We could be a clearinghouse or look like a clearinghouse to a provider, um, but there's people for that, and they do a good job.
• 36:16
  Don: Like Steady, they do a great job.
• 36:18
  Don: And we would love to work with them on an integrated solution that would take everything from, you know, the time you submit the claim until you get your remittance advice and everything in between.
• 36:28
  Don: And so what we would ask as a payer is sit down and talk to us, and we'll describe to you what we think the benefits are.
• 36:34
  Don: But because we speak X12, you can put us alongside the existing system.
• 36:40
  Don: You don't have to rip out anything.
• 36:42
  Don: Don't have to stop doing anything.
• 36:44
  Don: You can just put us next door, and you could take some portion of your patient base and assign them a different member number that's going to push that claim onto our rail, and you could do a live comparison right there in real time, and you'll see the difference.
• 36:59
  Don: And as you do, I think you'll move more and more of it to us, but you don't have to.
• 37:03
  Don: And so we wanna make the adoption as easy as possible for anybody to, to include us so that they can see proof for themselves that we're actually achieving the metrics that we claim to.
• 37:15
  Don: And if we don't, we don't.
• 37:16
  Don: I mean, I… You know, there's always that possibility, but we think we will.
• 37:19
  Don: In fact, we strongly believe that we will.
• 37:21
  Don: And so sit down and talk to us, but let us show you how implementation can be, well, almost risk-free.
• 37:28
  David: Well, that's it for another episode of CareTalk Executive Futures.
• 37:32
  David: My guest today has been Don Peterson.
• 37:33
  David: He's founder and executive chairman of Pym Holdings.
• 37:36
  David: His company is rebuilding the infrastructure underneath American healthcare payments, adjudicating claims in real time at the point of care.
• 37:45
  David: I'm David Williams, president of Health Business Group.
• 37:47
  David: If you like what you heard, please go ahead and subscribe on your favorite podcast platform.
• 37:53
  David: And thank you, Don.
• 37:54
  David: Thank
• 37:55
  Don: you,
• 37:55
  David: David.