Albuquerque-based speech therapist Lisa Sisneros Brow used to spend 30 hours a month billing Medicaid for her services, but now she’s cut that to one per month thanks to a new software system she built with her husband.
The system has proven so successful that she and husband Phillip Brow launched a new company, iTherapyDocs, to scale it up and market it to individual providers, agencies and group homes in New Mexico and elsewhere. There are already 14 agencies using it in Albuquerque, Santa Fe and Farmington, some of which say the system is a godsend.
“It took us from a paper system, which is impossible to manage, to an electronic system,” said Edward Kaul, CEO of ARCA, an Albuquerque-based intellectual developmental disabilities agency. “In our last annual Medicaid audit, there were no financial findings at all. That hasn’t happened for as long as I can remember.”
Results like that could prove irresistible for service providers everywhere who bill Medicaid for people supported through the developmental disabilities waiver program, which accounts for about 10 percent of all annual Medicaid spending nationwide. That amounted to about $41.5 billion in 2014.
Nearly all that billing today is done through paper processing, reflecting the complexity of documenting the work of every staff member and subcontractor involved in everything from group homes and job-coaching programs to day habilitation and community access services. All agencies large and small, as well as individual therapists like Brow, must provide documentation for every billable thing they do. And with the billing units all broken down into short work intervals of as little as eight or 15 minutes, the paperwork often stacks up quickly.
“We have more than 700 people on staff who serve about 680 people on any given day in as many as 225 different locations,” Kaul said. “We have to track it all and pull all that data together.”
For most service providers, that eats up from 7 percent to 10 percent of revenue, Brow said. And with about 90 percent of providers today processing everything on paper, the system is fraught with errors that regularly trigger Medicaid audits. That comes with the stigma of “fraud” and the need to pay back the government for anything that isn’t explicitly and accurately documented.
“Every billable service requires a document that meets agency standards,” Brow said. “It’s very time consuming, and because it’s all processed on paper, it’s full of opportunities for error and always subject to Medicaid audits.”
That hits home in New Mexico, where Gov. Susana Martinez’s administration opted to shut down 15 behavioral health care providers in 2013 for allegedly overbilling Medicaid by about $36 million. Nearly all of them were later cleared of wrongdoing by the New Mexico Attorney General’s Office.
“You have to hit the mark with documentation 100 percent of the time,” Kaul said. “Simple errors can constitute Medicaid fraud and you have to pay back for any billing time that’s not exactly aligned. If something is missing, or if you’re off by a minute or two, it’s incomplete.”
The iTherapyDocs system virtually eliminates that pain, allowing every therapist to rapidly enter all documentation electronically on the spot, even from a smart phone. Administrators then use the system to collate, tally and submit all documents for billing Medicaid.
The system has checks and balances to wipe out error. It won’t allow administrators to bill Medicaid until every document is logged in proper order, said Phillip Brow, an engineer who originally created the system to make his wife’s speech therapy practice more efficient.
“We created an error-proof process,” he said. “It’s a rule-based system for documentation that processes everything according to Medicaid rules to prevent error. We also made it an easy system so people can use it no matter what their level of computer experience.”
The Brows beta-tested the system over nearly three years through the speech-therapy practice, and through ARCA and two other group and individual providers. The testing showed the system can reduce customers’ process costs by a net 50 percent, putting as much as 3 percent to 5 percent of additional profit on the bottom line, Brow said.
With product in hand, the Brows joined the ABQid business accelerator in 2015. That helped them raise enough private equity from the ABQid investment fund and local angels to place their software in the cloud, allowing iTherapyDocs to easily scale up for customers through a software-as-a-service model.
The company is rolling out the system in modules for individual therapists, group homes and more. The therapist module has already attracted about one new customer a week in recent months, the Brows said.
ITherapyDocs contributed to ABQid’s decision this year to plan “themed” cohorts for future accelerator programs that target specific industries, beginning with a health and wellness group, said ABQid Executive Director T.J. Cook.
“With iTherapyDocs we’ve seen how much pain there is in the health and wellness space,” Cook said. “There’s room for a lot of innovation to find solutions. iTherapyDocs is a great example of a new company that’s assembled a great development team and new technology to address problems that nobody else has yet addressed.”