An Indiana company is marketing a new product that it says will save $9 billion to $38 billion over the next 10 years by streamlining the payment collection process for Medicare.
Launched in July by The Haley Group, Encentiv is "designed to provide economic incentives which act as a catalyst in speeding up financial transactions to as fast as two days," according to the company's press release introducing the patent-pending project. "While applying to many broad areas of worldwide commerce, special attention ... is initially being directed at clients such as large health plans, including Medicare and Medicaid."
Company president David A. Haley, who has written letters to the governors of every state as well as government officials and the heads of various health plans, calls Encentiv "a new method of commerce" that hasn't been explored before.
"Nobody has ever thought of doing things this way," he said. "The potential is just unbelievable."
According to company documents, Encentiv "aligns financial incentives between buyers and sellers" so that business deals are completed within days, rather than weeks or even months. By shortening that time period, the program produces new revenue and lowers expenses.
"Financial incentives in present healthcare economics make it desirable for health plan payors to maximize their use of cash flow by taking their time paying claims," the company states. "The incentive for healthcare providers is to minimize the time between submission of a claim and the receipt of payment, in order to increase cash flow and working capital and decrease accounts receivables. Therefore, the payment system widely practiced today is an irrational win-lose transaction model."
Haley says health plans traditionally take 14-45 days to pay a claim - "their incentive is to sit on the claim as long as possible" - and that Encentiv would offer early payment incentives, or EPIs, to those payers to complete the deal as soon as possible.
Haley, with more than 30 years in the healthcare business, expects his biggest challenge will be in convincing those resistant to change that Encentiv is a good thing. He says he's talking with some high-profile potential clients, including government officials who need to determine whether Encentiv steps over any legal boundaries.