How a Texas couple is getting rich off out-of-network medical bills.
By Doug Aldeen
Statnews recently published a story about the founders of HaloMD and how they pioneered a nascent business in the NSA/IDR market to making $1 Billion in a span of a few years which is certainly worthy of a Shark Tank pitch:
“Mr. Cuban I am looking for a small fortune (read: pirate ransom) in order to facilitate an opportunity for you to participate in the Independent Dispute Resolution (“IDR”) process under the No Surprises Act (“NSA”). “
SWOT Analysis: Strengths:
1. The IDR/NSA market is a $6 Billion government created market that sanctions employer balance billing under certain out of network situations. Key: Employers are required to pay something in addition to what was originally allowed so Johnny Six Pack does not have to: Read: Employers cut lump sum checks. Patients have installment plans… .
2. Binding baseball style arbitration awards ( with no ability to appeal the adverse decision) that vary between 3x and 5x what would otherwise be paid consistent with a negotiated arrangement. This is a business model and not just a way to resolve infrequent disputes ( i.e. recurring revenue stream); 84% “win” rate via the IDR process without the ability to use government rates as a basis for reimbursement;
3. In many circumstances, unprecedented default rates (very few consistently answer the mail);
4.You can own your own ATM machine and arguably make a commensurate amount to your current Rx venture.
Weakness: It will take an act of Congress to change the current rules under the NSA.
There is significant runway to earn a ton of green cabbage; Opportunity: Three words: “government created market.” Need I say more?
Takeaway: Milton Friedman once was quoted as saying that “if the government was in charge of the Sahara Desert, it would run out of sand in five years.” Given the above framework, Professor Friedman may be onto something… . Mark Cuban
Sunday Morning Bonus Read – Hawaii Medical Journal.
