CareCentric ® Acquires Alternative Billing Solutions, Inc.

CareCentric now dominant leader in technology, billing and services

ATLANTA/MEDTRADE (September 18, 2006)—CareCentric Inc., a leading provider of technology, business-operation and outsourcing solutions for home medical equipment, home care and long-term care providers , announced today that it has acquired the ongoing business operations of Alternative Billing Solutions, Inc., with offices in Bloomington, Minn., and Jamestown, N.D. ABS’s services build on those already provided by CareCentric through its billing center in the Atlanta area.

The ABS acquisition nearly doubles CareCentric’s billings to approximately $100 million a year. In addition, CareCentric offers the industry’s leading software solutions—used by more than 1,000 customers and in its own billing operations—as well as business process outsourcing, operational assessments, customized consulting and compliance services, and information technology outsourcing.

“Our acquisition of ABS clearly establishes CareCentric as the dominant provider of not only billing services, but also of a total array of technology and business management solutions to the home medical equipment industry,” said John Festa, CareCentric CEO and president. “Our customers can select the solution that fits their needs, from our industry-leading software—MestaMed®, DME VI and Ac-Cura®—all the way to a complete turnkey billing solution from a company that has more than 20 years’ billing and technology experience.”

Originally founded in 1987 as a provider of HME consulting services, ABS launched as a separate company in 1994 to provide a complete outsourced billing solution. ABS has since grown to be the largest HME billing services business in the United States, with a team of more than 100 professionals. The company collects approximately $60 million a year for its billing clients, and its average client’s Day Sales Outstanding (DSO) currently stands at 54 days, approximately 30 days less than the industry average.

“If you are a company doing $2.5 million annually in sales and are able to reduce your DSO from 90 to 60 days, you will enjoy a one-time cash increase of more than $200,000,” said Nancy Burma, former president of ABS, and now vice president of billing services for CareCentric. “We have regularly taken on clients with DSOs in the high 100s and reduced them by 50 percent in the first six months.”

ABS’s expertise is highly valued as they not only concentrate on the current receivables but also measure the amount over 120 days. On average, ABS’s combined receivables over 120 days is 14 percent, with several clients at less than 10 percent—much less than the national average of 25 to 30 percent. 

Burma is applying her company’s performance measurements to CareCentric’s existing billing services operation. Those measurements include confirmed orders billed within 24-48 hours, unbilled revenue of less than 10 percent of the previous month’s revenue, denial rates below 7 percent billed revenue, denials worked on average within 10 days of receipt, and monthly justification of all receivables above 60-90 days.

As a full-service billing company, CareCentric confirms orders; gathers certificates of medical necessity (CMNs) and reauthorizations; bills primary, secondary, tertiary and patient portions; works all denials and correspondence; and posts cash. In addition, it offers clients training on new policies at no additional charge. This allows the dealer to concentrate on getting the business and delivering the product. And like its software customers, CareCentric’s billing operations use CareCentric software—which includes DME VI, MestaMed® and Ac-Cura®—based on the customer’s preference.

"We have a unique relationship with our clients—more of a partnership,” said Burma. “We encourage our clients to call our staff for assistance if they are unfamiliar with coverage criteria." Other billing companies just have paperwork sent to them to process. CareCentric’s clients enter new patients, create delivery tickets and enter inventory, then the billing services staff handles everything from the point of delivery through collections and cash.  

With ABS’s considerable expertise, CareCentric also provides consulting services to HME providers in several key areas, complementing those offered by industry expert Jane Bunch, CareCentric’s vice president of HME consulting services. Those services include customer services training to improve staff interaction with customers, and reimbursement training on coverage criteria across all payers. Consulting services include evaluation of and recommendations for improving accounts receivable management, and complete operational analysis of the provider’s procedures and policies.

“CareCentric’s expertise is unsurpassed in the industry,” Festa said. “Our people have decades of experience that we can put to work for our customers—helping them reduce costs, increase productivity and build more successful businesses.”