Wednesday, June 17, 2009

IOUSOS.Com offers to "Cure Your Debt" With Medical Providers


I've just completed a post at Pennywise Family about medical bills. While planning that project, I was contacted by IOUSOS.com about their company. You might remember that IOUSOS.com was a presenter at FINOVATE, which we followed closely here at PLR, though since the company isn't a P2P or micro finance company we didn't profile them specifically at that time.

IOUSOS is a new venture of Brian Mullally from GlobeFunder, and while licensed as a collections agency, is more like an accounts receivable interface for medical providers and patients.

For medical providers, billing can be especially collections-intensive as the invoices aren't always understood by the patient, and there is sometimes miscommunication between insurance and the patient. Additionally the sheer volume of invoices overburdens many medical providers with administrative follow up. Finally, there is a growing number of people who simply cannot pay.

A Kaiser Health tracking Poll was referenced in IOUSOS materials, shows that one in five Americans have found themselves forced into serious financial straits due to medical bills. Those materials also report that health care providers are owed an estimated $100 to $200 Billion in unpaid bills.

IOUSOS aims to help medical providers speed up their AR turnaround and help get patients a bargain.

Patients or providers can initiate contact with IOUSOS. I like to test-drive everything I write about here, so I plunked in one of my daughter's medical bills for $500 worth of blood work from earlier this month (the bill has arrived, but is not yet due). They ask for the amount owed, account numbers and name and birth date (here I couldn't tell if that meant me, my daughter or my husband who is the insurance subscriber, so I guessed). After that information is put in the system, you make an offer. I offered $300.

I'm willing to pay the entire thing, and I will, but I'm going to pay it cash in 15 days. I'd just like to see how they treat it. Currently, my hospital isn't using their system, but IOUSOS will send a message to the hospital saying I've offered that payment to be made through their Web site, and ask if they will accept that as payment in full. (Don't worry, their web site says that it doesn't get reported to credit bureaus as a "charged off bad debt" I checked!).

The hospital can counteroffer, or offer a payment plan, or decline to work with IOUSOS and send me another invoice in a month, which is their normal practice.

While just a start up, IOUSOS has already registered 17,000 patient users and has $25 Million in transactions. Sixty percent of these were referred before the collections process began.

Medical providers can turn over their invoices immediately to IOUSOS, or at an aging point at which they want to stop pursuing them for collections. Friendly letters with the user's access codes are sent to patients who owe on a bill in the system, and patients can make an offer, pay by credit card, or establish a monthly payment plan at no charge--the medical providers provide all of the fees, and the fees are success-based, so IOUSOS keeps the collections moving.

I'll update with a comment when I hear back from the hospital about my daughter's bill. This could be a really convenient way to pay medical bills, especially the big ones for those who are under-insured or have serious medical conditions. It might even be a helpful tool for cheap people like me.

Overall, it's a well-designed site, and an idea a long time coming. The interface is friendly and easy to use and doesn't have a "collections" feel at all. It has the feel of an uninterested third party. In-reality they only get paid if the patient pays up, but this may be the critical breaking point between IOUSOS and a traditional collections agency (which usually buys the bad debt and then tries to collect more than they purchased it for). IOUSOS has to treat you well in order to get paid. I like that, and I hope more companies adopt this sort of an interface!

(More on collections soon--I saw a great film on the subject. Perhaps a post for tomorrow?)

Jessica Ward is a freelance writer in the Seattle area. She writes on personal finance, business and family.

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