By:  Gregory R. Zinser, Chief Executive Officer
May 26, 2009

We are very proud of the results we have achieved for our clients as their business partners and are continuously improving the processes that have made our collections and accounts receivable results among the best in the industry.  Our performance to date has been the result of an uncompromising commitment to utilizing the latest technology and internal process improvement.  This article is a summary of specific examples of that commitment.

Operations and Processing

RealMed Partnership
While our percentage of first time clean claims is already among the best in the industry, our continuing efforts to improve in this area have included a thorough review of several different clearing house options.  Our conclusion based on that review was that the RealMed system is superior in its ability to provide far greater detail on claims status, work edits, and claim errors in real time and verify eligibility automatically in real time or near real time.  As we complete the transition of all claims to RealMed, this will increase our clean claims percentage, reduce the amount of time from date of service to date of collection, and reduce accounts receivable even further.

Rules Engine
Supplementing our existing contract compliance rules engine, we are now in production with a next generation intelligent front end rules engine providing automated edits and controls to detect LCD, LMRP, CCI, and ad-hoc user defined rule violations and route them appropriately within KAM’s workflow.  Over the next 6 months, this technology will be leveraged to further simplify pattern identification and mass claim resolution by our expert rules team.  This technology will dramatically reduce billing errors by eliminating the possibility of preventable human error to the greatest extent possible.

Underpaid Claims Module
Medac is the industry leader in the development of our powerful underpaid claims module that continues to be enhanced by the rules engine work described above.

Reimbursement Tracking and Cash Flow Forecasting
Medac’s proprietary KAM system features robust contract compliance rules and workflows built in to the system.  Our reimbursement tracking module has been in operation for over five (5) years.  Our “Max Potential Analysis” currently provides cash forecasting capability. Our development plans include the automation of this process by providing a web based form where clients will be able to change assumptions to forecast cash flow based on multiple specific scenarios.  We expect to have this new modeling module completed by December, 2009.

On-line Claims Payment
Medac was one of the first billing companies to allow patients to pay bills on line.

Secure Remote Scanning Technology
All Medac claims are electronically input by scanner.  We were one of the first billing companies to go totally paperless over four years ago.

Work Flow Documentation and Process Improvement
We have engaged an outside consulting firm to fully document every facet of our billing, coding and collection systems.  This will be of great value in identifying best practices; creating efficiencies, increasing accuracy and ensuring that the appropriate controls exist at every critical point in the process to reduce the risk of error and ensure that problems will be identified and addressed in a timely manner.  We expect this work to be completed by May 31 at which time recommendations will be evaluated by the Medac management team.  Implementation of all changes to be made as a result of this work will take place starting no later than July 1 and be fully implemented by the end of this calendar year.

Practice Management Solutions

MedDirect Partnership
As patient financial responsibility continues to increase, we have researched all available alternatives for improving self pay collections for all of our clients.  This has resulted in a partnership with MedDirect, and for those clients who have chosen to work with them; their collection efforts during the first 60 days after billing are already producing excellent results.

Quality Assurance Measurement Solutions
We have had extensive internal discussions and done extensive market research concerning the development of a QA solution for our clients.   Several vendors are offering QA solutions that involve multiple stand-alone products, none of which have yet been integrated with each other.  This is a notoriously difficult and error prone undertaking for even the largest technology companies.  In contrast, Medac’s KAM Technologies billing system is a fully integrated solution.  It will be extremely difficult for any other billing company to achieve the level of integration existing today in our proprietary technology.  While we have been reluctant to rush into partnership with an existing company for this purpose based on what we have seen in the market to date, we continue to search the market for potential partnerships that could benefit our clients.  At the same time, we have also developed a plan for internal development of this product with the help of specific client clinicians who have expressed an interest in being a part of the development process.  Our goal is to offer both of these options to our clients.

Electronic Medical Record
• We have recently completed the development of a clinical pain EMR for automating the documentation of patient encounters currently being used by several pain practices.

• Our web-based patient scheduler is available now for office based practices.  Fully integrated with KAM featuring prominent display of actual patient balances from KAM for the reference of scheduling users; ideal for office based specialties including pain groups.

• As a nationally recognized expert in anesthesia claims and coding, Bellinger Moody has been approached by several EMR companies to assist in developing enhancements to their products in two areas:  1) e-prescribing capabilities that will deliver incentive payments to anesthesia and pain management groups; and, 2) the transition from ICD-9 to ICD-10 that will occur within the next three years.

• A surgical OB EMR will be introduced by the fourth quarter of 2009.  Medac will be the only billing company to offer a moderately priced surgical EMR.

• We are currently collaborating with both Docusys and Philips (Compurecord) on development of full integration with their EMR systems.  We are in production with the Compurecord integration for two clients.

Our Commitment to Your Future

Our long term commitment to technology and excellence in client service is unsurpassed in the industry.  Since our inception, Medac has invested over $10 million in technology and systems.  As described more specifically above, we remain committed to investing in the latest technology and the highest quality staff at all levels to accommodate the growth and changing needs of our clients.  As the level of investment that will be required may change from year to year, we must be able to maintain flexibility in both our profit expectations and cash flow need.  Our current capital position is strong and we have no outside investors to satisfy when it comes to profitability and level of investments necessary to keep us and our clients on the leading edge of the industry.  This is among the many reasons why we have chosen to remain independent while many of our competitors have made the decision to acquire needed capital by relinquishing ultimate control to outside investors.

With Medac, you will always have the best of all worlds: the flexibility and responsiveness that comes from sole proprietor control; people you know and can trust; competitive fees; and substantial resources appropriately allocated so as to achieve superior performance in all aspects of our service.