In 2005 TriCap Technology Group’s method to efficiently valuate and place medical receivables with debt buyers, collection agencies and early out specialists through its online trading exchange was just a concept.
Last month that process was validated as a unique and superior method when it was issued a federal patent. Jim Zadoorian, Ph.D., president and chief operating officer of TriCap Technology is co-inventor of the patent process, along with TriCap President Joseph LaManna and Christopher Golden. Zadoorian said it’s the first patent to be issued on the organization of receivables.
Some accounts receivable management industry watchers already are questioning the patent’s implications for the medical receivables sector. But Zadoorian – who said the patent gives its inventors exclusive rights to employ many, if not most, of the processes ARM professional use to organize and collect specialized medical debt – readily admits that he doesn’t know what it means yet to the company or industry.
“We need to understand our rights and are building filings around the patent to protect our core business,” Zadoorian said.
What exactly is that business? TriCap’s ARxChange takes overdue medical receivables and organizes, analyzes and scores them according to their real time market value based on the likelihood of liquidation. It then recommends liquidation methods and specific ARM companies to the receivables’ owners based on their stated goals. The recommendations include the option of using in-house staff or ARM professionals whose collection methods would produce the best liquidation results.
Pre-screened and registered buyers, debt collection agencies, receivables managers, and other specialists visit the exchange to see what’s available to bid on and learn more about the portfolios. They can submit bids, including terms and guarantees in their proposals for health care providers to consider or enter negotiations.
Zadoorian believes ARxChange provides a more efficient and productive way to pair medical receivables supply with demand and says the patent validates that.
Zadoorian and his co-inventors applied for the patent in 2006. ARxChange did not make its first trade until the spring of 2007.
“We wrote the method on how the business should work, then built it (the system),” he said. “We later proved the method through the operation of the business.”
Zadoorian, a former hospital administrator and industry lobbyist, said the impetus for the exchange was to help hospital systems improve their financial performance by getting the most out of their receivables.
“If we do it well, health systems will have more money to fund their clinical and charitable missions,” he said.
Since the ARxChange began operating in 2007, the trading volume that has flowed through the system has grown exponentially. Zadoorian said the business has listed more than $7.5 billion in medical receivables. That success was achieved by using the process described in the patent, and that, primarily, is what TriCap wants to protect and accelerate.
Still he knows that some industry players question what it will mean for their business.
“It’s not our intention to put road barriers up (to doing business),” he said. “We’re interested in trying to help the market along.”