$50 million in new funding to help fuel InstaMed growth
InstaMed, one of the largest healthcare transactions processing vendors in the industry, has raised $50 million in a funding round with Carrick Capital Partners.
The vendor, which enables providers and insurers to manage healthcare payment transactions on a platform that integrates with existing information systems, will primarily use the new funds to enhance marketing and sales functions, says Bill Marvin, president and CEO of the company, which also offers a range of revenue cycle services.
The platform supports integration of credit card, deductible, co-pay, remittance advice and payment plan functions, among other services.
“By and large, the product is built,” Marvin adds. “At this stage, it’s about scaling it out and pushing and growing the network.”
InstaMed works with software vendors across the industry but has an especially strong relationship with Epic, serving one-third of Epic users, according to Marvin. The company also partners with major banks that include Keybank, Wells Fargo and US Bank, among others.
Much of its business, however, comes from payers who increasingly need to send remittance advice and payments electronically to providers that have moved from paper checks to direct deposit. However, with electronic adoption rates of as much as 70 percent to 80 percent, InstaMed still maintains a footprint in the paper transactions world.
The company provides value-added services to insurers by signing providers up for electronic deposits, and it also can handle certain provider functions as requested, such as collecting co-pays and deductibles, and setting up payment plans.
Expansion of traditional claims clearinghouse operations over time became a necessity as financial transaction fees steadily fell, Marvin explains. In 1991, clearinghouses generally changed 35 cents per transaction on behalf of a provider or payer. By 2003 the cost was a dime and now the price is significantly below that, he adds. “But when you move money, that’s where the revenue is.”