CEO Todd Roberti says Premier Healthcare Exchange prospers on the conviction that catching small mistakes produces big savings.
"The philosophy here is quarters add up to dollars," Roberti said.
The Bedminster information technology company locates health care savings that total millions of dollars for its clients. The company has found enough quarters to grow its revenue to $50 million a decade after its founding, while employment has more than doubled since 2010.
Premier uses its software and hardware to identify duplicate charges, coding errors, unapproved procedures, unusual drug dosages and other inaccuracies that can needlessly pile on health costs for its clients.
The company said it only charges if it finds errors, usually on a 20 percent basis, providing incentive to forge reliable relationships.
Premier said it focuses on claims ranging from $100 to $1,500, which Roberti said typically contain savings opportunities of around 30 percent of the original cost. Turnaround time, he said, is between seven and 10 days.
The company reviews large claims, too, but Roberti said its niche is finding the hard-to-spot mistakes that can easily slip under the radar.
"We flag things," Roberti said. "We're looking out for small things that just don't seem normal."
Describing the company's vigorous auditing and editing process, Roberti recalls the introduction of the sitcom "I Love Lucy," in which Lucille Ball packages candy on a conveyor belt. It seems like a small and mundane task, but Roberti said jobs like that must be carried out consistently with precision to ensure the product's integrity.
Line-by-line scrutiny is the bread and butter for Premier, which serves 213 clients, including third-party administrators and health insurance companies.
"If administrators tried to do it themselves, they'd be bottlenecked in minutia," Roberti said.
In addition to flagging mistakes, Premier helps clients with negotiating strategy. Its employees include certified claim editors, certified negotiators, nurses, pharmacists and physicians. The company's New Jersey work force has grown to 120, up from 57 in 2010, and head count adds up to nearly 200 nationally, with sites in Atlanta and Scottsdale, Ariz.
Roberti said last year the company produced $250 million savings for its clients, drawing its revenue from 20 percent of that total. Clients include Hertz, Ritz-Carlton Hotels, school districts and welding companies. And its growth strategy is working: Inc. Magazine last year ranked Premier, which reported $7.7 million revenue in 2008, among the country's fastest-growing private companies.
Premier's approach of conditioning payments on finding savings is a principle that has helped attract outsider interest.
Edison Ventures, a Lawrenceville venture capital company, invested $4.4 million in Premier in September 2010, with Chris Sugden, a managing partner at Edison, saying the company's willingness to put its credibility on the line enhances its appeal.
"It's a business model where the company's interests are aligned with the customer's," Sugden said.
At the time of its investment in Premier Healthcare Exchange, Sugden said the company already was growing revenue at an estimated 50 percent annually, and had been profitable since its inception in 2001. Premier's technology, which enables it to process vast amounts of claims in short times, also is a plus, Sugden said.
The investment from Edison Ventures Fund VII, a $249 million fund targeting financial, health care information and other companies, helped the company grow staff, sales and shareholder liquidity, according to the New Jersey Economic Development Authority.
Kathleen Coviello, director of the EDA's technology and life sciences division — which supported Edison Ventures Fund VII with a $2 million contribution — said Premier is an ideal recipient of investment capital. Coviello said demand for health care savings, coupled with the company's deep pool of talented New Jersey-based executives, bodes well for its future plans.
"They really bring an experienced, well-trained executive team married with the potential of a young and emerging company that is well positioned for growth," Coviello said.
Roberti said the support from Edison Ventures catapulted Premier during its early stages.
"It was critical," he said. "Their work was very helpful in helping us expand, not just in capital investment, but in guidance."
Looking ahead, the company plans to grow through product development and acquisitions. It has launched PayPlus, a Clearwater, Fla.-based subsidiary, that enables electronic payments and explanations of payments to health care providers.
The company is also looking for more space, having reached the limit of its Crossroads Drive facility. Roberti said it's likely the company will expand at or near its Bedminster offices.
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