Red tape?  Entrepreneur can cut through it

Unified Health Services CEO makes workers comp work

By Daniel Connolly
daniel.connolly@commercialappeal.com

Doug Marchant has found an obscure but profitable business niche within the complex world of health care economics.

A poster in the foyer of his Cordova business, Unified Health Services, sums up what the firm does: It shows a small figure standing in front of huge, intimidating letters that spell out "Workers Comp." A reassuring slogan is in smaller letters: "Workers comp is our work."

Marchant says many hospitals, clinics and other health care businesses have a hard time processing claims for workers' compensation, the form of insurance that covers on-the-job injuries.

"It's a mess for doctors," he said.

His firm steps in and offers to obtain insurance payments for the medical businesses in exchange for a cut of the reimbursement.

Marchant launched Unified Health Services in 1997 with partners Michael Reece and Joe Ward. A fourth partner, Don Kilgore, joined later.

The most difficult part of launching the business was proving that the idea would work, Marchant said.

"It's a totally new concept," he said. "Nobody was doing it."

It took about four years for the company to become profitable, but it now handles tens of thousands of claims per year and had 2006 revenue of about $50 million, he said. Marchant wouldn't release profit figures.

Marchant, a serial entrepreneur with a background in mathematics and computer science, is slated for induction into the Society of Entrepreneurs on April 21.

The Memphis-based group offers membership to people who have shown their ability to guide new businesses to maturity and who meet the group's standards for integrity.

Today, Unified Health Services' clients include health care businesses around the nation. A major selling point is the firm's guarantee that it will pay the client in 60 days, regardless of whether the insurer has agreed to cover the claim or not.

Workers' compensation creates numerous hurdles for health care businesses, Marchant said. The first problem is that many workers don't know who their workers' compensation carrier is, he said, leading to questions about where to send the bill.

And regulations vary widely.

"Each state sets their own fee schedule and the laws or the regulations for that type of (workers compensation) comp insurance," he said.

For instance, the reimbursement for an X-ray in Mississippi is different for an X-ray in Tennessee, he said. That can create problems.

"If (a truck driver) is driving from Washington and gets hurt in Memphis, who gets that claim?" he asked.

Processing claims can take months and require repeated written filings, and health care businesses are usually unskilled in dealing with the confusion because workers' compensation claims are often a small part of their business, he said.

Unified Health Services focuses solely on workers' compensation claims and uses economies of scale to help clients, Marchant said.

It attempts to streamline the process by requiring its health care clients to send in a fax when a workers' compensation patient arrives at the clinic or hospital. The health care businesses send the bills to Marchant's firm, which in turn works with companies like Liberty Mutual and AIG to obtain payment.

During a quick tour of the office, where employees in cubicles work the phones with insurers and clients, Marchant pointed out empty space the business plans to use for expansion.

He says it took some risks to bring the business to this point.

"The medical field is like a fraternity," he said. "Everybody knows everybody. If you fail, you're doomed."

- Daniel Connolly: 529-5296

Copyright, The Commercial Appeal, Memphis, TN. Used with permission. (http://www.commercialappeal.com)