Other IR ReplyI had another interaction with Scott this week. It goes like that:
Hello Scott,
Thank you for your reply to my last question. It was very helpful.
I found a study in the Journal of the American College of Cardiology published in March 2020 named " FROM ELECTRONIC MEDICAL RECORD INTEGRATION TO REIMBURSEMENT: PRACTICAL IMPLICATIONS OF CHRONIC CARE MANAGEMENT THROUGH A REMOTE PATIENT MONITORING (CPT 99091) CARDIOVASCULAR PROGRAM ".
They offered RPM to patients from Jan 2019 to June 2019 and billed the CPT 99091 code. In the Results section of the study, it states " $36,600 in charges were submitted with $5,203 in payments received ". Which means they had a revenue collection of only 14% in 2019.
Reliq doesn't look to be the only one in the sector who has had a revenue collection issue.
This leads me to the following questions:
1) Does Reliq use the CPT 99091 code? I haven't seen it in any of the investor presentations or the news releases. If yes, what has Reliq done to have a better revenue collection ratio than the previous study?
2) The accounts receivables in the financial statements keep increasing quarter over quarter, more than revenue. There are cleary bills that have been in accounts receivables for more than 3 months. (In the last financials, trade receivable was 779 534$ and revenue was 457 077$). How long does it take for it to be considered as bad debt? Could the increase in trade receivable be explained by revenue collection issues?
3) What is Reliq's allowance for doubtful accounts? I doubt 100% of claims are reimbursed, especially with all the criteria for RPM codes.
I think Reliq is heading in the right direction and it is normal to have bumps in the road, I am aware of how hard it is to build a new IT solution in a fairly new healthcare sector. Thank you in advance for clarifying my questions.
Best regards, Answer: Thank you for your continued interest in Reliq. Please find my answers below.
1) 99091 is an older code that is not really used that extensively compared to other similar CPT codes
CPT 99091 has been around for more than a decade, but it has limitations. It can still be used, but it doesn’t offer reimbursement for setting up equipment or educating the patient on its use, it’s limited to “physicians and qualified health care professionals” rather than clinical staff and it requires at least 30 minutes of professional time dedicated to the patient per 30-day period, although it does not require “interactive communication with the patient or their caregiver” like 99457. 99457 and 99091 cannot be billed concurrently.
2. No. Receivables are mostly due to our collection terms and not due to collection issues. If we have extended terms to a client and they are within those terms it is not bad debt.
3. We don’t know our clients reimbursement rates since our payments are not tied to them. We are paid for a service that we provide whether or not the client receives payment. One of the reasons for using Reliq’s software is to ensure full compliance. Using a paper system or less sophisticated software can lead to inadequate support for submitted claims. Also if two services that are not eligible to be performed in the same month are submitted, one of the claims will be denied. All of our customers receive a monthly report that outlines which services can be billed for each patient based on the data in the software. I suspect the rejection rate is quite low for Reliq’s customers. For Care Management that Reliq performs on our customer’s behalf, less than 10% will not meet the criteria for billing but those will not be billed. The cost for those is built into the overall cost and pricing for the service.
I hope I was able to answer your questions.
Best Regards,
Scott
Scott Fitzgerald
Investor Relations
Reliq Health Technologies, Inc.