Two Steps Ahead of Industry Evolution, MIT Holding, Inc. (MITD) Pioneers Modern Healthcare
On MIT Holding’s website, you’ll find the tagline “Leading the way for today and the next generation.” Catchy, but what exactly does that mean? MIT Holding is a single-source provider for in-home medical recovery services. Sounds simple enough, but it’s an innovative business model based on a quiet evolution within the healthcare industry and the company’s foresight to prepare for and capitalize on impending industry changes.
MIT Holdings partners with hospitals, physicians, facility-based providers, pharmaceutical manufacturers and other contractual affiliates to provide patients with sweeping out-patient services. The company meets and/or exceeds major U.S. health insurance requirements, which enables them to directly bill and receive payments from carriers on behalf of the patient as well as company agents and facilitators.
Here’s how the actual recovery services platform works. Upon his or her release from the hospital, a patient meets with a discharge planner who is responsible for helping the patient transition to the next level of care. Depending on the procedures performed, this transition can take weeks, months or years, and in some cases for the remainder of the patient’s life.
When in-home rehabilitation is recommended, the planner would refer the patient to MIT Holding. Through its portfolio of services, MIT Holding then provides its comprehensive medical products through a concierge type service at no additional cost to the patient.
The patient may need a range of services from ambulatory, infusion, durable medical equipment (DME), pharmacy services, improved sanitary spaces, transportation and other recovery services or products. MIT Holding can arrange any or all of these services for the patient. This contractual model creates numerous revenue streams for MIT Holdings along with tremendous cost savings for the patient and insurance company.
“The goal is to provide a non-stressful healing environment possible. The belief is recovery will happen much faster because we meet patients in their home environment, not in a stressful sterile medical facility. The patient completes recovery quicker, insurance company pays less over time creating a win-win situation,” says William Nalley, president of the Orsay Group, Inc., and IR advisor for MIT Holding.
The Affordable Care Act creates pressure for hospitals and doctors to lower costs, and as a result, more people are being discharged earlier from hospitals to reduce the cost of patient care. The cost-saving aspects of MIT Holding’s innovative platform are part of the reason the company believes its business model will be a solid and widespread component of the healthcare industry.
“The Affordable Care Act is a positive for us … one thing it is requiring of hospitals, doctors and medical care in general, is lower prices for services. For the patient, that typically equates to a quicker exit from the hospital or medical facility. We’re the company ¬with our arms open wide saying ‘come to us, we’ll pick up where they left off.’ Imagine if on the last day of your hospital stay you phoned downstairs to the concierge desk and asked: ‘Can you please arrange everything for my home recovery please?’ MIT representatives will come to your room and meet with you to make those arrangements,” Nalley explains.
MIT Holding’s model is an active model. Through its current portfolio of services, the company can arrange for patient pharmaceuticals, intravenous infusions, medical management services, in-home or ambulatory center therapies. The durable medical equipment services (DME) enable the company to offer for sale or rent, home medical equipment, from crutches to hospital beds.
MIT Holding has beta tested its single-source provider concept in Georgia, and to management’s knowledge, is the first to provide this type of comprehensive service within the home medical services industry. The company’s goal is to use its industry-pioneering business model to maintain a number one position in this new industry concept and expand with a nationwide footprint via strategic acquisitions. To achieve this goal a one acquisition per each quarter is the 2015 corporate goal.
“We have the platform for these services in place and we’re ready to duplicate state-by-state,” says MIT Holding chairman and CEO Walter Drakeford. “It’s a tall order to fill, but the company has a clearly defined plan to achieve this mission. The business model is more than gobbling up the first acquisition target to come along. At the core of this precision-based strategy is facility accreditation.”
Accreditation ensures that a facility adheres to certain procedures and guidelines set by each state to insure services and billing are correctly rendered. It’s basically a way to make sure people aren’t opening up companies in the garage of their homes and billing services for deceased patients.
The accreditation process is extremely thorough, taking into consideration various information in 12 different divisions and covering everything from operations to billing, finances and small day-to-day activities. It’s this meticulousness that deters many medical facilities from ever becoming accredited. While it’s not mandatory that facilities become accredited, every supplier of medical equipment has to be accredited to be able to contract with Medicare. Additionally, accreditations must be renewed every two years.
This accreditation is an integral part for MIT Holding’s relationship with its more than 130 insurance provider partners. One of MIT Holding’s affiliates started its accreditation process January 1 to prepare for the June 6, 2015, expiration.
“Preparing for [the accreditation] on the company’s end is something that is time consuming and difficult, but it’s making sure that we have everything in place; which we do,” stated a representative assisting in MIT Holding affiliates accreditation renewal process. “It’s important that the accreditation is passed and every employee is up to par in terms of what the company stands for and what the company requires us to do.”
In fact, if the affiliate had chosen not to renew its accreditation, MIT Holding would have scrapped the partnership; here’s why. The Affordable Care Act does not affect the accreditation process. As such, the accreditation itself has helped legitimately operating companies while unraveling the operations of those that were not.
For example, at one time, the cost of care for patients on oxygen was never capped-out. The insurance company could be billed for the oxygen for as long as the patient lived, whether or not the supplying company ever had contact with the patient. Under the Affordable Care Act, oxygen gets capped out at 36 months. At this point, the supplier has to maintain contact with that patient to make sure they indeed are alive and in need of oxygen. In essence, the Affordable Care Act came in and cleaned house.
“An accreditation sticker on your door shows that you are a reputable company – that you do things beyond the norm in terms of standards. You have had a third party come in and review everything and they have stamped you with a seal of excellence. The accreditation process now has become something that everyone strives to have, not only for insurance reasons but also to show to the community the physicians and the patients that you are a legitimate company upholding the highest patient standards,” says Drakeford.
Here’s where it ties back to MIT Holding. As earlier noted, MIT Holding’s aggressive expansion strategy calls for an acquisition per quarter – however, acquisition or affiliate targets lacking accreditation or not in the process of doing so won’t get a second look from MIT Holding. And it’s been that way for years, according to Drakeford.
“MIT had the foresight two years ago to look at the Affordable Care Act and see the benefits and how to achieve the best results for the company, our patients and our shareholders by adhering to accreditation standards and exemplifying those requirements for anybody we bring on board to duplicate our platform in other states,” he says. “As MIT continues to grow, the affiliations and affiliates that we work with must be accredited. If you’re not professionally respected in your category, you’re not an MIT candidate.”
The company expects that in the next 5 to 10 years it will be mandatory that everyone will be accredited. If true, the requirement would squeeze the number of people that are entering the industry because the standards and expense will be too high. On that note, MIT Holding will be ahead of the game.
“Whether it be on the DME side, the pharmacy side, ambulatory side or infusion side we are seeing certain criteria starting to slowly come into play that in the next 10 years will be factored into whether a company will succeed or fail,” says Drakeford.
MIT Holding plans to duplicate its platform across the U.S. by assembling a portfolio of key affiliates and acquisitions that not only meet accreditation standards, but MIT Holding standards as well.
Among several other criteria, MIT Holding is looking for profitable acquisition targets with a spotless billing history and strong management with an established set of internal controls in place. Accreditation is also a requirement, though companies in the process of accreditation or positioned to initiate the process will be considered. MIT Holding has a few acquisition targets that fit the bill and that are currently undergoing due diligence.
In June, 2014, MIT Holding achieved its first profitable quarter in six years thanks to corporate re-organization initiated in fiscal year 2011. Each MIT Holding subsidiary is now operating with objectives of a 32% net profit. The MIT concept can still deliver services and goods for less than the local medical facility.
Leveraging this improved position, MIT Holding has developed a platform years ahead of its time. As hospitals discharge patients earlier to lower hospital costs, and as accreditation moves toward potential mandate status rather than an option, the company’s strict accreditation policy adds power to its charge at the head of the pack. With patient care in order, MIT Holding is now focusing on shareholder value.
“The accreditation is an example of the height of the demands MIT Holding has on anybody affiliated with the company, which ultimately will reflect through to revenues, shareholder and company valuation,” says Nalley. “We’re now in a position that we can duplicate what’s occurred in Georgia in any other state in the country. MIT makes an acquisition of a facility within that target state, bringing them under our umbrella – and we’re now marketing in that state. Growth of MIT Holding will be the ultimate reward to the shareholder.”
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