HIStalk Interviews Reed Liggin, CEO, SlicedHealth

Reed Liggin, RPh, MBA is co-founder and CEO of SlicedHealth.

Tell me about yourself and the company.

I went to University of Georgia College of Pharmacy and got into healthcare as a hospital pharmacist. I got  an opportunity to get into health tech in the e-prescribing field in the late 1990s. I worked for a California company that flamed out in the dot-com bust of 1999. I worked briefly for Allscripts as it was becoming an EHR company, and from there I went to McKesson and started selling the number one hospital pharmacy system in the market that they had acquired. I built my career at McKesson, which is where I really learned the business.

I started my own company, RazorInsights, in 2009 with a couple of friends from McKesson. I worked there for almost three years and we had an exit in 2015 to Athenahealth. I was then hired as CEO of EazyScripts in Chicago. We were doing e-prescribing for telemedicine. We successfully sold that company in the spring of 2019. From there, I got together with one of my co-founders from the Razor days, Mike McKenzie, and three other seasoned health tech guys who had worked for us at Razor and Athena to start SlicedHealth.

Our goal was to solve the payer contract intelligence problem for community hospitals, which largely lacked solutions. Going back to the Razor days, we got asked about contract management and payer contract intelligence a lot. As the problems of denied claims and underpaid claims exacerbated over the last few years, we saw a great opportunity to serve that part of the market. 

Today we serve 140 clients in community hospitals under 400 beds across the country, and many of those are under 100 beds. We also have some larger health systems, and we also serve specialty practices like orthopedics, pain management, and women’s health. We offer payer contract intelligence, hospital price transparency, claim estimation for the No Surprise Act, and business intelligence. We recently introduced embedded artificial intelligence, which is called SlicedIQ. Clients can pick any module or combination of modules that suit their needs. We launched in January 2020, just in time for the pandemic, and have been doing this for just over six years

What creates the situation that you call hidden underpayments and what is the financial impact of fixing it?

I don’t want to totally point the finger at payers, but I will point the finger at the payers to a degree. They use sophisticated technology, including AI, to deny claims for various reasons. They are often good reasons, such as where the provider hasn’t put the right information into the claim or has made mistakes on their side, and they are sending it to the payer incorrectly. But often we see systematic denials of claims for a variety of reasons, and we often see claims that are underpaid where something in the contract is not adhered to. It is inefficiency in a highly complex system.

It’s interesting that the customer has to buy the technology to catch their vendor trying to cheat them. Would a payer that doesn’t follow the contract ever be assessed financial or legal penalties?

I’m not aware of any. Providers that are large enough could probably take those things to court and get some restitution. But smaller providers, such as independent community hospitals and practices, have a lot less leverage to fight those sorts of things.

Many people don’t know how bad the problem is. Or they know, but it’s a lot worse than they think. There has been a lack of awareness over the last few years. We saw a big technology gap in certain parts of the market, independent specialty practices and smaller community hospitals. Their core vendor might have a contract management module or some old technology that didn’t do the best job in the world and relied on the client to do the install and maintenance work. It was a big burden for organizations that are already resource constrained. That was the problem we set out to solve.

Does provider adoption of technology level the playing field, or does it just force both sides to one-up each other as in AI wars?

It absolutely levels the playing field and makes the system more efficient. We take in claims data every night through a file drop in the cloud from the claims clearinghouse that the organization uses. As claims are processed nightly, users can review the next morning what hasn’t been paid correctly. You can get on top of these problems quicker and with a high degree of accuracy.

How do large health systems address the issue differently?

Epic and Oracle offer strong native technology in their platforms. As you get above 400 beds, there’s a lot of penetration and use of this technology that we found was not being used in those community hospitals. We had discovered, through our time at Athena and afterward, that a lot of specialty practices were not using that technology as well.

Is it inevitable that revenue cycle is complex when companies are making money from that complexity?

Absolutely. Healthcare is inherently complex and participants can benefit from leveraging that with technology, such as gaming the system by holding on to money longer.

Everybody expected the heaviest use of AI to be in imaging and clinical work, but the big expectations and the gold rush often involve revenue cycle management. How do you run a business around that when AI changes literally every day?

You just described a day in my life right now. As a management team, we are huddling almost daily on how fast things are changing because of artificial intelligence.

I’ll give you a good example. We released our SliceIQ platform, which embeds AI in the payer contract intelligence platform. You had the ability to get step-by-step instructions on how to resolve a claim that had been denied or underpaid, generate an appeal letter, that sort of thing.

We came out with that last November. By January, a half dozen companies were doing the same thing. They tended to be niche companies, startups around AI technology to specifically address mainly pre-adjudication claims issues to prevent them from happening in the first place, but resolving them post-adjudication as well. They were companies that I had never heard of, so we will see if what they are doing is real. We are starting to see some bigger players in the clearinghouse space and the EHR side that are starting to come out with that same sort of technology.

For us as a small company, we have a nice customer base. We were trying to figure out how to solve unique problems in the midst of all this. We are focused on payer contract intelligence, because only a few companies do it and even fewer of them do it well. We are making sure that we carve out what I call our little blue ocean of unique problem solving, while a vast red ocean of people are trying to use AI to automate everything in the revenue cycle.

A payer recently announced that their analysis showed that providers are upcoding, as evidenced by lack of diagnosis or treatment for what they billed. Will it become a trust but verify situation, where providers will need to submit more data or payers will take on the role of clinical auditor?

Absolutely. As the technology enables it, the bar will be raised. You have value-based care as well. We’ve held off moving into that and the jury is out on where it will go, but it seems to be starting to grow. That’s an area that we will help our clients solve.

As a pharmacist, what do you think about how pharmacy has changed? Are you happy with the contributions that technology has made?

It has been overcomplicated by being part of Meaningful Use. Interoperability should have been job one, but it got pushed to the back burner. It doesn’t feel like we are as far along as we should be in some ways.

In other ways, pharmacists in particular are using technology in a very good ways. Nobody has to read physicians’ handwriting any more. We eliminated a lot of safety issues around illegible handwriting and drug interactions that weren’t being caught. From a safety standpoint, we’ve come a long way across all clinical systems.

But it’s still an issue that when you go to a couple of different doctors, if they aren’t using the same system, good luck in being able to share information. We’re still a long way from where we need to be. That’s been frustrating for me as a clinician, where I go to one specialist and then another specialist, they are on completely different systems, and I have to educate them on what’s going on with my whole record and hope they get it right.

The terms CPOE and e-prescribing aren’t used much these days since those are now standard. Will we see other areas where technology will become an expected piece of plumbing that replaced processes that we barely remember?

As someone who is sitting in the claims and revenue cycle space, I don’t think it will get any simpler anytime soon, especially as you introduce VBC contracting and all the data that it will require. The bar will continue to go up as far as what providers need to provide to make sure that their claims are paid properly. Trust but verify systems will ensure that they are getting paid exactly what they are supposed to be.

On the clinical side, I haven’t thought through what will become automated. I assume that prior authorization will get there, but that will still require payers to get some uniformity to make it possible. I tell my team that if you’ve done one claims appeal, you’ve done one claims appeal, because they are like snowflakes. Prior authorization is not much different.

How much of the eventual success of an early-stage company is the result of planning versus just reacting to events as they happen?

I think it’s reacting. We started this business with payer contract intelligence, or payer contract management if you want to call it that, as a goal. But we really started it around business intelligence. Then a pandemic happened, the price transparency law came along, and the No Surprises billing act came along. We just continued to react to those things. They led us down a path to what has become our flagship product, which is payer contract intelligence. But if you had asked me on day one if that was the path that we would take, I don’t know that I would have said that.

Particularly with AI and how fast things are happening, you have to react well to change. You set a plan, but you will have to adjust that plan. We like to stay focused. We have had a lot of opportunities to build other things in the revenue cycle besides payer contracting and price transparency, which uses essentially the same data. We have resisted that, because we want to stay focused. Having built a whole EHR system, with clinicals and financials [laughs], I’ve learned that’s certainly a better way to run a business.

Do you see a day where AI allows tiny companies that have few employees to be major players in health tech or healthcare in general?

I do. We have a project going on where we have been able to do some amazing stuff with AI, and we will be pushing out a couple of new products in the next couple of months. Really it was one person who was behind all of that. AI is going to create opportunities for people to create things and fill in gaps. What I’ve always done in healthcare is to look for gaps where certain providers were underserved or missing capabilities or services that they needed. AI will give people the ability to get there faster with a lot less capital.

What is the company’s strategy over the next few years? 

We want to continue to be known as the best, fastest payer contract intelligence company in the market. We will continue to push up-market. We focus on three key things for our clients. Taking the work off their plate of the build and maintenance of the system and getting them live faster than traditional companies have, and using AI to lean into that those two things to service our customers better. The third thing is making our pricing as low as possible. Obviously as a for-profit company you want to keep decent margins, but as we drive our costs down, we will share that with our customers. That will make it a no-brainer for them to want to do business with us.

We see ourselves as a disruptive force because of the way that we build a model contracts faster using technology, and then take the work off our clients’ plates. We will continue to lean into that. Then we will look for ways to expand our value in that payer contract space. We have AI that will give clients advice on how to negotiate a new contract with the payer, what point they should try to negotiate to improve their deal. We are looking at other ways to expand the knowledge that clients will have around payer contracts.