aprima medical software award write up

2017 United States Ambulatory Revenue Cycle Management

Product Leadership Award

BEST PRACTICES RESEARCH

© Frost & Sullivan 2017 2 “We Accelerate Growth”

Contents

Letter of Congratulations ............................................................................................. 4

Background and Company Performance ........................................................................ 5

Industry Challenges .............................................................................................. 5

Product Family Attributes and Business Impact ........................................................ 5

Conclusion........................................................................................................... 7

Significance of Product Leadership ................................................................................ 8

Understanding Product Leadership ................................................................................ 8

Key Benchmarking Criteria .................................................................................... 9

Best Practices Award Analysis for Aprima ...................................................................... 9

Product Family Attributes ...................................................................................... 9

Business Impact ................................................................................................. 91

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12

The Intersection between 360-Degree Research and Best Practices Awards ..................... 13

Research Methodology ........................................................................................ 13

About Frost & Sullivan .............................................................................................. 12

Copyright ................................................................................................................ 12



Letter of Congratulations

We are proud to present you with this year’s Award for best practices in Product

Leadership in the Revenue Cycle Management (RCM) industry.

Frost & Sullivan’s global team of analysts and consultants continuously research a wide

range of markets across multiple sectors and geographies. As part of this ongoing

research, we identify companies that maintain consistently high standards for product or

service quality and innovation, allowing them to form deep relationships with their

customers. This involves extensive primary and secondary research across the entire

value chain of specific products. Against the backdrop of this research, Frost & Sullivan is

pleased to recognize Aprima® Medical Software, Inc. as the Product Leader in the U.S.

RCM market for physician practices.

To achieve product leadership is never an easy task, but it is one made even more difficult

considering today’s competitive intensity, customer volatility, and economic uncertainty—

not to mention the difficulty of innovating in an environment of escalating challenges to

intellectual property. Within this context, your selection as recipient of this Award signifies

an even greater accomplishment.

Moreover, we recognize that your receipt of this Award is the result of many individuals

(employees, customers, and investors) making daily choices to support the organization

and contribute in a meaningful way to its future. We enthusiastically acknowledge and

celebrate these achievements.

Once again, we congratulate you on your achievements and wish you great success in the

future. We are here to support you on any future endeavor.

Sincerely yours,

David Frigstad

Chairman

Frost & Sullivan



Background and Company Performance

Industry Challenges

Despite widespread adoption of basic Revenue Cycle Management (RCM) solutions, most

US physician practices still grapple with low operating margins, resulting from poor

Account Receivable (A/R) performance and high average denial volumes. Many attribute

this inefficiency to their suboptimal knowledge and implementation of value-based RCM

pathways which require heavy investments on RCM IT for efficient claims processing, and

mandate deployment of experienced RCM staff for optimizing collection of risk-based

revenue and improving patients’ payment experience.

Most hospital-owned large practices that embrace various alternate payment models also

acknowledge the need to deploy next-generation RCM solutions capable of digitizing the

entire billing ecosystem. This view is due to the growing adoption of payer contracts with

specific provisions for efficient claims management, in addition to the need to bring on

new capabilities to meet the increasing financial responsibility of patients with

coinsurance and large deductibles.

Due to such complexities associated with payment reform, the US ambulatory RCM market

is poised to embark upon comprehensive RCM outsourcing. As a result, the importance of

external RCM services is gaining favor among certain ambulatory physicians. These

providers are likely to prioritize procurement of outsourced RCM services based on

implementation evidence and cost/benefit benchmarks. Hence, going forward, physician

practices are expected to rely on RCM services vendors who provide proven expertise in

optimizing financial performance through error-free clinical documentation, successful

ICD-10 transition, automated payment preauthorization and robust RCM analytics.

Because the US RCM vendor environment is still maturing, providers are going to seek

expert advice to prioritize vendor contracts that best complement their incumbent value-

based payment arrangements and RCM ecosystems.

Product Family Attributes and Business Impact

Match to Needs

According to Frost & Sullivan’s recent research on the US RCM market, providers are in

dire need of a range of progressive IT solutions that can safeguard their profitability as

they prepare to attribute more net patient revenue to care quality or outcomes. Top

business objectives driving adoption of next-generation RCM solutions include:

Development of value-based revenue pathways

Financial performance improvement



Comprehensive regulatory compliance and corporate risk mitigation

Elimination of preventable operational expenses

Prioritized alignment of RCM staff for better collection

Automation of financial preadjudication for reducing denial volume

Optimization of patient satisfaction through efficient management of financial

coverage

As a result, new growth opportunities around external RCM solutions have gained

precedence among many ambulatory physician practices. Most of them are willing to

invest in advanced RCM capabilities that can streamline performance of all RCM

departments (front end and back end), namely,

Patient access

Registration and charge capture

Billing and collection

Aprima is ideally positioned to cater to these industry requirements. Aprima Revenue

Cycle Management, its flagship RCM platform, combines best-in class technology and

proven billing expertise to enable practices to completely outsource their RCM

departments. Many US ambulatory practices largely rely on Aprima to optimize cost and

collection through better eligibility checking, claims editing and denial management.

Technology coupled with advisory, rendered by skilled RCM staff helps these practices

reduce average A/R durations, enhance corporate revenues and optimize regulatory

compliance in regards to

ICD 10 transition

Integration of CMS Medically Necessary Rules

Prepayment audits and

Adherence to PQRS reporting objectives

Reliability and Quality

Aprima has been a preferred RCM vendor for numerous independent and hospital-owned

physician practices, catering to a combined 70 specialties and sub-specialities, in the

United States. The company also demonstrates an industry-leading client retention rate of

98% due to its persistent drive to provide best-in class technologies and reliable customer

support.



Aprima, through its flagship RCM platform, has a claims engine with more than 20 million

edits and achieves 98% clean claims rates. The company’s US-based workforce assumes

full responsibility to elevate RCM performance of physician practices through monthly

review meetings with key client partners. Its customers greatly value these meetings that

benchmark practice performance, recalibrate project roadmaps, and highlight industry

best practices in regards to RCM. As a result, many customers frequently testify to the

benefits they achieved by partnering with Aprima and tend to embrace long-term strategic

relationships with the company. On average, physician practices that leverage the Aprima

Revenue Cycle Management platform improve collection efficiency by 7% to 9% and

increase revenue up to 29%.

Product/Service Value

Frost & Sullivan’s recent research on the US RCM market reveals that ambulatory

practices embrace a fairly standardized pricing model. The most widely accepted pricing

model remains collection based (monthly fee as percentage of net collection) as many

practices are encountering higher gaps between total claims and net collection due to

factors such as uncollectable debt, untimely filing, and various other non-contractual

adjustments. Today, profitability of physician practices largely depends on willingness to

consider a pre-fixed rate (based on payer mix, specialty, and required level of RCM

automation) through which all RCM services, necessary for improved net collection, can be

procured. This is widely acknowledged as a pricing best-practice for billing solutions, but

the adoption of this best practice is not widespread due to the maturing service capability

of US-based RCM vendors that are not strategically prepared to enable this. Many

segment overall RCM pricing in multiple components and only few propose a single pricing

for all major services, such as consulting, implementation, training, optimization, and

troubleshooting. Aprima consolidates pricing for most RCM components and allows

customers to realize improved margin on collection as they are not required to allocate

more money on multiple external RCM vendors. This prevents escalation of overall

operational expenses tied to RCM design and deployment.

Positioning

Frost & Sullivan, through a comprehensive assessment of the US ambulatory RCM market,

has identified several unmet provider needs. The company acknowledges that many

practices are either merging with large hospitals or going out of business due to severe

financial pressure, resulting from increasing enrollment in high-deductible health plans

and poor collection from patients with co-pay arrangements. This can be further attributed

to these practices’ inability to reduce A/R durations, spot underpayments, and manage

denials.

Aprima is best positioned to address these critical industry challenges as it equips

practices with best-in class technologies and superior customer support. Its account

management team helps practices identify coding omissions and prevent underpayment



through payment comparison with contract allowances. The US-based team also assesses

denials and renders regulatory support so that each ambulatory customer can achieve

higher reimbursement quicker. On average, its ambulatory customers get paid 13 days

earlier than others in the industry, as benchmarked by MGMA. For most customers, the

average A/R duration remains within the 30-days threshold. These ambulatory customers,

according to MGMA’s latest benchmarking study on A/R, can also be classified as ‘better-

performing’ practices in the US market.

Financial Performance and Customer Acquisition

Aprima reported best-ever and double-digit growth in revenue and EBITDA in for its fiscal

year ending March 31, 2017. Aprima’s strong financial performance can be attributed to

new revenue obtained through new contracts and recurring revenue collected from

incumbent customers for which the company reported a 98% retention rate. In 2016, the

company won three contracts worth more than $1 million each. Additionally, Aprima best

positioned its home visit solutions to win multiple contracts with large provider groups

(40+ members) that were striving to demonstrate capabilities that empower patients to

stay connected with their providers after discharge. Aprima EHR, the company’s flagship

EHR platform, also helped the company secure 4 more contracts from university or

hospital-acquired physician practices. The company is reported to be best suited for

ambulatory providers that are replacing their incumbent EHR vendors due to their inability

to optimally enable value-based care principles and attest to MU objectives. Aprima is also

effectively catering to ambulatory practices that require error-free claims processing and

timely alert on key RCM issues (regulatory or technical).

Aprima’s best-in-class customer acquisition strategy for new accounts and evidence-based

product enhancement (such as Spanish language compatibility in its Patient Portal,

introduction of Aprima Mobile for providers with Spanish language support) efforts for

existing accounts will enable the company to continue unprecedented revenue growth

through 2020.

Conclusion

Aprima exhibits proven expertise in optimizing the entire RCM value chain comprising

components such as patient access, clinical documentation, claims processing, denials

management, and outcomes measurement. With its strong overall performance, Aprima

has earned Frost & Sullivan’s 2017 Product Leadership Award for the U.S. Ambulatory

RCM market.



Significance of Product Leadership

Ultimately, growth in any organization depends upon customers purchasing from a

company and then making the decision to return time and again. A comprehensive

product line, filled with high-quality, value-driven options, is the key to building an

engaged customer base. To achieve and maintain product excellence, an organization

must strive to be best-in-class in three key areas: understanding demand, nurturing the

brand, and differentiating from the competition.

Understanding Product Leadership

Demand forecasting, branding, and differentiating all play a critical role in finding growth

opportunities for your product line. This three-fold focus, however, must be complemented

by an equally rigorous focus on pursuing those opportunities to a best-in-class standard.

Customer communications, customer feedback, pricing, and competitor actions must all be

managed and monitored for ongoing success. If an organization can successfully parlay

product excellence into positive business impact, increased market share will inevitably

follow over time.



Key Benchmarking Criteria

For the Product Leadership Award, Frost & Sullivan analysts independently evaluated two

key factors—Product Family Attributes and Business Impact—according to the criteria

identified below.

Product Family Attributes

Criterion 1: Match to Needs

Criterion 2: Reliability and Quality

Criterion 3: Product/Service Value

Criterion 4: Positioning

Criterion 5: Design

Business Impact

Criterion 1: Financial Performance

Criterion 2: Customer Acquisition

Criterion 3: Operational Efficiency

Criterion 4: Growth Potential

Criterion 5: Human Capital

Best Practices Award Analysis for Aprima

Product Family Attributes

Criterion 1: Match to Needs

Requirement: Customer needs directly influence and inspire the design and positioning of

the product family.

Criterion 2: Reliability and Quality

Requirement: Products consistently meet or exceed customer expectations for

performance and length of service.

Criterion 3: Product/Service Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market.

Criterion 4: Positioning

Requirement: Products or services address unique, unmet need that competitors cannot

easily replicate or replace.

Criterion 5: Design

Requirement: The product features an innovative design, enhancing both visual appeal

and ease of use.

Business Impact

Criterion 1: Financial Performance

Requirement: Overall financial performance is strong in terms of revenues, revenue

growth, operating margin, and other key financial metrics.



Criterion 2: Customer Acquisition

Requirement: Product strength enables acquisition of new customers, even as it enhances

retention of current customers.

Criterion 3: Operational Efficiency

Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high

quality standard.

Criterion 4: Growth Potential

Requirements: Product quality strengthens brand, reinforces customer loyalty, and

enhances growth potential.

Criterion 5: Human Capital

Requirement: Company culture is characterized by a strong commitment to product

quality and customer impact, which in turn enhances employee morale and retention.

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and

assess their fit with select best practice criteria. The reputation and integrity of the

Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors

Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning of all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized Award candidates

6

Conduct global industry review

Build consensus on Award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing success stories worldwide



STEP OBJECTIVE KEY ACTIVITIES OUTPUT

7 Perform quality check

Develop official Award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

Review analysis with panel Build consensus Select recipient

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

Present Award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company is able to share Award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees

The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and

demographic analyses. The integration of

these research disciplines into the 360-

degree research methodology provides an

evaluation platform for benchmarking

industry participants and for identifying

those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation, and implementation

of powerful growth strategies. Frost & Sullivan leverages more than 50 years of

experience in partnering with Global 1000 companies, emerging businesses, and the

investment community from 45 offices on six continents. To join our Growth Partnership,

please visit http://www.frost.com.

Copyright

This research is owned by Frost & Sullivan. No part of this research may be disclosed to

external parties without formal written permission from Frost & Sullivan. Furthermore, no

part may be reproduced, stored in a retrieval system, or transmitted in any form or by

any means, electronic, mechanical, photocopying, recording or otherwise, without the

written permission of Frost & Sullivan.

Aprima is a registered trademark of Aprima Medical Software, Inc.

http://www.frost.com/

aprima medical software award write up

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