Transcript
Brandon Chase (00:00) hey, Rebecca, how you doing good? How are you? Good. Sorry about that. I think zoom did not let me know you were in the waiting room. So I think you’re just hanging out there by yourself and I apologize. No.
Rebecca Blake (00:13) Worries, I was actually two minutes late and I always feel guilty about it. So it.
Brandon Chase (00:18) Worked out better. Yeah. So no guilt needed here. Yes, you are expunged, how’s your Thursday going so far?
Rebecca Blake (00:27) Good, good. Great. How about you?
Brandon Chase (00:31) So far? So good. I’m in Mountain Time, so just kind of just getting started in.
Rebecca Blake (00:36) Colorado. Is that where you are? Yeah?
Brandon Chase (00:38) Okay. Yeah, nice. Yeah, I’m in a town called Littleton. It’s about, I don’t know it’s 15 minutes outside of Denver.
Rebecca Blake (00:47) Nice. You’re nice.
Brandon Chase (00:48) Yeah. So you got my information from Scott kempa, yes. And I think I’m relatively familiar with, well, at least kind of the broad strokes of your organization just because, you know, obviously we met with… Scott, we met with Dominic and we were kind of talking about what it would look like to sort of centralize the cbo function, you know, for the state unfortunately, that, you know, it never really kind of came to fruition I’m not sure how much Scott told you, but.
Rebecca Blake (01:28) Yeah.
Brandon Chase (01:29) You know, not.
Rebecca Blake (01:31) I mean, that’s the third time they’ve tried to do it over the last 20 years. So, you know, maybe they got farther than previous times… so.
Brandon Chase (01:42) Yeah. I felt like I felt like we were on a good trajectory, but then the obba… came out and that’s kind of what really, I guess hurt. And I don’t know the specifics of what happened in Michigan, but I know Dominic was like basically, it was like everything was on fire because, they were going to be like really scrambling for a lot of medicaid money. So, a lot of the, you know, their attention rightfully so diverted over there. And this became, you know, it didn’t become a priority. It wasn’t a priority anymore. So anyways, I.
Rebecca Blake (02:19) gotta be honest with you. I don’t know that the health plans actually wanted to do it, not mehp, but I don’t you know, it’s not something the health plans willingly wanted to do. So, you know, it made sense to me that, you know, we didn’t get across the finish line this time.
Brandon Chase (02:37) Yeah. And that was kind of our very first question was like who’s driving this? Is it map or is it the health plans, you know? And Dominic was like, well, it’s mostly, you know, it’s we’re pushing it, but he did say like, you know, we’ve been asked by the health plans to see if this is a, if it is a possibility. So, you know, we’re gonna put out an RFP, yada, but we’ve seen it happen before in other states too, and it’s not, you know, it’s not just Michigan. I don’t think any of the health plans want a centralized cbo for the state, you know, it… rarely, I mean, look selfishly, I would like that, but if I’m in their shoes, I could see like, yeah, it’s if you look at, you know, various other states that do have it. It’s just not a great, it’s not a great model. So, yeah.
Rebecca Blake (03:38) It’s one of the many inefficiencies in healthcare.
Brandon Chase (03:42) Yeah. So having said that, I’d love to learn a little bit more about, you know, kind of where you’re at, what, where you’re you know, what you’re thinking, what you’re looking to do and see, you know, if it aligns with anything that we’re looking to do as well. But yeah, why don’t you just kind of start by telling me a little bit about, you know, your cbo and, yeah.
Rebecca Blake (04:06) So, so the cbo is pcvs, professional credentialing and verification service. It’s been in existence for 30 years, 30 Ish years. It is wholly owned by the Michigan state medical society.
Rebecca Blake (04:21) So we are the state level of the American medical association. MSMS is a non for profit, but we do have a holding company which does have several for profit companies within there that creates non dues revenue for the association. We own an insurance agency. We own a like a peer review medical review company, the credentialing company, and then a couple of like smaller revenue sources like endorsed services and things like that.
Rebecca Blake (04:59) So, you know, I’ve been with MSMS for 30 years, but I’ve only really been like intimately involved with pcvs for maybe five. So it’s my understanding. I mean, this is fact that it used to be a very large company. They used to have 20 employees. I don’t know. I don’t know what the revenue source at that point was, but I can find it. I’m sure. And then over the years, I just sort of, you know, lost a little business here, lost a little business there. We’ve kind of, you know, landed where we are today, which is where we’ve been consistently for probably the last three or four years… in the last, in the most recent years before I became, you know, really involved, the last downsizing was because several large health plans that we had contracted with in Michigan decided to do it internally. So as we know health plans, you know, prefer to do that internally because they have a lot more control over their process and their timing and all that. Maybe that’s kind of part of the story of the slow decline. But right now it is three employees. And I’m not an employee. I am, I’m actually employed by the Michigan state medical society, but I am the CEO of as my responsibilities of MSMS. I am the CEO of PCBS and the other subsidiaries. The revenue is about 350,000 a year. We’ve got slow growth over probably the last three years, maybe 10 percent every year. We have about 65 to 70 clients. We’ve processed almost 5,000 applications last year. And then we are ncqa accredited and urac accredited.
Rebecca Blake (06:53) Okay, most of our clients are not most, many of our, many of those clients are MSMS members. So a lot of the physician organizations are also a physician organization, member of MSMS. So we have kept it open for a lot of that reason is, you know, we don’t make a ton of money on it but, you know, it feeds different parts of the organization. So. We were obviously really interested in also what Scott was doing and what mahp was doing. I’ve been involved in that again as I mentioned two other times before then, because the association, you know, has an interest… in that. It’s like a policy position. You know, it is better for physicians to have a central credentialing process, central timing central, you know, whatever it is, everything to be coordinated. So we had been involved years and years ago on that. But this is the first time I’ve been involved in it sort of as, you know, possibly also interested in the RFP process. And I’ve known Dominic and Scott for a lot of years and Tiffany so providing, you know, any information that would be helpful to them, just association to association. So when that just, you know, went away dismantled for whatever reasons, it… has got me thinking of, I really, you know, there’s probably someone that could do this better. You know what I mean? We’ve done our due diligence over the last three to five years to try to grow it and we’re not, you know, we don’t have, we don’t have marketing staff. You know what I mean? With only three people doing credentialing, we’re doing very passive marketing to MSMS membership essentially is what we’re doing. So I was talking to Scott about it because personally, I’ve been trying to hire Scott back, trying to hire Scott at MSMS for a year for I don’t know many years. So we took, and so I don’t know. He just, he got me thinking and I reached out to him and I was just like, hey, who were you talking to during this time? And he said, well, a bunch of people of course, were interested. You know, everybody was interested. A lot of cbos were interested. He’s like. But medallion is the one where, you know, if I was going to point you in the direction that’s the one I would, so, yeah, sort of brings us to today.
Brandon Chase (09:23) Yeah. All right. That’s a great overview and I appreciate that. And I’ll… have to thank Scott for, you know, for the shout out. But yeah, I was, I mean, you’ve known Scott a lot longer than I have, but I was kind of bummed to see him go too, you know, selfishly because I’m like man that’s but I mean, he’s such a good, he’s such a well, he’s a good person, but he’s also very capable, right? So, it’s like, yeah, of course, everybody wants to hire him, right? So it’s you know, he’s.
Rebecca Blake (09:53) a hustler, I love hustlers, he’s a hustler, he’s going to do the work.
Brandon Chase (09:57) Yeah, yeah, exactly. Yeah. It’s like, you know, you can only hang on to somebody like that for so long right? Before, you know, somebody with deeper pockets or whatever comes along and it’s like, wow, this is a great offer. So, of… the, what, okay. Let me ask that. Like what services do you provide? Obviously, you know, you’re doing the credentialing, but are you doing like, are you doing provider enrollment? Are you doing, do you do facilities credentialing? Are you doing, you know, licensing? Are you doing any kind of ongoing monitoring? I’d love to understand a little bit more about like what your, the services that you’re offering are?
Rebecca Blake (10:39) Right. So definitely credentialing and re, credentialing both practices and facilities and health plans. We have a couple clients that we are doing provider enrollment for that’s kind of, a new role for us. And then maybe we’re just one or two doing some licensing for. So the bulk of the business is just, you know, straight, you know, primary source verification.
Brandon Chase (11:06) Gotcha. Okay. And I was trying to do the quick math on that, but you said 350 K annual revenue and that’s broken up between how many customers roughly?
Rebecca Blake (11:19) 55 55 last year?
Brandon Chase (11:26) So, what is, I guess, I could just do this really quick, right? 350 unless you have it, you can save me the embarrassment of my.
Rebecca Blake (11:37) I don’t have it like how much each client? Yeah.
Brandon Chase (11:40) It’s like, okay, so average is like 6,400 dollars. Does that sound right? Right?
Rebecca Blake (11:47) And, I would say, I mean, yes, but I would say we have some big clients, yeah, a lot of work for, and then we have some smaller clients that we, you know, do a couple of things a year for. So we also have some clients that we just do deafmaster panels for, and then some that we just do monitoring for too. So.
Brandon Chase (12:09) Got it. Okay. Oh, we’ll.
Rebecca Blake (12:12) do what people want us to do. You know what I mean? Like it’s not like we have the model if somebody asks us, we’re like, yeah, we’ll do it.
Brandon Chase (12:19) Yeah, that’s kind of where what I was thinking. And actually it’s you know, that’s kind of one of the core differences for better for worse, right? It is what it is, but we have a little bit more of a kind of a prescriptive offering if you will. Typically… we have like a 50,000 dollar minimum… for a singular customer? Okay? Depending on how, you know, if, you know, if my leadership is interested in this, I’m sure there might be a way that this could be structured in a way that could potentially meet that 50,000. But, the thing that I would be concerned with is like I could pretty much guarantee that some of those one off things that you’re doing like ofac or deathmaster or anything like that, just like the one offs or a couple of times a year like that’s. That’s not going to happen.
Brandon Chase (13:20) I would say with medallion… obviously, that’s… one of the benefits of going with kind of a, you know, a smaller boutique firm is that you’re able to offer those more of those white glove services where we’re like, you know, we’re just more, you know, we’re a tech enabled platform. And like, we have to make our money on volume. So, you know, I guess having said that, I’m just trying to think of like, what we could do, what, how we could benefit your current customer base, right? Like knowing that, okay, there’s probably going to be some that we definitely can’t there’s probably going to be another group that it’s going to be, it’s going to be an okay fit. And then there’s probably others that are going to be a great fit. How do we sort of smooth that out? And I guess have you kind of thought through that, if, you know, are you looking to like continue service for all of the current customers or are you willing to see some, you know, have to find another solution somewhere?
Rebecca Blake (14:37) Else, right? I mean, I’m very early in sort of the investigative process. I have gone through this process before, you know, private equity always wants to look at some businesses. So we’ve gone, not that you’re private equity but you know what I mean? Like we’ve gone through that with some of the other companies. I am not with PCBS. But, you know, I do think if we want to get out of the business and… I’m not, you know, I’m not sure for sure, but, you know, we’re investigating that. I do think, I don’t expect that there’s going to be a one fit, for everyone. So there could be yeah, a scenario where, you know, we’re able, to point some people in this direction and point some people in that direction. So, yeah, that’s not a deal breaker at all for me.
Brandon Chase (15:29) Okay. Yeah. And I just want to be sensitive to the fact that, you know, like these are still your customers, right? Like on the other side of the business and these are people that, you know, right? I mean, so, yeah, it’s not like you could be like, sorry, you know, we’re out, right?
Rebecca Blake (15:46) Right. That’d be the easy, yeah.
Brandon Chase (15:49) I mean, you’ve been doing this for like, you know, I guess like whether you like it or not, these folks are going to continue to be your customers in one fashion or another. So, yeah, you know, I’d imagine that you’d want kind of a soft landing for them, which is definitely, I definitely respect that. Okay. And… then, okay. So just going back to the customer types, there are no payers, right? You said, it’s like, is it pretty much all provider groups? Is that… I know you said many, but I’m just curious to know if like, are there any payers? Are there any like… msos… like any kind of like that? Any, any, anyone that doesn’t fit in either payer or provider category? Like the kind of that one offs, definitely.
Rebecca Blake (16:48) Not. Okay. And I can pull more information for you if you know, that you’ve told me that you’re interested. We did have a lot of payers, but I don’t think we have any current payers right now. So I think we could all provide our groups but I can pull, I can pull… okay, if.
Brandon Chase (17:12) you don’t have it. Yeah, if you don’t have it like the second that’s okay. Yeah, the payers are definitely harder. I mean, I feel like, you know, especially just in the past few years, it’s just kind of a race to the bottom, right? In terms of unit pricing, right? And I, you know, we were talking to another kind of a national payer and, you know, literally hit the words out of his mouth were, listen, I’ll give you guys a shot. If you can tell me you can do it for a nickel a crack.
Rebecca Blake (17:41) I know.
Brandon Chase (17:42) And I’m like a nickel a crack, okay?
Rebecca Blake (17:47) I don’t think they fully understand what credentialing is there. You know what I mean? It’s not like you can go to one database and pull all the information.
Brandon Chase (17:56) Right. And then, you know, obviously, we’ve automated a lot of that process, but it’s not, nobody is fully automated because, you know, you can’t especially if you’re ncqa accredited. It’s like you have to have a human at some point or another touch that file, right? And so, it’s not like you just send it off into this AI system bot. And then it comes back, it’s like, no, there’s stuff that doesn’t come back. And then what do you do? Well? You have to get a person involved and then that person needs to track it down and it’s a lot more complicated than I think people realize. So, yeah, when they say a nickel a crack, it’s almost like, wait, are you serious… we?
Rebecca Blake (18:37) Actually, I have it right here. We still have some malpractice companies that want to mail proof of malpractice insurance.
Rebecca Blake (18:51) Yeah. You’re like, nobody believes that.
Brandon Chase (18:54) Yeah, you’re like, I know this is healthcare, but like where is the kind of like the ridiculous line, right? Like that kind of falls into that? But like it’s understandable. You know, I’ve been in healthcare almost my whole career, you know, about nine years now and like, I… mean, I know I’m on the tech side, but it’s like tech light, you know, because you can only go so far, you know, of what people are willing to do. Yeah. All right. So, I think I have enough information to sort of pass this on internally. I feel like, you know, if there’s if there is any interest, you know, to what extent or whatever we could probably, you know, sign an NDA at that point. And that way, you know, you could feel more comfortable about sharing other information and, you know, we could kind of have more of a free flow of info because I’m sure that, you know, my folks would want to look at stuff a little bit more in depth. But, let me take this internally because honestly, I don’t know what the appetite is right now for any kind of M a… but I know like there are other things that are being talked about right now that are not necessarily M a related but definitely kind of on a different strategic trajectory than, you know, what we’ve been doing over the past few years. So I’ll… let you know, either way. Okay. And then, you know, whatever that decision is, then we could, we can kind of go from there.
Rebecca Blake (20:29) Okay. And again, I just appreciate the conversation. So, yeah, yeah, it happens.
Brandon Chase (20:34) Yeah, yeah, exactly. Yeah. I mean, you know, either way, best of luck with what, you know, trying to find a home for it. Maybe it might be medallion but if it’s not, you know, hopefully you’ll find somebody… and, you know, I’m probably preaching to the choir here, but I’ve been around enough, M a deals to know like if it is a private equity thing, just I’m just saying just beware.
Rebecca Blake (21:03) well, I mean, yeah, yeah.
Brandon Chase (21:06) Just because just because you’re not washing your hands of it and these people are going to be like it’s all going to come back and you’re going to hear it just chirping right? Like this is terrible. All they care about is margins, you know, and I’m sure you’ve already thought about that but, you know, just throwing it out there. Yeah.
Rebecca Blake (21:25) No, I appreciate it. Yeah, we just got a quote on the agency which is very, it’s a very profitable. We saw health and professional liability and it was, you know, an offer for essentially what we make in a year on it. Like why, what you have given me no incentive to even, you know, do a follow up meeting at this point. But yeah, yes, yes, we have a little experience with that and I totally agree well, and, you know, that’s how the physician market is. You know, in Michigan, at least, you know, so many practices have been bought out or sold out to private equity. And now that’s kind of been the trend for probably the last, you know, five years, seven to five years. And now the practices are trying to buy themselves back. So we definitely are seeing that just in the physician environment. Yeah.
Brandon Chase (22:16) I’m like, you know what? I’m like not all PE firms are bad, but most… of them are, and it’s like guys come on, get out of healthcare is such a mission driven industry… and you have no mission. Your mission is to make money, right? And like we tried that in healthcare, right? Like and we’re sort of trying to move away from the whole fee for service thing and, you know, move towards vbc and all that stuff. And it’s like these private equity firms don’t want to hear, they don’t care about that like they want fee for service. So, anyway, yeah, it’s just like go buy your plumbing company, and your hvac company, you know, and go ruin them. Don’t you know, healthcare has enough problems as it is, right?
Rebecca Blake (23:05) People die here.
Brandon Chase (23:07) Yes, yeah, exactly. Exactly. So, you know, all right, Rebecca. Well, it was really good meeting you. I’m glad that Scott got us connected. And like I said, I’ll take this back internally and let you know either way. And then we could kind of we’ll figure it out from there.
Rebecca Blake (23:20) Okay. Sounds great. Thanks so much. Nice to meet you.
Brandon Chase (23:22) Nice to meet you. Take care.