As expected, M*Modal has filed for bankruptcy protection. Here’s the release from the company announcing the news:
M*Modal, a leading provider of cloud-based clinical documentation and Speech Understanding solutions, today announced it has filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. M*Modal expects to use the Chapter 11 process to align the Company’s debt structure with its vision, strategy and operations to better position the Company for long-term success. The Company has been – and remains – in constructive discussions with its lenders and bondholders regarding the terms of a consensual financial restructuring plan and is focused on achieving a resolution as expeditiously as possible. M*Modal’s worldwide operations are expected to continue in the normal course throughout the restructuring process.
Duncan James, M*Modal’s Chief Executive Officer, said, “When M*Modal was taken private in 2012, the acquisition was financed with a capital structure aligned with a specific set of assumptions that are no longer relevant. As a result, there is a need to restructure the company’s balance sheet to better align with changing market dynamics and refinements to our strategy. We intend to use the Court process to significantly strengthen M*Modal’s balance sheet and improve the company’s financial flexibility by reducing our debt burden and establishing a capital structure that supports our investment in the future.”
James continued, “Throughout this process we are not changing our operational execution or strategy, and our operations will continue as normal. Importantly, we will continue what we are known for: providing innovative technologies and offering healthcare providers a superior choice when selecting their clinical documentation and speech understanding technology partner. M*Modal has solid revenue, strong operating margins, cash flows consistent with industry norms, a large and growing customer base, and we are continuing to invest in the future. We intend to emerge with a strong financial footing so we can continue growing our market share and delivering innovative solutions to our customers.”
The company expects that its cash on hand, combined with funds generated from ongoing operations, will provide sufficient liquidity to continue operating in the ordinary course throughout this process.
Dechert LLP is serving as legal counsel, Lazard Frères & Co. L.L.C. is serving as investment banker, and Alvarez & Marsal is serving as financial advisor to M*Modal.
About M*Modal M*Modal is a leading healthcare technology provider of advanced clinical documentation solutions, enabling hospitals and physicians to enrich the content of patient electronic health records (EHR) or electronic medical records (EMR) for improved healthcare and comprehensive billing integrity. As one of the largest clinical transcription service provider in the U.S., with a global network of medical editors, M*Modal also provides advanced cloud-based Speech Understanding™ technology and data analytics that enable physicians and clinicians to include the context of their patient narratives into electronic health records in a single step, further enhancing their productivity and the cost-saving efficiency and quality of patient care at the point of care. For more information, please visit www.mmodal.com, Twitter, Facebook and YouTube.
Guest post by Jonathan A. Handler, MD, FACEP and chief medical information officer for M*Modal.
The U.S. Government officially recognizes that filling out paperwork is expensive. The most costly paperwork requires us to measure and report information – like our yearly income. If you have ever filled out a government form, you may have noticed that it provides an estimated cost to complete.
For example, the simplest “EZ” income tax form will cost each taxpayer an average of four hours and $40 (http://goo.gl/C6ra — page 41). This is a result of the Paperwork Reduction Act, which requires the government to reduce the paperwork burden on the public and publish the estimated cost of completing each form. However, the Paperwork Reduction Act may have a loophole, because it seems to be limited to government documents.
The government creates a tremendous documentation burden on healthcare providers that appears to fall outside the scope of the Act. In 2014, new government requirements will increase that workload dramatically even as reimbursement drops. Since we do not have consensus on how to address these changes without sacrificing patient care, I believe a key trend in 2014 will be “Managing the Cost of Measuring Care.”
Clinicians are already at the breaking point in the time they spend on documentation and care measurement. This year, regulations demand more than ever. The move to ICD-10 significantly increases the cost of choosing the right billing code because ICD-10 is more complex and about eight times bigger than ICD-9. Stage 2 of the government’s meaningful use program requires clinicians to record more patient information in structured form, to report clinical quality measures, to perform medication reconciliation, and much more. The Two-Midnight rule requires physicians to anticipate when an admitted patient will need to stay in the hospital longer than “two midnights” and justify that in writing.
Dr. Juergen Fritsch, co-founder and chief scientist of M*Modal Inc., discusses the company, how it is used in the care setting, the market trends and where it is going.
What is M*Modal?
M*Modal is a leading healthcare technology provider of advanced clinical documentation solutions, enabling hospitals and physicians to enrich the content of patient electronic health records (EHR) for improved healthcare and comprehensive billing integrity.
As the largest clinical transcription service provider in the U.S., with a global network of medical editors, M*Modal also provides advanced cloud-based speech understanding technology and data analytics that enable physicians and clinicians to capture and include the context of their patient narratives in a single step into electronic health records, further enhancing their productivity and the cost-saving efficiency and quality of patient care at the point of care.
Why is it disruptive and important to the community?
M*Modal’s technologies are disruptive because they empower physicians with the ability to make informed decisions at the point of care, one of the most critical factors in reducing healthcare costs and improving patient outcomes.
M*Modal’s solutions are important because they are designed for healthcare by healthcare experts. As such, the solutions understand multiple dialects, accents and cadences, pull from a repository of more than 200,000 physician voices in the cloud and are only medically focused.
What is its potential?
M*Modal has the potential to transform the way the entire healthcare industry leverages advanced clinical documentation technologies and services, ensuring that all stakeholders across the healthcare spectrum, from the patient to the coders on the back end, benefit from the advanced clinical documentation workflows available in today’s and tomorrow’s healthcare settings.
Who’s using it? Why? What is the ROI?
M*Modal provides hospitals and physicians with the healthcare industry’s most advanced clinical documentation solutions. These stakeholders use our solutions to enhance how healthcare professionals capture and manage clinical documentation for improved quality, cost savings, reimbursements, compliance and patient care. Examples include enriching electronic health records for patient care quality and comprehensive billing integrity.
In terms of ROI, our technologies can identify documentation deficiencies and address them via closed-loop workflows, which improve the quality of the clinical patient note and increase the efficiency of documentation processes. Our advanced clinical documentation tools drive adoption of electronic health record systems, saving providers time & expenses.
How did it start? What is it doing to advance?
M*Modal grew out of research performed at Carnegie Mellon University in the late ’90s. The company’s founders developed a radically new technology for understanding conversational human interactions on the telephone. The technology proved to be an even better match for dictated clinical notes as created by healthcare professionals throughout the United States and elsewhere. Today, M*Modal processes millions of hours of verbal healthcare documentation for more than 200,000 physicians each year.
To advance our impact we are also focused on forging partnerships. We just announced several new partnerships with major industry players such as 3M, Optum and Intermountain Healthcare and we have established partnerships with top providers of electronic health record systems, including Epic, Allscripts and Merge. We are constantly working with partners to develop and address industry challenges as they arise.
How is it used in the care setting?
Our advanced speech and natural language understanding technology is used in a wide variety of clinical and administrative healthcare workflows, for example enabling physicians to interact with their clinical systems via voice anytime, anywhere, using their preferred device. This enables instant access to critical information for patient care, allowing providers to spend more time with the stakeholder that matters most – patients.
Additionally, hospitals and practices are using our solutions to analyze vast amounts of unstructured clinical documentation, identify documentation deficiencies and close care gaps. Traditional electronic health record systems do not provide this level of insight and so our solutions fill a critical need that becomes more and more important as we progress from a fee-for-service to a value-based reimbursement and accountable care model.
Tell me something about transcription tools that nobody seems to know.
Our advanced speech and natural language understanding technology has made the process of turning dictated physician notes into structured clinical documents roughly twice as fast as a traditional transcription workflow. On top of that, transcription services are slowly but steadily evolving to also include data validation services. That trend will continue as hospitals seek to lower their cost and free-up physicians to spend more of their time caring for patients rather than dealing with technology.
Should patients care about speech recognition?
Many patients are already familiar with speech recognition technology through their use of off-the-shelf consumer products that some of them are using at home. In my view, it is less the speech recognition technology that they should care about, but the significant advances that we have made in the past few years around computers understanding natural human language. That technology together with the vast and ever growing amounts of “big data” that are being created in healthcare is allowing physicians and other care providers unprecedented insights into healthcare outcomes and ultimately will be a key driver of improved healthcare.
What do you see as the most important health IT trends currently affecting the market? Why?
The most important health IT trends that’s affecting the market today is the move toward a more outcome- and prevention-based reimbursement models. Rather than paying for services provided, the market will shift rapidly toward paying fixed budgets to manage different types of diseases, particularly the costly chronic ones such as heart disease, diabetes, etc. Healthcare information technology is adjusting to this and is developing new solutions that are focused on personalized medicine to prevent diseases rather than just supporting the treatment of them once they occur.
Where are we going as a market?
As I noted earlier with the new outcomes-based focus, I would say that we are rapidly moving toward a more sustainable healthcare cost model, with a much improved focus on disease prevention and personalized treatment plans.
What is the number one complaint you hear regularly from caregivers?
By far the number one complaint is that outdated, inefficient technology is bogging them down, requiring them to spend more time in front of the computer, leaving less time to take care of their patients. In part, this stems from the fact that many hospitals have bought into decades-old electronic health records systems with inefficient workflows that slow down physicians, particularly in today’s world of increasing data capture requirements. But there is also a generation of newer information technology on the market now — such as speech and natural language understanding technology — that actually help improve physician productivity while also providing better insights into their patient population. The bottom line is: physicians and hospitals need to closely follow the healthcare IT market to identify the tools that can drive their efficiencies and improve their outcomes.
What are caregivers most excited about?
Many care givers are excited about mobile devices — mostly about tablets like the iPad Mini. It allows them to do many of their tasks more efficiently while on the go, even sharing a lot of information effectively with their patients. Virtual assistant technology is also of great interest to many physicians, particularly in combination with mobile devices. You will see many new mobile apps hitting the market in the next few years that will allow care givers to verbally ask complex questions about their patients’ health record and get answers within seconds.
What piece of regulation would you like to see abandoned? Adopted?
I’d like to focus on pieces of regulation that I would like to see adopted more readily or more expediently. The key ones for me are interoperability standards and the respective regulation found in the ARRA HITECH Meaningful Use program. Almost every other industry has embraced interoperability. You can get cash at virtually any ATM in the world — but you can’t transfer your electronic patient health record from one EHR provider to the next (at least, not without major effort). We need to change that, and we need to do it quickly. Regulation can help with that.
Dr. Juergen Fritsch is co-founder and chief scientist of M*Modal Inc. where he leads research efforts in the fields of speech and natural language understanding for clinical documentation. His work focuses on building and improving a medical language understanding system that is based on standardized medical ontologies and vocabularies while employing statistical algorithms to learn from vast amounts of linguistic data. He has published more than 20 peer-reviewed papers and has been granted five patents on original speech recognition and natural language processing research. Juergen received his Ph.D. (1999) and M.Sc. (1996) degrees in computer science from the University of Karlsruhe, Germany.