give them data they might use to dispute claims,” he says. What’s worse, trying to analyze a prescription claim can be akin to pouring over a Chinese novella: Re-pricing a single claim requires interpreting up to 300 fields of data. “We had people with the expertise to review claims, but they didn’t have the time to do it,” Birch says. “Reviews we wanted to do up front didn’t get done until 18 months later.”
Birch liked Truveris’ solution so much he left Touchstone to run the startup.
Truveris’ software engineers tailor the company’s basic platform to the needs of each individual customer. They start by reviewing the contract the payer has with its PBM. They then set up a system that each claim can be run through in real time. The set-up process takes about two weeks, Loiacono says. The fee structure varies by client, he adds. Many customers pay a monthly service fee, though some also pay Truveris a percentage of any overcharges that the payer recovers.
Loiacono says the most common error occurs when a pharmacy charges more for a drug than what the PBM’s contract with the payer requires. Say a pharmacy is supposed to charge $2.20 a pill for a particular drug, for example, and instead it accidentally charges $2.26. With no mechanism for screening invoices, most payers wouldn’t notice such a small error. They’d simply pay the overage. But tiny mistakes add up: Truveris estimates that its clients are saving at least 2 percent on their total drug spend.
The only resistance to Truveris’ solution has come from PBMs, Birch and Loiacono say. Some say they don’t have the right systems in place to supply the required data, while others have contracts with their payers that are “artfully written to be intentionally nebulous,” Loiacono says. That can make it challenging for Truveris’ platform to perform up to its full potential.
But Birch believes all PBMs will eventually get on board. “This is just noise around a disruptive technology,” he says.
Scott Johnson, founder and managing partner of New Atlantic Ventures, believes Truveris’ biggest short-term challenge is that it’s creating a brand-new market. “Whenever you do that, there’s a lot more learning going on than there is buying,” he says. Johnson says that Birch’s experience and connections in health care should help the startup overcome potential customer doubts. “When you bring in someone like that it accelerates the company’s growth and credibility,” he says. “It saves you a year or two of bumping up against brick walls.”
Johnson says he was introduced to Truveris by Tribeca Venture Partners, and was able to persuade his partners at New Atlantic to join the investing syndicate within a week. “That’s unprecedented for us,” Johnson says. The firm was largely interested because of what Johnson calls “an enormous market,” which Truveris estimates at about $3 billion a year just in pharmacy benefit reviews.
Truveris is working to raise a funding round—in the range of $5 million to $10 million—within the next six months, Birch says, and plans to use the money to expand its product line. He declines to provide any details, except to say, “We’re creating other products in different pharmacy segments that use real-time claims technology.” Loiacono believes the opportunities for diversification are vast. “There are inefficiencies in every segment,” he says.
