Smooth Transmission: A Monroe firm is offering secure applications required by health care providers, insurers and others

Monroe, Mich., May 23, 2004 - When little Johnny’s allergy kicks up, Hilgraeve Inc. may be part of the solution.

The Monroe-based communications software company has evolved into kind of a cyberspace secret agent, securely transmitting gigabytes of health-related information among doctors’ offices, insurance companies and prescription firms.

In its emerging role as a data-transmitting middleman, it also can sort out the cyber-babble of different computer systems so that when Johnny’s ailments are logged onto a physician’s computer, they can be securely sent to and understood by a computer in an insurer’s office.

“We connect uncooperative systems,” says Jeff Beamsley, Hilgraeve’s president. “We look for instances in the marketplace where, for whatever reason, the information isn’t flowing.”

Hilgraeve’s emergence as one of the cutting edge companies in secure electronic data transmission comes, in part, as the result of the Health Insurance Portability and Accountability Act (HIPAA), federal legislation that includes new standards for transmitting personal health information and standards for sending such data electronically.

Started in 1980, Hilgraeve’s initial products were “terminal emulator” programs, such as HyperTerminal and HyperACCESS, which helped computers communicate.

With the development of the Internet and Web browser software, it became clear to the firm that browsers were going to replace the terminal emulators, so the company began to shift gears.

“We realized that this ubiquitous plumbing called the Internet was going to change the way people communicated and, yet, it inherently didn’t have any security,” Mr. Beamsley said.

Ultimately, the firm came up with Dropchute, a PC-based system that enabled computers to send huge files quickly and securely. But DropChute had some architectural problems and wasn’t widely embraced.

Hilgraeve tweaked it, creating HyperSend, a Web-based product that quietly and easily interfaces with other applications.

It was just what the doctor ordered.

“We’ve refocused our attention,” Mr. Beamsley notes. “Though HyperSend remains a tool in our tool box to create solutions, our mission these days is somewhat broader – to connect uncooperative systems and to do that securely. In the health care space there’s a lot of that occurring.It’s a very fractured market from an information point of view.”

Indeed, Hilgraeve’s newest application has the potential to serve various health care interests, particularly those that rely upon gathering patient data.

“The insurance companies need accurate information on you but, in fact, the most current information on you resides in the physician’s office,” Mr. Beamsley said. “The Physician doesn’t maintain that information for any altruistic purpose. He or she maintains it to get paid.”

“All that information, it turns out, is of critical importance in providing the next generation of services, which will streamline and improve the quality of service that the health care system can provide to you,” he said.

For example, Hilgraeve is carving a niche in the growing use of e-prescriptions. Instead of a physician handwriting a prescription, e-prescriptions allow a doctor to create one electronically and transmit it to a pharmacy electronically, using a handheld system such as a personal data assistant. The system can eliminate a lot of mistakes.

Insurance companies are embracing the system because it also can provide a method for them to communicate their formularies – lists of preferred drugs for which they will pay claims – to health care providers.

For instance, if a doctor is treating a patient insured through Blue Cross, it’s conceivable that when the doctor calls up a patient’s file to write an e-prescription, it will present the list of preferred drugs the patient’s insurer will pay for, given the patient’s ailment.

It can also list other medicines the patient is taking, creating a fairly good screen for potential drug interactions. The effectiveness of the system depends greatly on the ability of the e-prescription company to get the physician’s practice management system, and keep it updated and available to the handheld system, Mr. Beamsley explains.

HIPAA enables all this information to be shared, with patient consent, as long as it remains secure.

“In case of physician’s office, every time a physician sees a patient, our system extracts the current patient information and sends it off to our customers,” he said.

HIPAA also mandates that health care providers move to an electronic form of claims submissions. “The problem is, they didn’t specify what the transport method needed to be,” Mr. Beamsley said. “Big providers might be submitting claims to 300 or 400 insurance companies, but each payer has its own way of accepting these claims. We’ve developed a whole business providing one interface that a single big provider can use to file its claims with all those companies.”

The company has been working in partnership with firms such as Caremark’s Advance PCS, a pharmacy benefits manager, or Quest, a $4 billion lab.

“There are a number of these very large companies that need these sorts of solutions,” Mr. Beamsley said. “We provide the solution to them and deploy it at their rate. They sell their application and for every sale of their application, we get a sale.”

The original form of HyperSend still exists, but HyperSend PDX – which stands for patient data extraction – now is fueling the firm’s revenues, and its future.

“It turned out that we had a great horse. We were just whacking the wrong end of it,” Mr. Beamsley said. “As soon as we stopped whacking the head and started whacking the rump, it took off.”