Prominent Twin Cities entrepreneur Mark Tierney has launched his third successful health care IT start-up: mPay Gateway, a software-based prescription to relieve doctors' bad-debt pains.

Tierney previously co-founded eBenX, a technology-based benefits plan administrator for self-funded Fortune 500 companies such as Chevron and PepsiCo. When eBenX went public in 1999, it was the largest IPO in Minnesota history.

Before that was Healthmarc, a utilization management company with GE, Chevron and PepsiCo among its clients. Tierney sold that company to UnitedHealth Group in 1991.

With mPay Gateway, Tierney, a former hospital administrator with 30 years of experience in the health benefits industry, has built on his specialty of finding new ways to apply technology to health care delivery and finance.

The mPay Gateway system makes paying for a doctor visit almost like checking into a hotel -- the estimated cost gets authorized on your credit card when you check in, but you don't get charged until the insurance company specifies what you owe.

"There's a movement toward patients paying more out-of-pocket expenses," Tierney said of the rising deductibles and copayments most consumers must pay under their health insurance plans. "We anticipate that's going to continue to be an issue for the next couple decades. And that creates a problem for physicians who need to collect from patients."

No small problem, it turns out: Providers write off $40 billion to $60 billion a year in bad debt, according to a McKinsey Quarterly study in 2007.

In Tierney's view, mPay Gateway has almost unlimited growth potential, with the billions providers are losing each year and the expense and low return rate (50 percent) of post-visit collection efforts.

"I believe that every physician in the country is going to want a solution for getting paid by patients who have a deductible obligation," Tierney said. "The way to assure that is to get some commitment when they are in the office.''

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