Keith Moody started writing the code for his startup while still in high school, and landed the first customer while earning his degree at Ohio State University.
RevQuest Inc. has grown to 30 employees and is on track this year to recover more than $450 million for hospitals and health systems by correcting billing errors, said Moody, the CEO. The New Albany startup has taken on no outside capital, growing entirely on revenue from its finder's fees on paid claims.
Moody started developing the software in 2014, based largely on conversations with his father, Robin Moody, an IT services consultant to health systems, who described the billing problem. They also enlisted as an adviser Joel Goldman, who since the 1970s wrote software that makes electronic healthcare billing possible.
Moody incorporated RevQuest in 2017 (also the year he graduated New Albany High School), and signed a two-hospital system in Northwest Indiana the next year as a pilot project. The business launched more broadly in 2019, only to be interrupted by the pandemic.
"All of our progress came to a screeching halt," Moody said.
It has now signed half a dozen systems and is pursuing more to try the software with no up-front fees. They pay a percentage of what is recovered, lower than the industry average. Competitors include larger healthcare billing software makers.
In one week last year, the software recovered $75 million for one client in upstate New York – more than its usual annual net income.
Hospitals can use that money to hire more staff and improve quality of care, COO Sam Khozin said.
"Our main goal is to help hospitals help patients," Khozin said. "There’s so many inefficiencies and things that don’t make sense in healthcare."
Once signed up, clients send over data files of their invoices and receipts with private and government insurers – files with hundreds of thousands of line items. Errors are common because every insurer has different codes for diagnoses and procedures and different rules for processing them; the same insurer's rules can even differ state by state.
Through automation and machine learning, Moody said, the software acts as “a medical billing professional with unlimited time and resources and experience.” It quickly identifies discrepancies and errors – for example, if the hospital used an insurer's new diagnostic codes, but the insurer rejected the claim because the update wasn't encoded in its own back-end technology.
"Every single hospital has this problem," Khozin said. "This is a way to potentially help every hospital improve. No hospital says, ‘We have too much money.'"
Khozin is a physician, but since completing residency he’s worked mainly as an engineer and independent consultant for health tech startups. He spent nearly three years as COO and chief medical officer of Health Data Intelligence LLC, which used population data to improve medical decisions. It was acquired in 2016 two years after it launched. He joined RevQuest in July 2020.
Another early RevQuest hire was Nishant Chittari, chief data analyst, and Moody's friend since high school.
Moody graduated OSU last year with a bachelor's degree in IT with a minor in business analytics. Remote classes in the pandemic helped him as an entrepreneur.
"I could take care of the business when the sun was up, and once the sun went down I’d watch all my lectures and do all the coursework," he said. "To be honest I really didn’t sleep."
He turned down more secure job offers to keep going with the startup.
In an age when many tech companies run completely in the cloud, for speed and security RevQuest runs solely on IBM mainframes it owns, housed in a large Columbus data center. They're touchy, and require frequent maintenance.
"They’re such amazing and complex machines; they always keep you on your toes," Moody said. "They’re kind of like my kids in a weird way."
