Monday, April 21, 2008

MedAptus posts a 70% sales rise, $13M VC round

By Christopher Calnan

Just a week after reporting a 70 percent top-line gain for last year, health care billing software maker MedAptus Inc. completed a nearly $13 million round of financing.

The Boston-based company plans to use the new funds to increase sales and marketing of its latest software product so it can post similar or better growth for 2008, officials said.

MedAptus, which develops electronic billing software for health care providers, completed the financing in early March, according to federal securities documents. The additional capital, which was MedAptus' third round of funding, will pay for 10 to 20 additional sales and service support workers for the sixth version of the company's product, said MedAptus chairman Dana Callow, founder of investor Boston Millennia Partners, a Boston-based private equity firm.

Callow would not say how much venture capital MedAptus had raised to date.

MedAptus, founded in 1999, reported in late March that 2007 was the "most productive" year in its history in terms of customer wins -- Kentucky Medical Services Foundation and the Nassau Health Care Corp. are among its recent newest users -- and the introduction of new products. It reported a 20 percent rise in employee head count. Dana-Farber Cancer Institute is also a customer.

MedAptus makes a point-of-care charge-capture system that records physician procedures with insurance company codes to properly bill work. But such systems are difficult to integrate with medical record systems and the return on investment is not always apparent, said David Smith, president of Georgia-based Kearny Street Consulting Inc. "There's a lot of people interested, but few buyers," he said.

Companies with similar products include Boston-based PatientKeeper Inc., which also reported a strong 2007; London-based Misys Plc., as well as McKesson Inc. and the TriZetto Group Inc., both based in California.

In December 2007, MedAptus appointed as CEO Douglas Percy, who was previously the CEO of Blue Agave Software Inc., a Cambridge company acquired last year by Dallas-based i2 Technologies Inc.