SciNet: Medical Computers

Empire Medicare

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Prepared for the September 20, 2000 edition of U.S. 1 Newspaper.

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Hot Times in Healthcare Software

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Princeton seems to be a hotbed for software


aiming to revolutionize the healthcare industry. One of the latest

hot ideas is being put forward by, which triples

its space this week in a move from Princeton Windsor Office Park to

20,000 square feet at Windsor Corporate Park, formerly the Lockheed

Martin plant, where it is the first tenant.

The company ( also just announced $42 million

in funding and a major partnership with a private label


firm. It will use the funds to kick-start its new systems — to

efficiently and cost-effectively process medical claims and payment

information on the Internet. Its point-of-service settlement


aims to connect the insurance company, the credit card company, and

the healthcare providers at the point of service.

Columbus Bank & Trust Company, a member of the Synovus Financial Corp

family of companies, will support’s financial


system with merchant and private label card processing. Under the

patent-pending system, all participants — patient, care provider,

insurer, and financial institutions — come together at the point

of service to allocate the financial responsibilities of each party

and collect the proper amount. Instead of a 30 to 120-day lag in claim

payments, claims will normally settle within 48 hours.

James H. Blanchard, chairman and CEO of Synovus (NYSE: SNV) says that

one of his companies (Vital Processing Services) will provide the

point-of-sale and clearing and settlement processing services, and

another company (Total System Services) will take care of the


payor business-to-business debits for clients.

Joseph Sebastianelli, chairman, CEO, and president of,

says that his firm "could not have asked for a better banking

partner." Sebastianelli was co-president of U.S. Healthcare and

was instrumental in that company’s merger with Aetna Inc., where he

then held the office of president. He came to Princeton after serving

as CEO of Scripps Care, San Diego’s largest healthcare system, and

he has also been vice president of Blue Cross of Greater Philadelphia

and a litigation associate with Morgan, Lewis & Bockius.

Synovus ( is a $13.7 billion multi-financial services

provider based in Columbus, Georgia. Columbus Bank and Trust has $3.4

billion in assets and is Georgia’s largest bank outside of Atlanta.

Synovus has an 81 percent stake in Total System Services


which facilitates payment exchange with a wide range of business


Vital Processing Services ( is a joint venture of

Visa USA and Total System Services.

Simultaneously, Sebastianelli announced the four participants in a

follow-on round of $42 million in funding: a health insurance firm

(Empire Blue Cross and Blue Shield,, an

Internet firm (Internet Healthcare Group,, the


capital arm of a pharmaceutical firm (Johnson & Johnson Development

Corporation,, and a venture capital firm (Prism Venture

Partners, Empire is a 60-year-old firm that

has 4.1 million insurance subscribers.

Current board members of’s board are Jesse Brown,

former secretary of the Veteran’s Affairs Committee, Brad Vale of

Johnson & Johnson Development Corporation, Phil Kiviat, president

of the Kiviat Group, Dean Boyer, co-founder of,

and Sebastianelli. Scheduled to join the board are Ira Millstein of

Weil Gotshal & Manges (representing Empire Blue Cross Blue Shield),

Steve Shulman and Rene Lerer of Internet Healthcare Group, and Laurie

Thomsen of Prism Venture Partners.

Two other companies that can reduce doctors’ office paperwork

are flourishing in the Princeton area. One, now known as SciNet, was

founded by Joe and Gloria Coyne and bought by a mega firm. Another

is a division of the mega firm, Empire Blue Cross/Blue Shield. Both

help train the staff in physician’s offices to work electronically,

rather than on paper.

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SciNet: Medical Computers

If you work in a medical office as a secretary,


or the member of the billing staff, there is a good chance your


systems came from SciNet Inc. SciNet is doing its part to reduce the

administrative costs of healthcare. It re-sells medical computer


for offices with from 10 to 150 workstations, and it expanded in May

from 2,300 feet at Lawrence Commons to 2,600 feet in Suite 103, 731

Alexander Road so it could have space for a training classroom


"The advantage of our software is that it provides solution for

all needs regardless of size," says Chris Meola, East Coast


manager of SciNet. "Claims can be sent to all payers and


seamlessly, which helps reimbursement time and rate. The way we have

it set, it requires very little end-user interaction, but we have

enough auditing checks in place that — 99 percent of the time

— claims get paid on the first run."

"We are on the edge of technology. Our package runs on the Unix

operating system, and each office has its own server," Meola says.

The cost for one doctor and one user could be as little as $12,000,

and a complete system for large groups could be $70,000 to $80,000.

"If you buy a new system from us, you are looking at 8 to 11


days to get the system fully functional," says Meola. Most


send one person to three days of management training. "We set

up their system and come to an agreement as to how they want it to

work in their office, and set protocols for training. We can build

the database and transfer it to their phone lines and to their


server. If they are on an existing system we can program the


"It is a lot of upfront work, and if they want it to be right,

nothing can be done to make it right but to put the time in,"

he says. "We have written all our own manuals. New clients get

a whole set, and new employees that attend our class get a personal

manual. As long as you have a valid support contract with us, our

support lines (based in Sparta) are open 7 a.m. to 6 p.m. in any time

period, and for application support we are on call 24 hours a


Joe and Gloria Coyne founded this company as Enterprise Information

Systems and Services and were bought out by SciNet, an Arizona


in 1998. Now the Coynes have moved to Scottsdale, where he is vice

president of technical services — programming, hardware,



SciNet, in turn, was bought by Medical Manager, a Florida-based


developer that also purchased Physicians Computer Network (PCN).


Manager (Nasdaq: MMGR) also owns Care Insight, a provider of


claims, and Porex, a plastics firm.

In addition to its Alexander Road classroom, SciNet also has


in Saddle Brook and Wilmington, Delaware. SciNet is the largest


of products of PCN Health Network — hardware, software, support,

and training. Current Princeton area clients include Princeton


Services and Princeton Internal Medicine. Competitive products for

medical offices are Medical Manager, IDX, and Execuflow.

Meola grew up in Morristown, where his stepfather was a police


and he has a brother and two sisters. He majored in business


at York College of Pennsylvania, Class of 1991, and worked for


Memorial Hospital and the home health care division of Hoffman


starting as a trainer, then doing applications support, and managing

application and end hardware support. At SciNet he started as training

and education director and after nearly six years is East Coast



"When I got out of college, many companies were rewarding people

based on the time they had spent there. I started working for the

Coynes when I was 25 years old," says Meola, "and they


people based on talents, hard work, and what they were able to bring

to the plate. I am in a position that I would probably not have been

able to obtain in a lot of other companies because of bureaucracy.

I have had the opportunity to grow and expand and showcase some of

my talents."

SciNet Inc., 731 Alexander Road, Suite 103,


08540. 609-520-8320; fax, 609-520-8991. Home page:

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Empire Medicare

SciNet isn’t the only area mecca for medical office

training. Empire Medicare Services has opened a new training and


center on Brunswick Pike, replacing one that had been on Franklin

Corner Road. With 10 employees, it doubled its space to 6,000 square

feet and now has a training classroom.

This division of Empire Blue Cross/Blue Shield took over the contract

from a Harrisburg, Pennsylvania-based firm, Xact, which had been the

statewide call center for questions on Medicare plan part B for 12

years. It serves 1.2 million Medicare recipients in New Jersey, is

the only such center in the state, and is the largest Medicare


in the country. For consumers, it has a website and a tollfree number.

For doctors’ office staff, it has classes (

"The kind of training we offer to physicians and their staff is

understanding policies, regulations, and billing of their


says Gail Rounds, program manager. Her office can provide an almost

free software package that one-physician offices can use, or it can

help staff members use commercial products, such as Medical Manager.

Rounds offers specialty seminars for internists and specialists such

as surgeons and podiatrists on an ongoing basis. All seminars and

publications are free to physicians and staff members. Consumers can

come here to browse in the resource center and learn more about their


Rounds earned a nursing degree at Mercer County College and has health

education and psychology bachelors’ degrees from College of New


She began working in the insurance industry in 1982.

"Other companies are selling seminars like ours, but we offer

a fantastic resource — our seminars and services are free,"

she says. Her center can train doctors and staff members to complete

the enrollment paperwork to acquire a billing number, to code


and to provide the technical information needed for submitting bills.

For instance, routine foot care by a podiatrist is not a covered —

except for patients with systemic diseases, such as diabetes. "We

provide, in writing, what the requirements are for the coverage, so

they can clearly understand the parameters and what would be the


responsibility. It’s pretty easy to read," says Rounds, "but

there’s nothing like having a person take you through it."

The most common mistake is for a physician to open a practice without

the proper training. "They don’t look first, they just jump into

business. Months later they are not sure why they are not getting

paid, why their claims are not going through, and they don’t


their statements."

All this computerization of health care billing may take longer

than everyone thinks, by the time it dribbles down to the one-doctor

or two-doctor office. Says Rosalie Fox, executive director of


Management Services on Route 1 North by the Carnegie Center,


offices are behind in the technology. Many, many doctor’s offices

are not up to computerization. But that is changing."

— Barbara Fox

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