A Milwaukee-based health payments company recently secured $25 million from investors to finance its plan for major nationwide growth.
Wisconsin health insurer Health Payment Systems Inc. (HPS) and PayMedix intend to use the new capital to scale the PayMedix technology platform, which is designed to help patients and health providers pay and collect medical bills. It also plans to grow PayMedix’s 50-person team that’s largely based in Milwaukee, and intends to keep its headquarters in Cream City even as it pursues a national market, the company’s CEO said.
“We’re now going from Wisconsin to America,” HPS and PayMedix CEO Tom Policelli said. “If we do our jobs right, we’re going to be hiring a lot of people for a long time.”
PayMedix is poised for growth at a time when health systems locally and nationally are struggling financially in the wake of the pandemic as their expenses — including rising wages and third-party labor costs — outpace revenue. With PayMedix, providers can offload the work of their billing departments and collect more money from patients without badgering patients for payments, Policelli said.
HPS first launched what is now PayMedix as a health care financing platform that was only available for patients and providers covered under its Wisconsin-based health insurance network. After bringing on a new investor in early 2021 — at which point Policelli joined the company as CEO — HPS branded the platform as PayMedix and began offering it as a service that works with any insurance network in any state, Policelli said.
“Now that we can put PayMedix on top of any network anywhere … we can go after much larger employers,” Policelli said. “We can follow employers wherever they have employees.”
In the last 18 months, the company’s revenue has grown by around 40%, Policelli said. PayMedix gets “a large majority” of its revenue from providers, as well as some revenue from participating employers, he said.
Around a third of HPS and PayMedix employees were hired in the last nine months, Policelli said. Around 75% of its employees are in Wisconsin but the company also hires remote workers, he added.
PayMedix’s latest financing round included a mix of debt and equity investments. Previous HPS investors also invested in the company’s latest financing round. They included Boston-based SV Health Investors; Hexagon Inc., which has offices in Milwaukee and Denver; and Caltius Equity in Los Angeles.