Medcurity raises cash to be the TurboTax for federal healthcare law compliance

Medcurity co-founders Joe Gellatly and Amanda Hepper. (Medcurity Photo)

A startup out of Spokane, Wash. wants to use software to make complying with federal healthcare laws as easy as filing taxes. Medcurity recently took in nearly $700,000 in seed financing to help clinics and hospitals simplify the process of assessing and tracking their compliance with HIPAA, the federal rules that govern how medical information is used.

(Medcurity Photo)

Hospitals and clinics have “a lot of anxiety around meeting regulatory requirements,” said Joe Gellatly, CEO and co-founder of Medcurity. The startup is trying to ease that anxiety with software.

The seed round was led by Spokane-based angel fund Kick-Start III and included investors from the Spokane Angel Alliance and a loan from Ignite Northwest’s Technology Growth Fund. Medcurity also received around $50,000 in pre-seed financing from Mind to Market, a program for entrepreneurs.

The company is benefiting from a wave of tech interest in Spokane, which has attracted a number of promising new startups. “There’s a lot of momentum right now around the startup ecosystem in Spokane,” said Gellatly.

If you’ve used TurboTax, Medcurity’s approach should feel familiar. The product takes users through a series of questions that assesses the administrative, physical and technical risks that the organization might face. Based on those responses, it creates action items that can be assigned to people within the organization and tracked over time.

Medcurity was formed by Gellatly and co-founder Amanda Hepper last summer, and officially launched in December. Pricing for the service starts at $2,999 for hospitals and $999 for clinics.

Gellatly and Hepper said that smaller clinics and hospitals are at a disadvantage compared to large organizations, which are able to employ compliance departments. In smaller settings, the person in charge of compliance often takes on other roles as well. “They don’t have the time to dive in and learn this inside and out,” Gellatly said.

The fines for violating HIPAA laws can range from $100 to $50,000 per medical record, and breaches can also bruise a hospital’s reputation.

Medcurity is currently working with hospitals and clinics in Washington state, Oregon and Maryland. While its clients tend to be small practices, two of the groups have more than 40 physicians.

The startup is also targeting businesses that work with hospitals and may deal with patient data, which means they too must comply with HIPAA regulations.

Looking ahead, Medcurity aims to streamline the process of creating policies and procedures related to HIPAA and including those in the risk assessment. It also wants to help organizations manage agreements with third-party vendors in cases where HIPAA laws apply.

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