Eight HMOs have banded together to form MedUnite, a "real-time" transaction system designed to smooth the billing, claim submission, and eligibility process for health care providers.

Based in San Diego, MedUnite will provide software that will enable physicians, hospitals, insurance companies, pharmacies, and laboratories to connect with one another to handle administrative business, including referrals, claim handling, and reimbursements.

MedUnite was created with financial backing from Aetna, Anthem Blue Cross and Blue Shield, CIGNA, Health Net Inc., Oxford Health Plans, PacifiCare Health Systems, and Wellpoint Health Networks. While those HMOs will be the initial health plans that are on the software, MedUnited plans to contract with other HMOs.

The new venture will create competition for Healtheon/WebMD, which offers doctors the ability to order supplies and prescriptions, check lab results, verify insurance coverage, and receive information on continuing education and certification services. Officials from WebMD could not be reached for comment.

Dave Cox, president and CEO of MedUnite, says that transactions between HMOs and health care providers total $250 billion, thus creating a need for an information technology solution. "No one — insurers, physicians, or patients — benefits from spending that kind of money on paperwork," he says.

Cox promises that MedUnite will provide physicians with a "standard, easy-to-use method" for transactions with the majority of insurance plans they work with. This will result in faster reimbursement for claims and instant approvals on eligibility and authorization for patient service. "Handling healthcare business transactions will be as easy as using an automated teller machine [ATM]," he says.

Cox says his company is working with Computer Sciences Corporation, Deloitte Consulting, Sun Microsystems, and XCare.net to implement the technology needed to make the system work.

Eve Dryer, a spokesperson for MedUnite, says the system will be marketed to medium to large group practices. She says that between 400 and 500 doctors will be using the system on a "pilot" basis by February 2001, and that physicians countrywide will be able to use the service by June or July 2001.