Sunday, November 02, 2003
Copyright © Las Vegas Review-Journal

NEVADAN AT WORK: DENNIS SPONER, ScripNet president

Paper not in script for ScripNet boss

ScripNet, led by President Dennis Sponer, ranked 331st on this year's Inc. 500, a list of the nation's fastest-growing companies. ScripNet's estimated revenue for this year is $18 million. Photo by Ralph Fountain.

Dennis Sponer hates paper.

The traditional method of trafficking in paper prescriptions to supply drugs in worker's compensation claims is labor-intensive and hazardous, Sponer said. It took time to interpret stacks and stacks of claim papers and shelf after shelf of space to store it. Paper also left room for mischief, he said; the unscrupulous could fashion phony claims or illegally copy legal ones, changing the date to get unauthorized medicines.

Eliminate the paper, he figured, eliminate the problem. To do so, he started ScripNet, a company managing pharmacy benefit claims electronically.

Sponer started ScripNet, a workers' compensation-focused pharmacy benefit management company, in 1997 with an assist from his family. His mother, M. Frances Sponer, was operating Horizon CompCare and Professional Health Services, a privately owned and operated integrated system of health care companies. Horizon CompCare was ending its contract with its pharmacy benefit provider, the liaison between insurers and the pharmacies filling prescriptions for worker's compensation claims. Sponer, who was working as staff attorney for the company at the time, figured he could do better than the last benefits manager and started his company to do so.

Sponer liked the possibilities. He said the company could grow without requiring space. Because most of the business happens over the phone or electronically, aided by e-mail, he could operate it from anywhere. He could add as many clients as he wanted, wherever he wanted, without having to add offices or dispatch agents.

It's been a wild ride. Last year, the company ranked 34th on the Inc. 500, Inc. magazine's annual list of the country's fastest-growing companies. In five years time, the company expanded from two employees to 25. Sales grew 3,536 percent, reaching $10.6 million. On this year's list, released Oct. 17, ScripNet ranked No. 331. Estimated revenue for this year is $18 million.

ScripNet's network includes more than 30,000 pharmacies in all 50 states. Sponer said his point-of-sale system lets pharmacists verify prescriptions and process orders and billing at once. Because the bills are sent directly to pharmacies, and not carried there by injured workers or others, there's less chance for forgery, illegal duplication or other fraud, Sponer said. Eliminating paper, he added, eliminates administration. There are no file folders to keep; no documents to file.

Local ScripNet customers say they like that Sponer works and thinks locally. Leslie Bell, president of Nevada Comp first, for example, said ScripNet's relationship with pharmacies makes filling and processing claims easier. ScripNet, she said, will pay pharmacies for five days of medication on workers' compensation claims, covering the lag time between when claims are filed and processed. Even if a claim later gets denied, ScripNet, and not the pharmacy or the insurer are out any money.

Bell said Sponer worked with her to create a program to suit her company.

"A national company could do some of the same things as ScripNet does, but wouldn't be willing to create a custom program for small groups," she said. "Dennis can offer me a locally owned company to work with and the ability to customize a program."

Although he was born in Pennsylvania, Sponer came west to Las Vegas as a boy. His mother, a nurse, came here with a chance to manage a Medivist, a company referring doctors and health care professionals for medical house calls. Sponer said his mother later helped blaze the entrepreneurial trail he'd later follow. She started Horizon CompCare and Professional Health Services, now known as Ascentra.

Question: Did you start out thinking you'd be an entrepreneur?

Answer: No. Growing up, I thought I'd be a lawyer, because lawyers have credibility, I suppose. So after going to high school at Clark High, I went to the University of Southern Utah in Cedar City and then to Brigham Young Law School. I thought I'd end up being a lawyer at a big firm.

Question: You were a lawyer for a while, right?

Answer: Yes. My wife was getting her master's of business administration degree at the University of San Diego. So while she was doing that, I practiced construction law and contract law for a firm there.

Question: What brought you back to Southern Nevada?

Answer: Cost of living is one reason. San Diego is beautiful, but unless you're willing to commute two hours every day, it's hard to find an affordable place to live. Also my mother was back here. I came back and for a while worked as staff counsel for her company.

Question: And opportunity followed.

Answer: Right. My mother's company was ending its relationship with its pharmacy benefits manager and needed a new company to take over. We had to figure out what to do next, so I said I'd manage the pharmacy benefits. I started ScripNet and it was great because I had a built-in customer, Horizon CompCare. My mother owns half of ScripNet and I own the other half. At first, I was doing about 10 percent ScripNet and 90 percent staff counsel work. But more and more, I was doing ScripNet.

Question: Wasn't this rather different from lawyering?

Answer: Yes. Being a lawyer is very contentious, but I find business more collegial. You get to make the customers happy, you get to make the vendors happy. You and the client are building something together; you're creating something rather than competing over the same pieces of the same pie. I like being an entrepreneur and not reporting to anybody but my customers and my employees. I like being out with the employees and with my customers and learning about what they need and resolving problems for them.

Question: How does it work?

Answer: Our system lets pharmacies bill us online. We tell the pharmacist electronically at the point of sale whether the medications are covered or not. In the old days of workers' compensation, the pharmacy would have to send in a paper bill in the mail to the insurance company, which would then sometimes pay the bill, or sometimes deny payment. The insurer might, for example, decide the medications dispensed were not related to the workers' compensation claim. To avoid this, the pharmacies would often have to call the insurance company on every prescription to find out whether they would get paid before dispensing the medication. With ScripNet, there are no phone calls to make and no paper bills. The pharmacy just types it into the system.

Question: Your rapid growth seems astonishing. How were you able to grow so quickly?

Answer: The business is infinitely scalable. I don't have to buy another building and staff to work there and I don't have to by a warehouse and store inventory. I can grow as large as I was as quickly as I want with very little increase in overhead. Even if I have a client in Philadelphia, I don't have to open an office there because I can serve that market remotely. Managing the growth has been a challenge, making sure we have the cash flows and the staff in place to serve them. But we've been successful.

Question: You said you hate paper.

Answer: Yes. It's very labor-intensive. You have to take time to process it. You have to take time to store it. You have to have a place to store it.