For the second time in the past year, Emdeon is bolstering its revenue cycle management platform with technology designed to detect and eliminate fraud.
Targeting a segment of healthcare that costs the nation $200 billion to $600 billion a year, the Nashville-based developer of healthcare revenue and payment cycle management services is adding Insurance Fraud Manager, from Minneapolis-based FICO, to its software suite. The business analytics software identifies fraud early in the billing process, speeds the processing of good claims and helps payers comply with mandated payment timetables.
“The ability to do pre-payment scoring on a wider range of claiming entities means that payers will be able to detect more potential fraud and prevent larger losses,” said Andrea Allmon, product director at FICO. “FICO’s predictive analytics have proven far more effective than rules-based methods in early detection of sophisticated fraud schemes.”
Officials of the two companies say a pilot study conducted in two states identified millions of dollars in cost savings through the use of Emdeon-FICO software.
Last year, Emdeon acquired The Sentinel Group, a Lake Forest, Ill.-based developer of data analytics solutions and fraud investigation technology.
“Creating an efficient healthcare system helps all stakeholders: payers, providers and consumers, and that is why it is one of Emdeon's top priorities,” said George Lazenby, Emdeon’s CEO, in an April 14 press release announcing the FICO partnership. “By putting FICO’s advanced, predictive fraud analytics into the hands of payers who pay the nation's healthcare claims, we are helping our customers address one of the largest, most debilitating sources of friction in the healthcare system and ultimately creating change that will lead to efficiency.”
Company officials say FICO’s technology has helped the credit card industry reduce its fraud expenses to about 7 cents per $100. They’re now targeting a healthcare industry that spends roughly $200 billion to $600 billion a year on fraud, waste or abuse, or as much as $10 per every $100 spent.
“FICO fraud management technology has made an enormous impact on the credit card industry since its introduction in 1992, cutting losses by an estimated $10 billion over that period of time. Together with Emdeon, we intend to make a similar contribution in healthcare,” said Mark Greene, FICO’s CEO.
Analysts say health insurers have been largely unsuccessful in detecting fraud, and will have to embrace pre-pay, pre-adjudication tools and new risk management technology. Maureen O’Neil, a principal research analyst for Gartner, sees the move as a “profound cultural change” for insurers.
“Healthcare represents one-seventh of the U.S. economy, and it's rife with examples of fraud,” said Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association. “By increasing awareness and improving the detection and prevention of healthcare fraud, we can begin to impact the continuing, yet burgeoning market need of controlling soaring healthcare costs.”