Dear Friend:

IntelliClaim News is intended as a resource of ideas that can help you with the challenges you face daily and assist you in making the most of your relationship with IntelliClaim. Here, you’ll learn about the situations faced by other members of the IntelliClaim client community, solutions developed to address those challenges, and about additions to our growing professional staff. We will also look for your participation by offering questions and comments that might be of interest to others.

Our industry is changing rapidly, and it is important that we all continue to refine our knowledge to address the pressures that arise daily from the market, the regulatory environment, and the provider community. Sharing what we learn, and articulating effectively why our organizations make the payment decisions we do will lead us to the consistent and defensible positions that represent the kind of best practice we aspire to. I hope you will find IntelliClaim News both interesting and useful. If you have questions or suggestions, please send us your comments at intelliclaimnews@intelliclaim.com, or contact me directly.

Thanks for your continued support,

Kevin Hickey - Chairman and CEO

Since IntelliClaim was founded in 1998, we have worked with more than 20 managed care payor organizations of all sizes, helping them develop solutions specific to their business needs. Recently, we welcomed two new members to the IntelliClaim customer community.

Anthem West, part of the Anthem, Inc., system of Blue Cross/Blue Shield plans, has signed on with IntelliClaim. In addition to our claim editing services, IntelliClaim will be working with Anthem to offer direct access to rule justification for members of their provider network – customized through Anthem’s own website. We expect the program to be up and running within 90 days.

Montefiore Healthplans, a provider-owned organization covering 135,000 lives in the New York Metropolitan area, has engaged IntelliClaim for our full suite of solutions, including "roundtrip" integration of IntelliClaim’s technology with their claims processing system. With a commitment to meet a tight schedule, Montefiore was up and running in just 60 days.

If you’d like to learn more about client solutions we have available, and how they might be customized for your needs, please contact Ed Brennan, ebrennan@IntelliClaim.com, 203-750-5145.

In June, we were proud to welcome Dr. Bruce Campbell as IntelliClaim’s new Chief Medical Officer. Dr. Campbell will work with our clients to identify opportunities to improve their claims policies, to make the most of IntelliClaim’s technology to enhance their decision-making and to communicate their claims processes to providers.

"IntelliClaim’s strategic approach and the depth of the company’s high-tech solutions appear to offer a great opportunity to secure higher efficiencies and strong provider relations throughout the industry," Dr. Campbell said. "I am delighted to be asked to participate in this effort, and I look forward to working closely with Kevin and my new colleagues."

Dr. Campbell brings to IntelliClaim the experience and insight gained during a distinguished career in health benefits and medical management. Between 1994 and 1997, he held several executive positions with Aetna, Inc., including Senior Vice President of Aetna US Healthcare and Chief Medical Officer of Aetna Health Plans. Dr. Campbell served as Vice President for Medical Programs at ScrippsHealth and was President of Monsanto Health Solutions. Most recently, he served as President and CEO of Camber Companies, a multi-disciplinary musculoskeletal ambulatory treatment center business.

"Bruce’s energy and expertise are a terrific asset for IntelliClaim’s clients," said CEO Kevin Hickey, "and his addition to the senior team is an important milestone in the growth of our business."

This month also saw the addition of Daniel Sherman as data analyst at IntelliClaim. As a data analyst, his primary responsibility is as a liaison between the client’s and the technical areas within IntelliClaim. A business systems professional with deep experience in the managed care environment, Dan joins IntelliClaim from HealthNet of the Northeast, one of the largest regional health plans serving over one million members.

Today, all medical claims payors face a common challenge – they must provide clear and consistent justification of claims administration so that both providers and consumers can better understand the actions taken by payors. The payors must demonstrate to consumers, providers and policymakers that they have a solid commitment to consistent and accurate processing of claims.

For this reason, providers often feel that they are kept in the dark about how a payor will ultimately decide which procedures to pay and which to deny. While remittance from a payor might provide a clear indication of what has been denied, the justification for that denial is not always clearly conveyed to a provider. Some providers will not accept the application of correct coding practices, regardless of the degree of justification or support, but the vast majority are accepting of payor decisions that are made with a thoughtful rationale and with consistent application.

Communicating the rationale for payment decisions is not always a simple capability for a payor to enable. Payors with system constraints struggle with the best way to communicate their payment decisions to providers. Legacy claims systems do not always allow for flexibility in applying payment methodologies that take provider contracts into account. Moreover, communicating the outcomes of claims editing (such as "bundling") often requires that the procedure be denied first, an instance further complicated by the need to draw additional supporting documentation from sources external to the claims processing system.

Industry trends, evolving state legislation (e.g., Georgia, Texas, New Jersey, New York, Colorado), and recent ERISA regulations indicate that these issues will only become more difficult. As payor organizations expand, state by state policy issues come into play, complicating the nature of information and how it can be shared. In addition to providing clearer direction and justification as to how a payor has reimbursed a claim, payors are being required to provide disclosure of those payment methodologies in advance.

More is at stake in this "transparency" issue than simple administrative efficiencies. At IntelliClaim, we believe that better communication of claims decisions and justifications are crucial for enhancing provider relations and, ultimately, strengthening the image of our industry among consumers and policymakers.

At IntelliClaim these emergent transparency issues are very much top-of-mind. Through both our advanced technology – grounded in the latest rules-based science of applied artificial intelligence – and our consulting services that support payor organizations at all levels, IntelliClaim looks for the smartest solutions, and the clearest path to productive transparency for our clients.

Recent press coverage on an effort we have underway to enhance fraud and abuse detection with one of our clients, from ADVANCE for HEALTH INFORMATION EXECUTIVES. http://www.advanceforhie.com/hxMCO.html

MCO Update: Fraud and Abuse Detection
by Robert Mitchell

Health plans regularly monitor physician-billing practices, often catching fraudulent activities after a claim has been paid. But health plans are now looking to catch these activities before it costs them any money. Health plans view this as a preventive solution that could reduce fraudulent activity from occurring in the first place.

What is fraud?

Grace Mary Altkin, manager of cost containment at Vytra Health Plans, a 200,000-member plan with 6,000 physicians and 38 hospitals on Long Island, said her company wanted to capture fraudulent activity before the health plan paid out any money. The health plan, which is piloting a fraud detection system by HNC Software of San Diego through a project with IntelliClaim, said it is exchanging data with HNC and has already gotten initial favorable results that could save money. "We have a fraud unit here and are identifying claims that need to be reviewed," Altkin said. "We're confident that we have the right systems and procedures in place, but there still may be some leakage . . . We want to identify any gaps, identify any trends and see if we can put in additional procedures to prevent us from paying incorrectly on fraudulent items or in paying incorrectly on abusive billing practices."

Gayle Esposito, a senior investigator in Vytra's special investigative unit, said determining if a claim is fraudulent requires the health plan to look at whether the provider's actions constituted a legitimate mistake, neglect or actual fraud. "I look for trends," she said. "We regularly use adjustment codes and our provider relations representatives educate the providers; if a provider continues to do something he or she has been told not to do, then we feel the provider has crossed the line."

Andrea Allmon, PhD, product director of HNC's predictive health care group, said, "There are providers who are genuinely good-hearted individuals, who want to maximize their clinic or office revenues so they may up-code a claim here or there. There are also providers who want to care for their patients but, because of perceived constraints on what insurance companies pay, might disguise a service so the insurance company pays for something that might not otherwise be covered."

Akshay Gupta, chief business development officer at IntelliClaim, said the question of intent is always considered in reviewing whether a claim should be reimbursed or whether fraud or abuse occurred, or whether it was simply an error or oversight. "A lot of errors occur because of the way the health insurance industry works; it's extremely complicated. And when a provider works with many different health plans, each with its own set of rules on how to bill and what can be billed, it can be confusing. Physicians sometimes bill for everything they can and let the health plan sort it out," Gupta said. "We help health plans deal with that complexity more effectively today, and through HNC's sophisticated software will now be able to help them by proactively identifying abusive or fraudulent behavior."

Steve Biafore, vice president of HNC Software's predictive health care group, noted that the General Accounting Office has said that managed care fraud and abuse is difficult to solve and, "it's commonly understood that there is about three percent hard-core fraud, to well over 10 to 14 percent losses due to fraud."

This is alarming because the government has projected national health expenditures to total $1.4 trillion and reach 13.4 percent of the Gross Domestic Product each year, according to National Health Care Expenditures Projections: 2000-2010 from the Office of the Actuary at the Center for Medicare and Medicaid Services.

Risky claims

Analysis information provided by HNC to Vytra includes a claim's risk score. HNC also supplies an explanation of why a particular claim may be considered risky. "A claim may be a risk because the provider's procedure mix is radically different from other providers or for other reasons," Allmon said.

After a claim has been identified as risky, there are a couple of scenarios that can occur. "First, investigators can decide to pay the claim and watch what the provider does. Or, they can simply deny the claim," Allmon said. "They could also suspend the claim, request further information, or deny the claim and investigate further, thus possibly leading to prosecution of the provider."

Mr. Mitchell is senior associate editor of ADVANCE for Health Information Executives.