A large insurance and wealth management group with operations all through North America was looking for a better way to conduct health insurance claims monitoring. Specifically, the insurance wanted to:
- More efficiently review all health insurance claims submitted for reimbursement
- Reduce manual assessment of claims that were time-consuming
- Eliminate random audit of claims that did not address the claims there were of the highest risk
- Eliminate manual processes that relied on e-mails and conversations to get issues resolved.
- Detect more fraudulent claims that were affecting premium prices and profitability.
- Find an easier to get statistics on their claims process so they could quickly assess how their programs were performing and areas that required attention.
To meet the above needs the insurance company chose Alessa. The solution does the following for all their health claims:
- Aggregates data from internal business systems to get all relevant information to assess the claims
- Improves the quality of the data being used in the resolution process
- Automates monitoring of relevant data and reduces time spent by investigators
- Applies business rules and fraud detection models to evaluate the validity of the claim and assess whether there is any risk that it is fraudulent
- Identifies non-compliant transactions and activities early to prevent the business from being impacted negatively
- Creates a risk score for the claim (e.g. low = less likely to be a fraudulent claim, high= suspicious claim)
- Automatically sends alerts to investigation teams for claims with risk scores above a certain level
- Ensures that all suspicious claims are investigated and resolved in a timely manner
- Tracks all claims and creates reports for management to review how the solution is performing
Risk Scoring Methodology
For the risk-scoring portion of the solution, Alessa computes a score for a claim by applying weights to risk factors. The scoring model is configurable to meet the requirements of the insurance company and the following are configurable:
- Risk factors
- Criteria for each weight band
- Timeline for risk to be degraded
Workflow and Case Management
In the workflow process and case management process, Alessa allows the insurance company to:
- Link-related matters that may assist the user in making decisions
- Tracks the entire history of the issue, including who did what and when
- Provides remediation guidelines on how to approach the problem
- Lists indicators including possible root causes and the actions performed that will inform processes improvements
The rules and analytics that are used can vary depending on the needs to the business. Examples of analytics used by this insurance company include:
- Declined claim resubmitted
- Claims during hospitalization
- Same certificate for different pharmacies and doctors
- Potential excessive provider submission
- Fee splitting
The fully integrated modules within Alessa transformed how the insurance company reviewed claims and addressed fraud.
Over the last 12 months, Alessa has been able to detect enough claims that required investigation to provide a return of return on investment (ROI) of just over 95%. The customer is so pleased with Alessa that they have decided to take their insurtech solution to the next level.
The company has agreed to expand its implementation so it can reduce alert volumes and alert resolution time. To reduce alert volumes, Alessa is going to reduce the number of false positives, improve alert scoring and identify scenarios that don’t require investigation (based on past investigations). For improvement in alert resolution time, Alessa is going to be used to optimize their existing processes by automating existing manual and repetitive tasks being done by company investigators.
The company is also going to use Alessa to improve the average time required for the remediation of high-risk claims.
White Paper – Battling Insurance Claims Fraud
Insurance companies and providers of health care benefits lose hundreds of millions of dollars yearly due to fraudulent claims for health benefits. Some of these are bogus claims that originate from insured persons, while others are payments for insured services that are not needed but are wrongly prescribed by providers who stand to make illegal profits.