ClaimsGator for Insurance (Property & Casualty, Healthcare)

A 2008 study by the Quality Planning Corporation estimated up to $16 billion annually is lost in premium leakage. While not all of it can be attributed to underwriting fraud, this indicates a systemic failure among insurance companies to allocate correct underwriting risk across its applicant base.

In January 2009, two Chicago-area doctors were charged in cases of health-care fraud. They received almost $14M in reimbursements from insurers on treatment that was never performed. Allegedly the doctors acquired private healthcare information on certain patients and hired people as 'billers' to submit claims to Medicare and other insurers.

In another case from March 2008, the New York District attorney reported a fraud ring that had cheated insurers out of $6M. The fraud ring comprised 13 persons, including six medical professionals, and a team of runners. It would stage accidents, and the "patients" would be sent to a medical mill where a team of therapists prescribed unnecessary tests and diagnosed soft tissue injuries requiring purchase of expensive medical supplies.

ClaimsGator is the technology insurers use to curb the fraud such as that described above. The integration of analytics with the transactions adjudication and investigation is termed 'embedded analytics'.

Embedded analytics in transactions processing

The process flow in the image above shows how ClaimsGator integrates analytics into the insurance claims or underwriting process. ClaimsGator not only mirrors our clients' standard business process, but also provides checks and balances for controlling their costs. ClaimsGator integrates the audit process in the three way communications between the service providers, the SIU/auditors and the ClaimsGator rules engine.

Underwriting fraud - the poor cousin!

The Coalition Against Insurance Fraud blogged about underwriting fraud being the poor cousin to other types of auto insurance crimes. They point out that law enforcement treats premium fraud scams lightly. In several states misrepresentation on policy applications is not considered a criminal offence. The relatively low importance to this type of fraud is unfortunate since a 1% reduction in policy errors could mean as much as 20% jump to an insurer's profits (Source: Quality Planning Corporation, January 2010). Especially for insurers who use the Internet as a sales channel, embedding the ClaimsGator audit engine into the application process pays rich dividends. Contact us to to learn more about out success stories in curbing underwriting fraud.

Why ClaimsGator?

In its April 2010 report, Gartner identified the top 10 technology initiatives with the best return on investment for an insurer. These are listed below:

• Modern policy and claims management systems,
• Web services and SOA tools,
• Business intelligence and analytics,
• Predictive modeling tools,
• Advanced fraud detection solutions,
• Web 2.0 and social networking technology,
• Product development and configuration solutions,
• BPM solutions, including workflow and rule engines,
• Portal and Internet technologies,
• Mobile devices/technologies,

We hit seven of the above. Contact us to learn how we deliver on these.

How does ClaimsGator capture the above type of fraud?

ClaimsGator is an auditing tool that reads in the claims received by the insurer and identifies aberrations in behavior by each entity that sits between the insurer and the claimant. These entities can be the medical professional, the auto-body shop, or even the adjuster appointed to validate the claim.

The technology incorporates a combination of advanced analytics and a unique web interface for exploratory analysis. There three categories of fraud that we identify:

• Non-existent procedures or customers,
• Up-coded service procedures,
• Collusion among different service providers (patent pending).

 

ClaimsGator uses artificial intelligence techniques and multivariate analysis to detect deviations in the partners? behavior. The chart graphically represents the technique of deviation detection. The 'norm' is the center of the grouped claimants. The further a specific claimant is from the center, the higher the likelihood for fraud.

ClaimsGator also offers business process integration via customizable modules for case management, investigation workflow management and accounting. This helps ensure that not only do you identify who is cheating you, but you also have the support to initiate recoveries.