SmartLight Analytics

Reducing healthcare costs for self-funded employers

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SmartLight Analytics named “Outstanding Service Innovation” winner in the D CEO 2020 Excellence in Healthcare awards

SmartLight Analytics is honored to be recognized by D CEO as a 2020 Excellence in Healthcare Award winner for our work to reduce healthcare costs for self-funded employers. The work to identify and eliminate fraud, waste and abuse in healthcare claims this year has become especially important as employers continue to provide coverage for employees during the pandemic.

For the team at SmartLight Analytics, however, the opportunity to make an impact in making healthcare more affordable is our true reward. We also want to thank Health Transformation Alliance, who nominated SmartLight for this award. Our partnership with HTA has broadened our ability to help self-funded employers across the country to eliminate wasteful and fraudulent spending in their healthcare plans. Moving into 2021, we are ready to partner with more companies to reduce healthcare costs without disruption to the quality of care and coverage for their employees. Making healthcare more affordable is our continued mission.

D CEO 2020 Excellence in Healthcare winners

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Eliminating fraud, waste and abuse in employee healthcare claims adds value without disruption

By: Vispi Jilla, SmartLight Analytics Principal Advisor 

Healthcare and benefits are tools companies use to gain a competitive advantage to attract and retain talent. Both are used in the recruiting process to attract high performing employees. The question is how do you continue to offer competitive benefits to attract and retain talent while costs for healthcare, in particular, continue to rise?  

Businesses focus on profits and cost savings. So, reducing the cost of healthcare benefits for self-funded employers is paramount. It is important to provide the best coverage to attract and retain the top talent, but without jeopardizing company profits. SmartLight has the tools — not just the analytics but the medical expertise — to find fraud, waste and inefficiencies existing in employers’ healthcare spending. Identifying, remediating, and eliminating these costs will allow employers to find those savings needed to limit excess health costs and continue providing quality healthcare coverage to employees.  

How are savings realized? When it comes to reviewing claims data, what many do not understand is that statistical models and algorithms are not the only required tool to find payment errors in healthcare claims. Experience and expertise is also are instrumental to detecting outlier patterns and anomalies in claims. Many companies rely on analytic know-how but do not have the expertise in house to review claims at this deep level. SmartLight combines data analysis and the clinical expertise to provide a new and significantly increased level of review. This depth results in greater savings.  

In most companies, executives rely on “runs” from payers, say BCBS for example, to explain the expenses going into employee healthcare claims. Most often, HR pays the expense without much review. Seldom is anything ever done to investigate the healthcare claims because the numbers are so opaque and the expertise is not there to analyze claims. Businesses classify the expense as “healthcare inflation” and just keep passing the increase on to employees in the form of higher premiums or co-pays or deductibles. The rising costs of healthcare can also eat into profits. 

Partnering with SmartLight Analytics’ team of experts provides is on average a 4X ROI. If you are a self-funded employer with $100 million in healthcare costs, saving $3-5 million from fraud, waste and abuse will allow you to pass that savings (instead of expense) on to your stakeholders in the form of profits, and to employees through possible reductions in premiums. Working to reduce these inefficiencies in healthcare claims can also help improve the quality of employee care. When done correctly, it is a win-win. 

HR is tasked with so many processes in today’s corporate world; these executives need an independent advocate with the necessary expertise to find and reduce the rising healthcare costs in their sponsored healthcare plans. Unlike an expense like purchasing steel or trucks where you can simply shop around for cost saving options, it is not easy to change healthcare providers. It can cause considerable employee dissatisfaction when changing insurance carriers.  The better option is to make your existing healthcare provider more efficient and eliminate fraud, waste, and abuse in the claims, it adds value without disruption. Then HR can focus on other things instead of spending finite resources on deciphering healthcare costs. 

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In healthcare claims, does distance matter?

Can the distance between your medical provider and the lab used to process your test results tell you anything about potential fraud, waste, or abuse? In fact, it can.  

In reviewing healthcare claims, data specialists use geospatial analysis to compare distances traveled for lab services. This strategy is used in one of many inferential analysis models that is not searching for a specific medical code within claims, but uses statistics and probability to determine if an observed action differs from an expected action. This can lead to a great deal of information inside of healthcare claims.  

How? It begins when analysts calculate a mathematical score that evaluates the actual distance traveled for lab services compared to what is the expected distance. One claim reviewed by the SmartLight Analytics team expected a distance of seven miles for lab work, the actual distance was two miles from the provider. That claim was then compared to another claim where the expected distance for lab work was 10 miles, but the actual distance was 2,976 miles. This drastically different mileage might indicate a pass-through billing lab scheme and at the very least requires further investigation.  

When working with businesses across the country, data analysts have found instances where providers have sent lab work or even bill for services across thousands of miles and sometimes even across state lines unnecessarily. Geospatial analysis has also been used to find claims where services were billed hundreds of miles from where the member employee could have reasonably been assumed to be that day. For example, a claim was flagged because it contained billing for an office visit to a nurse practitioner on a specific day as well as billing for tests conducted at a rural hospital 350 miles away on the same day. To believe this occurred as billed, the member would have had to travel more than 350 miles from his or her home on the same day for these tests. What likely happened was that the member saw the provider near home and the provider sent the claims to the rural hospital for billing. Such claims would then be investigated further to determine whether or not it was fraud or just an unusual case or a very sick patient who needed a specialized service. 

Geospatial analysis is just one of 40 different proprietary models used by SmartLight analysts to find fraud, waste, and abuse within healthcare claims.  

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SmartLight joins forces with Health Transformation Alliance to reduce healthcare costs for some of America’s largest employers

DALLAS, TX – SmartLight Analytics formed a new partnership with Health Transformation Alliance recently to reduce healthcare spending by identifying and eliminating fraud, waste, and abuse in employer self-funded healthcare claims. HTA, a core group of powerhouse companies, combined forces to negotiate lower healthcare costs. SmartLight brings a new level of depth in analytical, clinical and data expertise to HTA member companies.  

SmartLight Analytics helps HTA accomplish our mission of providing superior health outcomes at lower prices by helping plan members in need while reducing errors and outright fraud within our health plans in way that has not been done before by most large self-funded employers.

Lee lewis, chief strategy officer & gm medical solutions at HTA

The new partnership could save millions, if not billions, in spending for HTA members at a time when healthcare costs are predicted to rise dramatically in a post-pandemic environment. With more than 50 of America’s largest companies a part of HTA, the joint agreement with SmartLight Analytics to work with its members could shake up the industry by exposing the fraud, waste and abuse that has existed in the U.S. healthcare system for years but remained largely under the radar. 

“HTA members appreciate our focus on fraud and our carrier-friendly approach to not only finding issues but resolving them and preventing them from reoccurring so wasteful spending does not happen in the first place,” said Asha George, co-founder and CEO of SmartLight Analytics.  

HTA aims to combine the purchasing power and talent of its members to improve health outcomes and get superior value for the healthcare investment made within its members’ self-funded employee healthcare plans. Its membership includes some of America’s largest corporations including American Express, Quest Diagnostics, IBM, Prudential, Pitney Bowes, The Hartford, and The Coca Cola Company. SmartLight Analytics brings to the HTA the ability to take a deep dive into the corporations’ employee healthcare claims. Using inferential analytics that does not presuppose data outcomes or require knowledge of schemes beforehand, SmartLight can identify wasteful spending which employers and third-party administrators may not know exists. SmartLight’s team of statistical and clinical experts have been able to identify fraud, waste and abuse that amounts to 3-5% of a company’s total healthcare spend. 

“SmartLight Analytics helps HTA accomplish our mission of providing superior health outcomes at lower prices by helping plan members in need while reducing errors and outright fraud within our health plans in way that has not been done before by most large self-funded employers,” said Lee Lewis, Chief Strategy Officer & GM Medical Solutions at Health Transformation Alliance. “HTA is transforming healthcare to deliver more value to everyone, which is exactly what SmartLight Analytics is doing with its analytic methods and expertise. They are passionate about reducing healthcare spending.”  

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HTA is a cooperative of self-insured market leaders with employees across the U.S. aiming to drive better health outcomes for employees and their families covered by self-insured employer health plans.  

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How does looking at pharmacy claims combined with medical claims help find fraud?

When it comes to healthcare claims analysis, combining both medical and pharmacy claims data provides a more thorough picture of what is happening for specific members (or dependents) and adds an additional analytical layer to help find different types of fraud, waste or abuse that might exist.

A case study from SmartLight Analytics provides an example of how the combined data can uncover abuse. The case uncovered prior authorization abuse in pharmacy claims resulting in thousands of dollars of on-going fraud.

 SmartLight analysts noticed a set of pharmacy claims for one member with several red flags:  the member was receiving multiple controlled substances and using multiple pharmacies (at least three) to fill and repeatedly refill prescriptions for Oxycodone and Fentanyl. The Fentanyl prescription was for Subsys, which is a spray specifically approved for breakthrough pain in cancer patients. Dr. Franklin Baumann, SmartLight Analytics CMO and co-founder, called this a “very specific drug used in very specific cases.”

The analysis found that for over a year, every single month the member was receiving a prescription for Subsys at the cost of $10,907 per month. The employer’s plan was continuing to pay for this large claim. It was verified that the employer’s plan allowed this drug with a prior authorization only in cases where an employee has cancer. Once SmartLight’s statistical team noticed these pharmacy claims, they turned their research over to the clinical team (including board certified physicians) to compare these findings with the member’s medical data.

“We know there are very strong policies around this particular Fentanyl. It is only used for cancer and, specifically for cancer related breakthrough pain. In this case, it received prior authorization which means the prescribing physician indicated that in the records.”

Having looked at the bigger picture of this member’s medical and pharmacy claims data, there was no indication of any kind of cancer diagnosis.

The clinical team performed detailed historical research on all diagnosis and procedure codes submitted for this member and found “very clearly” that there was no indication of current cancer, current treatment for cancer and probably no prior treatment for cancer.

“We can say that with some confidence because of the way medical codes work.” Dr. Baumann explained. “Generally, when you have a serious cancer and residual effects of cancer, it’s going to get carried along in your medical diagnosis codes.”

SmartLight then brought its findings to the insurance carrier. “The way we bring this up with the carrier (who paid the claims) is that we don’t see it on our end (a cancer diagnosis). Based on everything we saw, it’s not there. When they looked at it, they agreed with us.”

Dr. Baumann said the repeated claims had fallen through the cracks after a prior authorization was issued initially. SmartLight partnered with the carrier to stop the payment on these claims and continues to monitor the case for the employer.