SmartLight Analytics

Reducing healthcare costs for self-funded employers

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Exposing waste in our healthcare system means taking action now

The rising cost of healthcare in the United States is unsustainable for big companies who must provide health coverage for their employees in order to attract and retain talent. This was an issue long before COVID-19 became a regular part of our vocabulary and will be long after the pandemic is under control. Seeing healthcare costs through the lens of data analytics gives employers with self-funded healthcare plans the view to one way in which the problem can be addressed right now. Eliminating even a portion of the dollars being lost to fraud, waste, and abuse within healthcare claims would have a substantial impact in lowering per member per month costs for employers. Industry experts estimate that billions of dollars are leaking out of the system with no end in sight. Making a meaningful impact on the rising cost of healthcare can begin with using statistical, clinical, and claims expertise to deliver the most complete cost reduction solution directly to the actual stakeholders: self-funded employers.

As more and more companies shift toward the self-funded model for healthcare, business leaders have little awareness of how their dollars are being spent. There is waste within the system as well as significant fraud and abuse with extraordinarily little transparency. Since processing healthcare claims is outside the core competency of most employers, patterns of error often go unnoticed and result in the unnecessary spend of health plan dollars. Employers need the expertise necessary to evaluate payments for appropriateness in the form of independent, pro-active intervention on a regular basis and for every claim.

Insurance carriers, in the role of third-party administrators, do their best to manage the waste in the system while processing claims, but their focus lies on moving claims fast and paying claims. The addition of an independent review using statistical, clinical and claims experts can deliver the most effective cost reduction solution on the market, customized to each employer’s unique population. There is real value – trackable ROI – in eliminating fraud, waste, and abuse from healthcare claims. Finding providers duping the system through pass-through billing schemes or waste in the form of medically unnecessary testing or abusive ER users can bring employers up to 5% or more reduction in costs.

The best reviews are done with independent experts and carriers as partners in the process of analyzing claims and identify areas for savings. When a regular and complete review using methods such as inferential analytics and predictive modeling is used to help carriers do their job it can fill in the gap when it comes to fraud, waste, and abuse oversight.

Finding the well-hidden and overlooked fraud, waste and abuse that is contributing to the rising cost of healthcare can be done. It just takes employers who are willing to address the issue and work through process that will ultimately drive value and improve care for their employees.

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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.