SmartLight Analytics

Reducing healthcare costs for self-funded employers

healthcare costs

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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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City of Fort Worth and SmartLight Analytics Form Partnership to Reduce Healthcare Costs

FORT WORTH, TX, December 11, 2019 – The City of Fort Worth recently partnered with healthcare cost-reduction experts, SmartLight Analytics, in an innovative effort to alleviate the rising costs of employee healthcare. An initial analysis of employee healthcare claims from the previous two years showed that the ongoing partnership could save millions for the City over the next few years.

Given the estimate that 1 in 3 healthcare dollars in the US are spent on fraud, waste, or abuse, the City of Fort Worth was eager to find an independent partner with the required expertise to reduce unnecessary costs for employees, retirees, and taxpayers. The City of Fort Worth Human Resources department engaged SmartLight Analytics to review a subset of past paid claims in a pilot program. Initial findings showed that an ongoing partnership would give the City additional tools to continue to proactively fight against wasteful healthcare spending and decrease its overall healthcare costs. 

SmartLight CEO, Asha George, said its “singular objective is to meaningfully reduce the City of Fort Worth’s per member per month (PMPM) cost by identifying and removing wasteful spending from its annual health plan dollars.”

“The intended outcome of this examination was to report significant findings to Fort Worth on its health plan spend and also provide solutions for reducing potential wasteful spend in future payments,” SmartLight stated in its first report to the City.

Some examples of what SmartLight Analytics was able to identify include:

  • pass-through billing schemes where unscrupulous physicians route lab services to out-of-network labs who in turn send the claims to in-network rural hospitals in order to receive a higher reimbursement due to their remote location, or
  • medically unnecessary abusive urine drug screening and genetic testing claims, or
  • identifying claims submitted that violate the anti-kickback laws, or
  • overuse of emergency rooms.

Given the success of the initial engagement, SmartLight Analytics will now enter into an on-going partnership with the City. Once a wasteful claim is identified, SmartLight will pass that information on to the City’s current medical and prescription providers and work with them to get the money back for the City. Additionally, the medical or prescription providers may report these findings to authorities to help curb the abuse throughout the healthcare system. SmartLight Analytics anticipates the City could save up to $2-$3 million per year in reduced wasteful claim costs.

“We anticipate that SmartLight Analytics will identify claims with fraud, waste, or abuse.  Then, they will work with our claims administrator to recover the costs for the City, and have them credited back to us,” said Brian Dickerson, Fort Worth’s Human Resources Director. “This will be a win for our employees, our retirees, and the taxpayers of the City of Fort Worth.”

SmartLight Analytics provides a comprehensive solution to effectively reduce health care spend through proven methods developed over decades of focused experience. The City of Fort Worth engaged the firm to further reduce spending and save taxpayer dollars. The SmartLight Analytics clinical team led by board-certified physicians reviewed the claims that were identified as either being unnecessary, duplicates, or billing errors that are costing the City unnecessary dollars. The initial report was generated using statistical models and showed the City of Fort Worth exactly where there were issues. On a go forward basis, through their data analytics and clinical expertise, SmartLight will work with the City’s insurance carrier to eliminate future wasteful claims. 

The partnership will provide the City with significant savings.

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SmartLight Analytics grew out of a desire to take meaningful action on rising healthcare costs

In August 2016, SmartLight Analytics was founded out of a desire to help employers deal with the rising cost of healthcare and make an impact that would not only help big companies but thousands of their employees as well.

Employee healthcare costs are expected to top $15,000 per employee in 2020, according to research from the National Business Group on Health.

SmartLight Analytics is focused solely on reducing year-over-year medical spend for self-funded employers. Founder and CEO Asha George headed up the Payment Integrity departments inside various large insurance carriers for decades before forming SmartLight Analytics. SmartLight was created because she saw the need for more independent, pro-active intervention in reducing unnecessary healthcare spend. 

“The American healthcare system has become increasingly more elaborate and difficult to navigate over the past several decades. Within this environment of complexity and rising costs, over 95% of employers are now funding their own employees’ healthcare,” George explained, adding that industry experts estimate billions of dollars are leaking out of the system with no measurable improvement in patient health.

To significantly reduce this waste, SmartLight Analytics, LLC was formed by a group of industry insiders including George and her co-founder: Chief Medical Officer Dr. Franklin Baumman, a surgeon who spent 11 years as a medical director for UnitedHealthcare, the largest insurance carrier in the country.  

“We wanted to make a meaningful impact on the rising cost of healthcare,” George said.

With this end in mind, SmartLight uses statistical, clinical, and claims expertise to deliver the most complete cost reduction solution directly to the actual stakeholders – self-funded employers. Since processing 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. SmartLight delivers a low-touch, high-impact solution to self-funded employers.

Other organizations with the similar vision of reducing commercial healthcare costs, are primarily using member pricing transparency tools, allowing members access to pricing options for specific services. Whereas SmartLight is a comprehensive solution that works on identifying and resolving issues directly from the client’s plan funds, George explained. “SmartLight identifies wastes, coordinates with the employer’s claims administrator to prevent future waste and, most importantly, ensures that offsets and denials are credited back to the health plan.”

“I’m passionate about making a meaningful impact in this space,” George said. “Insurance carriers, in the role of third-party administrators, do their best to manage the waste in the system while processing claims, but we have, without exception, reduced spend by an additional 3-5% for our customers. We use statistical, clinical and data expertise developed over decades of experience to deliver the most effective cost-reduction solution available in the market, customized to your unique population.”