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Success Story: Large Self-Insured Employer Gains Control of Spiraling Healthcare Costs Due to Fraud and Waste

By admin February  01,  2017 // Clarity, Compliance

About David Chase: Co-founder of the Health Rosetta, Chase was named one of the most influential people in Digital Health due to his entrepreneurial success, public speaking & writing that recognizes healthcare’s under-performance but contrasts that with a growing cadre of high-performing organizations that have solved healthcare’s toughest challenges. Chase, widely published, co-authored the healthcare Book of the Year in in 2014.

Like many self-insured employers, healthcare costs are growing exponentially. A large self-insured employer was seeing its healthcare costs increase at a rate of three times its profits over a ten-year period and hired 4C to provide clarity and control on its spiraling healthcare costs by looking into fraud and waste.

Through our one-of-a-kind platform, we reviewed over 4 billion claim lines that were paid by a third-party administrator over a seven-year period. Our adaptive predictive analytics and behavioral profiling sought to identify anomalies such as:

  • 2 colonoscopies on the same patient on the same day
  • 2 circumcisions on the same patient on the same day
  • 2 gallbladder removals on the same patient one day a part
  • 2 caesarian sections at 2 different hospitals for the same patient on the same day
  • 12 occupational therapy evaluations for the same patient on the same day

This company thought it was detecting fraud and waste but 4C found that over 571,000 claims or 16% of claims were unreasonable or fraudulent claims.

Now that it is plainly obvious that there is large amounts of fraud and waste, this company has the ability to stop this from happening again by embedding 4C’s state-of-the-art fraud detection. 4C can detect highly-questionable claims in real time and stop them from being processed – saving money by stopping the bleeding from rising healthcare costs.

By serving as a Business Associate under HIPAA, 4C also takes on the risks related to managing personal health information. Therefore, the companies will not have to take on the cost or complexity of attempting to detect and manage healthcare fraud themselves.

4C’s fraud prevention services puts the control back to the employers so that fiduciaries and companies meet their responsibilities under ERISA and avoid legal risk, including employee class action suits and government prosecution.