FICO (Minneapolis) has released FICO Insurance Fraud Manager (IFM) 3 — Healthcare Edition, which includes enhanced functionality for targeting healthcare insurance fraud, according to the vendor. FICO IFM 3 uses real-time predictive analytics to find patterns of fraud and abuse before payments are made, significantly reducing the costs of fraud by enabling health insurance companies to better avoid the payment of fraudulent claims, according to the vendor.
The FICO solution is aimed at helping health insurers avoid the "pay-and-chase" model of fraud fighting, where by companies pay questionable claims in order to remain in compliance with regulatory payment timelines and attempt to recover payments made on fraudulent claims later. FICO IFM 3's predictive analytics-driven capabilities, which represent a paradigm shift from the prevalent rules-based systems used by insurers, can identify aberrant data patterns indicating fraud earlier in the process — providing the proof of fraud before payment that insurers need in order to comply with regulations.
"The risk of healthcare fraud rises in a weak economy as more people become tempted to try and cheat the system," says Russ Schreiber, vice president, FICO. "IFM 3 will make it easier for companies and government agencies to detect fraud at the claim level, thereby avoiding payments on fraudulent claims. In cases where payments have already been made, the scoring system will help companies prioritize recovery efforts and improve efficiency in collection."
Highmark, one of the largest healthcare payers in the U.S., leveraged an earlier version of FICO IFM to automate and improve fraud and abuse detection, FICO reports. Highmark required a solution that could delve deeper into relationships among claims, provider and member data to uncover complex patterns of fraud. Within the first few months of implementing FICO IFM, Highmark identified 83 new fraud cases. Of these, the average dollar value per case exceeded the total price of the software for one year, FICO claims. Today, Highmark is alerted to more potential and higher value fraud than it was with its previous systems and procedures, according to the vendor.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio