Putting the Brakes on Fraud,
Waste and Abuse
An Enterprise-wide Approach
Umberto Reis
IT Director
SulAmerica Seguros
Robert-Duque Ribeiro
VP/GM—Fair Isaac Advisors
FICO
© 2014 Fair Isaac Corporation. Confidential.
This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
Case Study: SulAmerica Seguros
This Brazil-based insurer sought to implement an
FWA reduction system across their enterprise.
Here’s their story.
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© 2014 Fair Isaac Corporation. Confidential.
Context
The Brazilian Opportunity
“It [Brazil] looks like the potential the US
Market had 20 or more years ago”
Stephen Hemsley
CEO
United Health Group
© 2014 Fair Isaac Corporation. Confidential.
Context
The Brazilian Opportunity
Brazilian Population
(in Millions)
Poverty Index
as a % of Total Population
70%(est)
reduction
Segment A
Segment B
Segment C
Source: FGV, Itaú Unibanco; Definition of Social Economic Segments (household income from all sources):
E= R$0-R$1,033, D= R$1,033-R$1,619, C= R$1,618-R$6,977, B= R$6,977-R$9,097, A= > R$9,097
© 2014 Fair Isaac Corporation. Confidential.
Segment D&E
Context
The FWA Opportunity
Global Payment Card
Fraud = $12Bn (2012)
US Healthcare
FWA = $750Bn (2012)
Administrative Costs
Fraud
$750
$1,000
Abuse
Waste
~$143
~$408
~$200
Sources: FBI, General Accounting Office, Thomson Reuters
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© 2014 Fair Isaac Corporation. Confidential.
What really goes
towards Healthcare?
Context
Importance of the Problem
What Is It?
Fraud
Abuse
Waste
ACTION:
Knowingly Making a False
Statement or Claim
ACTION:
Improper use of
info/documentation
ACTION:
Misuse or Overuse of
Resources
RESULT:
Funding Unauthorized Benefit
RESULT:
Funding for personal gain
without evidence of
criminal intent
RESULT:
Funding Unnecessary
Costs
EXAMPLE:
Filing deceiving Claim(s) on a
service never performed;
False Claims, ID theft,…
EXAMPLE:
Up-coding of procedures
(Charge 1h when the visit
was15m), Billsplitting,…
Intent to Deceive
© 2014 Fair Isaac Corporation. Confidential.
EXAMPLE:
Unbundling of
Procedures or Duplicate
billings,…
Agenda
► SulAmerica
► SulAmerica
and FICO
► The
SulAmerica IFM Project
► First
Results and Roll Out Strategy
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© 2014 Fair Isaac Corporation. Confidential.
SulAmerica
► A Brief
Understanding About SulAmerica Insurance Company and About the
Brazilian Insurance Market
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© 2014 Fair Isaac Corporation. Confidential.
SulAmérica Corporate Profile
Largest
independent
insurance group
in Brazil
6.7 million clients
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© 2014 Fair Isaac Corporation. Confidential.
Founded in 1895
> 30,000
independent
brokers
$5.3 billion in
revenue
Health, Auto, Life
insurance, Private
Pension and Asset
management
Insurance in Brazil
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© 2014 Fair Isaac Corporation. Confidential.
SulAmérica Revenue Growth
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© 2014 Fair Isaac Corporation. Confidential.
SulAmérica and FICO
► Ten
12
Years Of Partnership in Technology for Decision Making Solutions
© 2014 Fair Isaac Corporation. Confidential.
SulAmérica and FICO
2005
2006
Enterprise
Blaze Advisor
License
2014
13
IFM
Implementation
On Health
Insurance
© 2014 Fair Isaac Corporation. Confidential.
2008
Auto Quote
Solution
Centralized
decisioning for
multiple
business areas
SulAmérica IFM Project
► The
Concept and the Process Changing Behind Our IFM Project for the
Health Insurance Business Unit
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© 2014 Fair Isaac Corporation. Confidential.
SulAmérica IFM Project
Current Process
Focus in high costs claims only
For Internal Health Claims Auditors
80% of hospitalization claims are technically audited
Only 3% of low cost ambulatory claims are
technically audited
75 % of the total amount of Health claims are not
analyzed
97% ambulatory claims are not analyzed
.
Claims are selected by legacy systems static rules
> 2,000,000 Health Claims / Month
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© 2014 Fair Isaac Corporation. Confidential.
All the analysis are done on paper based process
SulAmérica IFM Project
Planned Process
Predictive Analysis and the new Health Claim Workflow
New Claims Workflow
Predictive
model scores
the claims
Hospitalization claims audited with score and
context info
Increased amount of analyzed ambulatory claims
Claims are selected by predictive score
All the analysis done by a workflow based process
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© 2014 Fair Isaac Corporation. Confidential.
SulAmérica IFM Project
► From
looking at the past (Investigation) to anticipating the future (Predictive
analysis)
Investigation
Predictive Analysis
Looking to the future
Isolated views of data
Understand what happened
Analyze
Key Performance Indicators (KPI’s)
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© 2014 Fair Isaac Corporation. Confidential.
Present
Looking at the past
Integrated view of data
Prevent FWA
Optimize
Key Performance
Predictors (KPP’s)
SulAmérica IFM Project
► The
IFM models select the most relevant variables and scores all the claims
based on their characteristics
Inputs
Claims Segmentation Curve
Hundreds of internal and external variables
with predictive value
(Procedures) + (Age) + (Sex) + (Provider) +
(UF) + (Health Insurance Plan) + ...
Results
Model Job
Score Output
92
Ex: High cost hemodialysis for a member of
our chronic program
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© 2014 Fair Isaac Corporation. Confidential.
High
Low
Complexity
SulAmérica IFM Project
Process Overview
Current Model
Claims
Input
Claim Database
Analysis
Payment
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© 2014 Fair Isaac Corporation. Confidential.
Claim
Digitalization
Workflow
Claim
Database
Claims
Input
92
Predictive
Scoring
Planned Model
Avoid Payment
Analysis
Payment
Transformation Journey
Avoid Payment
SulAmérica IFM Project
6 months of Planning
May 2013
Jul 2013
Pre Project Phase
►
Tool Selection:
►
►
►
►
SAS
IBM
FICO
Budget planning
► ROI Analysis
1 year of development
Oct 2013
Conception Phase
►
Detailed Planning with
FICO
► Legacy Integration
mapping
► Budget Refining
© 2014 Fair Isaac Corporation. Confidential.
Oct 2014
Development Phase
►
►
►
►
►
►
20
6 months of Roll out
On Site FICO Workshops
IFM Model Definition
>9 IFM Model Runs to refine the results
On site IFM implementation
Workflow implementation
3 months of Pilot with 3 auditors/analysts
Roll out
►
6 months to full
operation
► From 3 to 190
Auditors/Analysts
Apr 2015
First Results and Roll Out
► The
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First Pilot Period Results and the Roll Out Planning
© 2014 Fair Isaac Corporation. Confidential.
SulAmérica IFM First Results
3 months of FICO &
Sulamerica model refining
Execution
Date
Analyzed
Claims
$ Avoided
Payment
1ª run
04/08
204
2,755
2ª run
11/08
220
910
3ª run
18/08
171
1,937
4ª run
25/08
386
7,783
5ª run
01/09
425
16,223
6ª run
08/09
390
8,982
7ª run
16/09
469
8,768
8ª run
24/09
506
12,755
9ª run
30/09
621
15,426
10ª run
07/10
550
28,900
11ª run
14/10
425
11,747
12ª run
22/10
341
20,980
4,708
137,170
Total
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© 2014 Fair Isaac Corporation. Confidential.
from:
Avg
US$ 9.00 /
claim
to:
Avg
US$ 47.00 /
claim
SulAmérica IFM Roll Out Planning
Pilot Phase
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Production Phase (Roll Out)
Aug–Oct
Nov
Jan
Apr
Solution Validation
IFM Model Adjusts
Workflow fine tune
Training
IFM Model Adjusts
Training
IFM Model Adjusts
Training
IFM Model Adjusts
3000 Claims
100,000 Claims
300,000 Claims
650,000 Claims
5% of the workforce
15% of the workforce
50% of the workforce
100% of the workforce
© 2014 Fair Isaac Corporation. Confidential.
Sum of Avoided Payments
SulAmérica IFM Financial Projection
US$
21MM
US$
266K
Nov/14
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© 2014 Fair Isaac Corporation. Confidential.
Dec/17
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Thank You!
Umberto Reis
umberto.reis@sulamerica.com.br
© 2014 Fair Isaac Corporation. Confidential.
This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
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Umberto Reis
umberto.reis@sulamerica.com.br
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© 2014 Fair Isaac Corporation. Confidential.