Case Study

A Southern State Saves $4 Million Annually with KYP

Saving $4 Million
In: Case Study0
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The State was losing Millions of $ in fraudulent claims. These excessive claims were increasing year-on-year. The ACA’s new set of compliance requirements, on Provider screening, were almost impossible for the State to incorporate as its existing evaluation processes were completely paper-based, time-consuming and lagging in Provider insight. The technology vendors who approached the State couldn’t give any promising picture on how they could solve the State’s problems.  They dint have any working models.

Objectives

  • Incorporating the ACA mandates and lowering the healthcare costs
  • Eliminating annual losses to the tune of Millions of $
  • Improving the overall efficiency of the State Medicaid system

 

The State was losing Millions of $ in excessive claims

The Problem

  • The Medicaid analysts had little or no idea about the Provider’s / applicant’s history.
  • The Providers used to submit paper-based application forms and related documents which were complicated to evaluate as it used to run for tens and sometimes hundreds of pages.
  • The effectiveness of this manual provider credentialing in a completely paper-based environment was very poor.
  • The State analysts dint have any out-bound or external data to evaluate these Providers and relied only on these documents submitted by the Providers.
  • Also, there was no concept of regular audits and outcome reports on the Providers.
  • The information gathered by State analysts weren’t sufficient and dint support them in making the right decisions on the Provider’s State Medicaid inclusion.

All these amidst the Federal Reserve’s observation that several thousands of Providers (both organizations and individuals) have been convicted in healthcare fraud causing Millions of $ in losses to the State governments. The available data were highly fragmented – all maintained in paper-based files, making the task of Provider evaluation, highly difficult and poorly coordinated. There was no supporting information from other States about the Providers. This allowed several convicted Providers from one State to apply for Medicaid services in some other State without getting caught for years.

The Obstacle

The applicable Affordable Care Act (ACA) Part 455 Subpart E requirements brought about a huge transformation in terms of the volume of checks to be performed on the Provider applications. This necessitated the inclusion of automation of Provider credentialing process, frequent audits, maintaining a history of Provider enrollments / re-enrollments and generating comprehensive reports on each Provider application. The existing staff strength of around four enrollment analysts was highly in-sufficient to effectively implement the new mandates, making it next to impossible for the State Medicaid agency to carry out all these additional checks and audits effectively. Additional resource hiring was never an option to compensate for these new mandates. Apart from automation of the credentialing part, compliance to ACA also required the Medicaid agency to perform frequent audits on the existing enrolled Providers as once good may not necessarily be always good. Unfortunately, implementation continued to remain slow and the payer focused on minimum compliance vs. using the regulations as an opportunity to modernize technology and processes to achieve true front-end fraud prevention.

 

The Solution


The State was lacking a front-end fraud prevention system. Initially, the State was inclined towards outsourcing the whole job of process automation thereby bringing in compliance. This would mean that any slight modification to the process would necessitate them to depend on the service vendor to make relevant changes.

That’s when the State encountered Digital Harbor. Unlike other vendors, Digital Harbor’s Know Your Provider (KYP) was live and visible. It was the first time they witnessed a fully functional system that not only complied with ACA requirements, it offered a comprehensive picture of the Provider-under-evaluation.

The State was able to instantly realize the benefit that they could derive out of KYP’s innovative features such as Provider risk scoring, proactive alerts and 360-degree information enrichment.

Unlike outsourcing, KYP was a do-it-yourself product. This added to their inclination as all data and processes would be in their finger tips and there was zero external dependency for updates, reports, modifications and operational changes.

 

How KYP enabled front-end fraud prevention for the State?

It all began with the concept of “Deter and Deny”. With the implementation of “Front-end Fraud prevention”, the risky providers were detected quite early at the time of enrollment (Screening) and were continuously monitored to detect the first sign of risk in their evolving profile (Monitoring). Prior to the implementation, the major issue faced by the Enrollment analysts were to identify the suspects from among thousands of enrollment applications, including those who were already rejected by other State’s Medicaid system. KYP Screening clearly unleashed each Provider’s history of business transactions, government actions and State level exclusions which enabled the analysts to make informed and quick decision on those Provider profiles. KYP Monitoring helped the analysts to detect any possible fraud threats from the existing Providers even before its actual occurrence.

 

benefit

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