MINNEAPOLIS — August, 24, 2009 — FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced the general availability of FICO™ Insurance Fraud Manager 3 – Healthcare Edition, with enhanced functionality for targeting healthcare insurance fraud. FICO Insurance Fraud Manager (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 healthcare insurance companies to better avoid the payment of fraudulent claims.
Insurance companies often pay claims that may appear potentially fraudulent to remain in compliance with government regulated timetables for claims payments, and later attempt to reclaim payments made on fraudulent claims. This “pay and chase” model is not a winning proposition for healthcare insurance companies. For example, healthcare industry fraud accounts for between 3% and 10% of total healthcare expenditures, or $60 to $120 billion per year. FICO IFM 3 leverages a predictive analytics model – in contrast to rules-based systems that power most insurance industry fraud detection systems today – to identify aberrant data patterns indicating fraud earlier in the claims payment process and provide proof of fraud before payment is required by law.
“The risk of healthcare fraud rises in a weak economy as more people become tempted to try and cheat the system,” said Russ Schreiber, vice president at 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 US, leveraged an earlier version of FICO IFM to automate and improve fraud and abuse detection. 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. Today, Highmark is alerted to more potential and higher value fraud than it was with its previous systems and procedures.
”IFM not only helps detect outright fraud, it helps combat abuse and waste, the gray area of insurance claims where it can be hard to prove that the provider had the intention to swindle,” said Tom Brennan, Highmark's director of special investigations. “In one instance, our provider claims review folks identified a problem with an anesthesia group, looked corporate-wide, and found 12 other groups doing the same thing. The refunds are now in excess of $3 million with additional funds anticipated.”
“Early detection is the key to mitigating fraud losses for health care insurers,” said Joanne Galimi, research vice president at Gartner, Inc. “This has led to growing interest in new prospective fraud detection methods based on predictive analytics. As insurers continue to shift their focus from traditional back-end solutions to front-end detection and prevention, fraud solutions that feature predictive analytics with real-time detection capabilities will be viewed as more than nice-to-have – they will become a requirement.”
FICO (NYSE:FICO) transforms business by making every decision count. FICO’s Decision Management solutions combine trusted advice, world-class analytics and innovative applications to give organizations the power to automate, improve and connect decisions across their business. Clients in 80 countries work with FICO to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through the www.myFICO.com website. Learn more about FICO at www.fico.com.
FICO Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2008, and its quarterly report on Form 10-Q for the period ended June 30, 2009. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
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