Washington L&I Selects Fair Isaac's VeriComp Fraud Manager for Detection of High-Risk Workers' Compensation Claims
VeriComp Fraud Manager scores claims on the likelihood of fraud and abuse. The software helps organizations fast-track normal claims while identifying claims that are out of profile compared to their peers. This rank-ordering helps adjusters focus their attention on suspicious claims with minimum effort, lowering costs and enhancing efficiency.
"Early discovery of workers' compensation fraud and abuse, combined with the ability to identify claims in need of additional case management, is very important to us," said Bob Malooly, assistant director of insurance services for the Washington Department of Labor and Industries. "VeriComp Fraud Manager will help us do this, while helping to keep the cost of workers' compensation claims as low as possible. We're excited to work with Fair Isaac and put their advanced technology to use to help improve the workers' compensation system in Washington state."
As one of the nation's 10 largest workers' compensation insurers, the Department of Labor and Industries provides workers' compensation insurance coverage to about 70 percent of Washington's workers.
In addition to rapidly identifying fraudulent and abusive claims, VeriComp Fraud Manager can discover cases with high cost or long duration potential, enabling adjusters to apply more aggressive case management and medical intervention earlier in the life of the claim. Using Fair Isaac's advanced predictive analytics, VeriComp Fraud Manager can recognize subtle patterns of abuse that even the most experienced adjuster might miss.
The VeriComp Fraud Manager solution delivered to L&I utilizes the Fair Isaac Industry Alliance consortium model. The Fair Isaac Industry Alliance is the first offering of its kind for the workers' compensation industry, using the predictive power of data pooled from numerous contributors to provide a more complete approach to detecting fraud and abuse.
"Quickly identifying the right action to take on workers' compensation claims is critical for the Washington State Department of Labor and Industries," said James Kalustian, vice president, Healthcare & Pharmaceuticals at Fair Isaac. "VeriComp Fraud Manager can help L&I improve claims management by detecting workers' compensation fraud and abuse earlier, by discovering new fraud incrementally, and by offering L&I a sophisticated way of identifying injured workers who need more aggressive case management. Increasingly, Fair Isaac analytics are improving productivity and cost savings for insurers across the country."
Nationally, it is estimated that fraud and abuse account for at least 10 percent of the cost of workers' compensation premiums. The vast majority of workers' compensation fraud goes undetected, and if fraud is caught at all, it is usually late in the life of the claim. According to the National Insurance Crime Bureau (NICB), workers' compensation fraud costs Americans over $5 billion nationally.
VeriComp Fraud Manager is already helping the Washington Department of Labor and Industries further improve its tradition of effective fraud detection. Early tests indicate that VeriComp Fraud Manager identifies well over half of the fraudulent claims months before they are discovered by adjusters, and discovers suspicious claims that would otherwise have been missed. On average, Fair Isaac customers have typically saved several hundred dollars per claim, based on improved detection of fraud and abuse. Additionally, the benefit from improved claims management yields significant value.
Fair Isaac software products and services process more than $4.4 billion annually in property and casualty claims. They are in use in the operations of nine of the top 10 property/casualty carriers and over 50 percent of the nation's state workers' compensation funds. In 2004, Fair Isaac saved its customers more than $3.3 billion in claims costs.
About Fair Isaac
Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company's predictive modeling, decision analysis, intelligence management, decision management systems and consulting services power billions of mission-critical customer decisions a year. Founded in 1956, Fair Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce fraud and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair Isaac solutions, as do insurers, retailers, telecommunications providers, healthcare organizations and government agencies. Through the www.myFICO.com web site, consumers use the company's FICO® scores, the standard measure of credit risk, to manage their financial health.
About the Washington State Department of Labor and Industries
L&I is a diverse state agency primarily focused on protecting the safety and welfare of Washington's nearly three million workers. L&I fosters on-the-job safety and health through its (WISHA) inspection and enforcement program and through voluntary consultations and training. L&I also administers the state's mandatory workers' compensation system, which provides medical, wage-replacement, pension and retraining benefits to those who are hurt or become ill as a result of their work. The system also protects employers from the high cost of long-term injury claims, and from liability lawsuits that could otherwise result from workplace injuries. L&I licenses contractors, inspects electrical work and elevators and protects workers from illegal employment practices. It also helps develop the state's skilled workforce through apprenticeship programs.
Fair Isaac Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this press release that relate to Fair Isaac, including statements regarding its VeriComp Fraud Manager product offering and the benefits to be derived from this offering, 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 any unforeseen technical difficulties related to the implementation, use and functionality of the offering, the risks that customers will not perceive material benefits from the offering, failure of the product to deliver the expected results, the possibility of errors or defects in the offering, regulatory changes applicable to the use of consumer credit and other data, and other risks described from time to time in Fair Isaac's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2004, and quarterly report on Form 10-Q for the period ended June 30, 2005. Forward-looking statements should be considered with caution. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Fair Isaac's results could differ materially from Fair Isaac's expectations in these statements. Fair Isaac disclaims any intent or obligation to update these forward-looking statements.
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