By Travis Balinas
A Wisconsin-based company will soon be revealing its software suite to assist healthcare professionals and systems increase the accuracy of claim payments, before and after they’re due.
De Pere-based Aver Informatics Inc. was formed earlier this year and is creating the first competitive audit market to connect payers with claim payment and fraud issues to a broad network of problem solvers.
Thanks to the combined expertise of Kurt Brenkus, former CIO for a claims auditing organization, and the software architect, Matthew Frohliger, Aver Informatics Inc. will soon release an audit platform designed to increase incorrect claim finding by 300 percent.
“It’s come a long way in a very short amount of time,” Brenkus said. “Our software will empower analysts to play with millions of claims in real-time … it’s very user friendly.”
Aver’s market analysis has revealed that 5 percent of commercial health care claims valued at $26 billion are paid incorrectly. On top of that, 3 percent is lost to fraud each year – or $68 billion.
On the public side, Medicare struggles with an improper payment rate of 12.4 percent annually, and Medicaid sustains a rate of 9.6 percent. These improper payments are valued at $35.4 billion and $18.1 billion, respectively.
According to Aver executives, existing audit tools only allow for review of claim payment after the fact. Audit companies that analyze claim data charge up to 40 percent of the recovered findings. To top it all off, these findings don’t share meaningful data about why a claim was wrongly paid in the first place.
Once the development and release of the company’s audit platform is complete, Aver executives expect the software will add value to the claim auditing sector in three ways:
* Payers deploy a centralized post-payment collaborative audit tool, resulting in full transparency into why claims paid incorrectly; * Payers gain access to a broad centralized competitive audit network, and; * Payers implement a pre-payment strategy where incoming claim data is scored based on probabilistic algorithms for likelihood of accuracy stopping the problem upstream, long before the claim is paid.
Aver’s software is approaching this market niche with the claim it will increase accuracy three-fold, which stands to have an enormous effect on improper health claim payments totaling $139 billion annually.
Right now, Aver is concentrating on getting the company’s core software suite firmly planted.
“We don’t want to get lost in millions of features right away,” Brenkus said.
Looking ahead, Aver will look to add pre-payment analytics as well as more in-depth analytical features like claim life-cycle management tools.
Aver has identified that the best entry point into the health care market is through the claim payer. Currently, the duo is negotiating pilot programs with National Government Services (with 23.1 million members) and Anthem of California (with 8 million members). In addition to these two industry connections, Aver is also directing sales focus towards third-party administrators, self-insured groups and managed care services.
Aver will be attending and presenting at the 2010 Wisconsin Early Stage Symposium in Madison this week. Held annually, the symposium helps entrepreneurs learn how to pursue private equity and prepares them for regional and national venture conferences. In addition, it is an opportunity for start-up companies to be “coached” by venture and service professionals.
Roger Orlady, a consultant and CPA, was part of a Wisconsin Entrepreneurs’ Network exercise designed to critique start-up companies on presenting to investors. “Out of the groups we watched that day, Kurt was the most prepared out of all of them,” Orlady said. “Kurt is well experienced in the market which helps a lot… and it’s certainly an area with significant opportunity.”
— Balinas is a graduate student in the Department of Life Sciences Communication at UW-Madison.