CATEGORY: Data Mining & Visualization
REVIEWER: Eduardo Polanco, CIO for Isapre Cruz Blanca.
BACKGROUND: Isapre Cruz Blanca is the second-largest private healthcare insurance provider in Chile, serving over 500,000 citizens. Based in Santiago, we have been in business for more than 15 years with annual revenues of approximately $300 million (U.S.) per year.
PLATFORMS: Cruz Blanca's processing is spread across Sun Solaris and Windows NT servers, with access from over 1,300 client PCs running Windows. Corporate information is managed using the Sybase RDBMS, and a TCP/IP network connects 120 offices.
PROBLEM SOLVED: Against revenue of $300 million, Cruz Blanca pays out over $240 million in insurance claims each year. Insurance is a highly regulated industry in Chile, and certain regulations create openings for fraudulent medical claims to be submitted and paid. Our goal was to dramatically reduce fraudulent disability claims to control costs and increase profitability. We hoped that by mining our historical claims data to understand the characteristics of fraudulent submissions, we could detect many fraudulent license claims before approval. Using data from thousands of past claims, some of which were known to be fraudulent, Cruz Blanca used CA's CleverPath Predictive Analysis Server (which includes technologies formerly available as Neugents) to create a "Licenses Neugent" to detect new license claims that matched known fraudulent patterns. Using CleverPath Portal visualization services, these suspicious claims were then presented to the audit group for closer examination. Also, the Licenses Neugent identified new types of claims that looked unusual. While not matching previous fraudulent patterns, these new claims had other patterns that made them stand out. In many cases, these unusual claims revealed new types of fraud. Thus, the Licenses Neugent became a self-learning system. Since implementing the Licenses Neugent in January 2001, we have reduced our disability claims costs by nearly four percent, equating to millions of dollars per year.
PRODUCT FUNCTIONALITY: CleverPath Predictive Analysis Server incorporates U.S. patented neural network technology to rapidly analyze and extract critical business knowledge from data, creating knowledge that can reveal significant factors and help an enterprise achieve key business results. Leveraging this new knowledge to identify problems and predict future outcomes, CleverPath Predictive Analysis Server delivers real- time monitoring, detection and predictions that enable you to increase potential and control costs at key points in the value chain. CleverPath Portal adds a new dimension to decision making by condensing business information into a visual reality that is intuitive and attractive.
STRENGTHS: CleverPath Predictive Analysis Server delivers real- time predictive intelligence by recognizing complex patterns in corporate data. In addition, it provides real-time detection of unusual patterns and adapts this new knowledge to create a self- learning system.
WEAKNESSES: At the beginning, the Licenses Neugent didn't shed much light as to how the fraud was committed or what it involved. However, under the new release, we are getting much better information.
SELECTION CRITERIA: As a leading insurance provider, we were looking to offer better services with lower costs. CA's CleverPath Predictive Analysis Server and CleverPath Portal presented the opportunity to leverage advanced technology to achieve our goals. The combination of proven product capabilities with CA's extensive support and services experience was the key to product selection for us.
DELIVERABLES: We have been very pleased at the results of our "Licenses Neugent" project. We are accomplishing a much higher rate of disabilities fraud prevention and have reduced costs by an average of four percent of the amount spent on each policyholder. We expect to save approximately $2 to $3 million dollars per year.
VENDOR SUPPORT: Many CA organizations supported us during this project from research and development to CA's Field Services Group to CA Services. CA Services built the first Neugent model using CleverPath Predictive Analysis Server while at the same time teaching us how to implement this technology. Thanks to CA's training, we have built two additional Neugents models for other types of fraud detection and prevention.
DOCUMENTATION: CleverPath Predictive Analysis Server includes a Getting Started Guide, wizards for the development and training process, online help and other reference documents. However, we found the product easy to use and rarely needed to consult the extensive documentation.
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