Background
As with any industry, the competitive landscape for third-party administrators is always subject to change. A potentially significant challenge for TPAs is the growing importance that self-funded entities place on identifying and denying the significant number of fraudulent, abusive and wasteful claims generated by PPO providers. The benefits to TPA clients are clear: Identifying and denying unnecessary overpayments helps control health-plan expenses while maximizing the plan’s value to members.

One company that exemplifies the increased focus on fraud, abuse and waste (FAW) is SynerMed, a Los Angeles-based technology and services provider for healthcare organizations. SynerMed has deployed a wide range of automated systems to serve its clients, which include union employer groups with self-funded benefits plans.

Situation
While SynerMed focused relentlessly on helping its clients control costs, it recognized that there are certain categories of improper billing that manual claims processing simply can’t recognize. SynerMed turned to PCG Software to help the company auto-adjudicate claims for discrepancies as well as for certain codes that are a medical impossibility, which can be denied 100 percent of the time.

Solution
SynerMed implemented Virtual Examiner FAW-detection software in 2003 for its non-TPA business lines and began using it for its self-funded clients in 2006. When a claim hits one of the internal edits in the system, Virtual Examiner is notified of the discrepancy and can deny the claim.

SynerMed then uses the data to help providers correct their billing practices, and if the providers do not rectify the issues, SynerMed can use the evidence it gathers in the system to validate removing the provider from the network.