IBM aims for paperless health insurance claims

NEW YORK: International Business Machines Corp. is rolling out a program to

automate the health insurance claims, claiming it can save administrative costs,

the company said on Thursday.

The first insurer using the claims processing service is Empire Blue Cross

and Blue Shield with 4.7 million subscribers, said IBM, which is aiming to offer

the benefits of Internet technology to lower costs for health-care firms.

If widely adopted by health-care insurance carriers the service could save at

estimated 35 per cent to 40 per cent of the $250 billion or more annually spent

pushing paper, IBM said. "If you look at health care today, costs are

dramatically increasing. Yet a huge part of that cost is processing paper on the

administrative side," said Dr. Russell Ricci, general manager of IBM Global

Healthcare.

Ricci said automation of health-care claims can cut the cost per claim from

the $16-$40 range to pennies. Older computer systems that health insurers use is

a large part of that cost since many cannot manage paperless claims or cannot

work with other computer networks used by hospitals.

Ricci said IBM will be targeting the services to Blue Cross/Blue Shield,

mid-market, smaller self-insured plans and the government health programs that

do not want to commit the capital to large technology investments. "The

system is designed to have the 'scalability' to do government work," Ricci

said. Many of the Blue Cross/Blue Shield plans manage processing of government

claims.

Many of the largest health-care plans, such as Humana Inc. and UnitedHealth

Group, have made their own information technology investments to automate claims

and change the way the plans are sold.

IBM would operate the computer network for the new service and charge

insurers based on each claim submitted. The service will use application

software from deNovis Inc., a Lexington, Massachusetts-based company aimed at

health-care payers.

The deNovis software has the ability to electronically read policy

statements, rules and regulations and make appropriate payments automatically,

IBM said. This ability enables carriers to offer customized health plans for

each family member and offer customer service online.

IBM has entered other partnerships to build a larger presence in health care.

The company announced an arrangement to provide information technology for

hospitals with Cerner Corp., a health-care systems software maker.

Pfizer Inc., the world's largest drugmaker, and Microsoft Corp. formed a

joint venture called Amicore to create systems to make doctors' offices

paperless. The venture developed software to automate the administrative and

clinical functions of a medical practice and connect the office to payers, labs,

pharmacies and other health care providers.