Ingenix purchases claims-processing company

Ingenix, the part of UnitedHealth Group that has attracted the ire of public officials and lawsuits from physicians, has bought a firm it hopes will help heal a long-broken part of the current claims system.

Ingenix announced June 1 it had bought AIM Healthcare Services, based in Franklin, Tenn., for an undisclosed amount.

Ingenix Chief Executive Officer Andy Slavitt said the purchase is part of the company's goal to reduce administrative inefficiencies in the health care system.

"This is the non-sexy side of the health care business," Slavitt said. "But without reforming it we are going to be in a system where the health care industry can't support itself."

AIM Health Care Services' signature product, called Intellijet, is an automated system that detects errors or omissions in pending claims and then communicates the problem to both the hospital that submitted the claim and the health plan to which it was submitted.

Rather than rejecting a claim and producing a paper letter to a hospital about the claim, Intellijet allows both the hospital and health plan to go online to see what might be wrong with a claim, then fix it on the spot, paving the way for quicker payment.

Under the current system, the hospital and health plan might send several letters back and forth, and the health plan might even pay the wrong amount and have to correct that error, Slavitt said. That back and forth is part of the administrative inefficiency that The Lewin Group, a UnitedHealth Group-owned consulting firm, estimates costs $150 billion annually.

In its first National Health Insurer Report Card, issued last year, the American Medical Association estimated that as much as 14% of physicians' total revenue is spent submitting and handling claims. Last year the AMA launched its "Heal the Claims Process" campaign to call attention to problem of ineffective claims processing and offer recommendations for health plans to improve payment accuracy and turnaround time.

Currently the Intellijet system is only used for hospital claims, but Slavitt said Ingenix plans to roll it out to physicians soon.

"I wouldn't say we have a current road map for doing that, but I think that's going to happen quickly," he said, "There's a mandate to move quickly."

Ingenix' payment rate database, used industrywide to set out-of-network pay rates, has been the subject of a series of investigations and lawsuits, mostly stemming from the office of New York Attorney General Andrew Cuomo. Ingenix parent company United has agreed to abandon that database and help pay for a new database that will be publicly available.

Several lawsuits are still pending, but United agreed in January to settle one brought in 2000 by the Litigation Center of the American Medical Association and State Medical Societies and state societies in New York and Missouri. The proposed $350 million agreement has yet to be approved in court.