NHCAA CONFERENCE Installing Predictive Modeling Claims Scoring Technology November 18, 2010

1. NHCAA CONFERENCEInstalling Predictive Modeling Claims Scoring TechnologyNovember 18, 2010

2. Welcome to Highmark • Primary Offices in Pittsburgh & Camp Hill along with satellite offices throughout the USA • 18,500 Employees • 4.6 Million Health Care Members • 28 Million Members Across all Products • 2008 Revenues: $12 Billion

3. Strategic Initiative toCombat Health Care Fraud • Three Phase Approach • Enhance query capabilities of existing claims history repositories. • Purchase a provider scoring model which allows for automated detection of aberrant provider behavior. • Purchase an automated claims scoring model which scores suspicious claims prior to payment.

4. Tools Data People Recovered or Tools Tools Tools Tools Data Data Data Data Averted Costs People People People People Tools Data Tools Tools Data Data People People People Fraud Detection and Investigation Process Flow Rule Based Detection Phase I Evaluation / Financial Predictive Prioritization Recovery Modeling Investigation Phase II Provider Scoring Model Referrals Payment Provider Claims Prevention Review Phase III - Predictive Modeling Claims Scoring Model

5. Implementing Pre-Payment Claims Scoring Technology Critical Success Factors: • Efficient data transmission of claims (post adjudication but prior to physical payment). • Building an effective evaluation team: • Appropriate skill sets • New job rating/job class • Job performance measurements • Establish effective workflow processes between evaluation team and existing departments • Fraud cases • Abuse cases • Policy changes • System changes • Define and implement an effective value realization/ROI process

6. PROJECT ORGANIZATION Executive Sponsor Business Owner Steering Committee Business Owner Program Manager Project Manager Claims Processing VP Evaluation Team Manager Program Manager Information Services Group Project Manager Governance Team Audit VP Program Manager Evaluation Team Manager Information Services Group Team Pre Payment Team Evaluation Team Information Services Group Resources only needed until data extracts are in place

7. IMPLEMENATION TIMELINE

8. Pre-payment process flow

9. Value Realization Term Definition Included in calculation of identified savings

10. Case Summary

11. Pre Pay Case Trending

12. Pre Pay Claim Trending

13. Net ROI per month:Identified savings divided by monthly operational costs

14. Hit Rate

15. Case hit rate:Claims reviewed divided by cases created

16. Deny Button Hit Rate:Claims reviewed divided by claims denied

17. Productivity Graph

18. Opened case value by monthly operating costs (MOC) CONCLUSION: The identified savings of approximately 22% (18 of 83) of cases opened exceed the operational costs for an entire month.