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HMS Holdings Corp agrees to buy Allied Management for $26.2M – Algorithm and Transaction Income for Medical Billing Fraud

Posted Jul 02 2010 1:57pm

Here’s more in the Health IT business, more on the side that you may or may not be aware of.  There will be more of these to follow I am sure as there’s tons of image millions of dollars made in medical billing.  As billing and coding became more complex, so did the data systems and the ones who create fraud.  This is somewhat nice to know there’s an alternative here to reviewing claims with a company that is not owned by an insurance company for one.

When you hear of 3rd party auditing companies used by insurers and others, these are the types of companies that have grown over the years, and again have made millions with software and algorithms.  You can also see a big portion of their markets are selling algorithmic processes to HMOs and employers, a big focus there.  Allied Management speaks of over 100 parameterized reports (from the algorithms) they can produce for clients. 

HMS serves Medicare and Medicaid contractors, so again when you think of medical billing there may be a multitude of 3rd parties to where your claim travels before it is given the ok from your insurance company to pay.  This is big business and revenue is transactional, in other words for each claim audited, scored, evaluated for fraud, they make money.  Now if we could cut the cost that we all pay for healthcare in this area, we could all save money. image

These folks too have to work and deal with the often confusing, complex algorithms of the insurance companies, but the big difference here is that they get paid millions for doing so.  We focus all our time on the electronic medical records side with certification while the algorithms run and make millions for others, thus we should look at certifying the other side of the fence you think?  It would sure stand to take one huge bite out of what we pay for healthcare.

Nobody wants to fully streamline taking a huge chunk out of what we pay as there are too many software/algorithmic institutions make millions from it and thus we continue to pay and face limits set forth so as not to disturb the profit pools that are bought and traded on Wall Street.  The algorithms make millionaires and can take away from others and we are seeing more and more of this with profits from transactions where a study, report or an actual need creates huge expenses with healthcare as it is today.  BD 

From the websites:

“HMS Holdings Corp. (NASDAQ: HMSY) operates through its subsidiaries including Health Management Systems, Inc. (HMS), IntegriGuard LLC, and Reimbursement Services Group, Inc. (RSG). It is is the nation's leader in cost containment, program integrity, and coordination of benefits solutions for government-funded and commercial healthcare entities. Focused exclusively on the healthcare industry since our founding, HMS Holdings Corp. helps its clients ensure that healthcare claims are paid correctly and by the responsible party, and that those enrolled to receive program benefits meet qualifying criteria”. image

“AMG created AMG-SIU to offer health care companies a fraud, waste and abuse prevention program that works.

Established in 1972 as a health care consulting company, Allied Management Group (AMG) provides management, organizational and auditing services to all Payers including: Insurance carriers, MCOs, HMOs and government organizations of all sizes. Through the urging of its clients, the SIU division was initiated to provide an affordable fraud, waste and abuse prevention program that fulfilled and exceeded  government requirements”

HMS Holdings Corp., which provides cost-recovery services to government health care programs, said Friday it will buy Allied Management Group in a deal valued at up to $26.2 million. 

Allied Management provides auditing and consulting services to health care payors to help them find fraud and prevent, waste, and abuse. Its services include a forensic claim editing system that it uses to analyze data for fraud, waste, and abuse. Its system allows investigators to compare providers, review histories, and identify unusual results, the company said. HMS said Allied Management also has its own special investigation unit.

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