With new leadership installed since October, including a new CEO and board member, Alivia Analytics is fighting payments fraud in the healthcare sector.
Alivia Analytics is building out expansion plans for its business battling payments fraud in the healthcare sector after obtaining new capital and leadership in recent months.
In conjunction with receiving an investment from two private equity firms last October, the Woburn, Massachusetts-based payment-integrity vendor appointed Michael Taylor as its CEO at that time, and this month tapped Bill Lucia, the former CEO of healthcare analytics technology company HMS Holdings, to serve on its board of directors.
Lucia’s appointment fits for Alivia because HMS is a healthcare analytics and technology company that does what Alivia does, recover fraudulent payments for state and federal health care programs and health insurers. Alivia also appointed Steve Goldberg as chief medical officer in April, adding his experience as the former chief health officer of employee and population health at clinical lab company Quest Diagnostics.
In an interview this month, Taylor noted payment fraud and waste in the U.S. healthcare system at potentially more than $900 billion annually, citing research published in 2019 in the Journal of the American Medical Association.
For its customers, Alivia’s 20 employees use data analytics, machine learning and artificial intelligence to identify fraud and waste.
Early in his career, Taylor was a family physician, and later he worked in venture capital for Health Enterprise Partners, and as a medical director for health insurers Aetna and Optum, a division of UnitedHealth Group. In addition to his executive role at Alivia, Taylor also is the executive chairman of Kermit, a company in Hunt Valley, Maryland, that provides data to physicians and hospitals on implantable medical devices.
In October, Alivia named Taylor its CEO in conjunction with announcing that it had received a capital investment from two private equity firms with which Taylor worked to identify a target for the investment. The private equity firms were New York-based Health Enterprise Partners and Nashville-based Council Capital. A spokesperson for Alivia declined to disclose the amount invested.
Alivia’s clients include health insurers, state Medicaid agencies and fraud investigators who use Alivia’s systems to detect fraud. Other customers are third-party administrators that process healthcare claims for employers providing health insurance to workers and families, Taylor said.
“Our business is probably split about a third each among our business partners, such as fraud investigators who use our platform; government agencies; and commercial health insurance companies,” Taylor estimated.
Health insurers and the Medicare and Medicaid agencies find that fraud most often results from high-cost and complex medical and genetics tests and from therapies that have ill-defined criteria for coverage, Taylor explained. “Once we see that, we can almost predict where the next area of controversy will be,” he added.
One problem such payment integrity vendors face is a reputation among some physicians, hospitals and other healthcare providers as being overly aggressive in pursuing cases of fraud and rigid in how they interpret regulations and handle providers’ appeals, said Jordan Keville, a partner in the law firm of Davis Wright Tremaine in Los Angeles.
Many of Keville’s clients are physicians, hospitals and other providers serving Medicare and Medicaid members facing allegations of fraud.
For his clients, payment integrity companies are a significant problem because they tend to interpret payment regulations in ways that he considers unfair to providers, and they tend to be inflexible when presented with evidence supporting the legality of clients’ billing practices, Keville said in an interview this month. “Almost always, I’ve found some serious substantive flaws with the analysis from integrity contractors,” he added.
Once they have evidence of fraud, government agencies such as Medicare and Medicaid can stop paying providers even while providers appeal the allegations, Keville said. Such appeals can take as long as two years before a case gets before an administrative law judge, he said.
While appeals are pending, the loss of income can force providers to close. A hospice provider that Keville represented had no income as a result of a fraud allegation. When the hospice provider had no funds to challenge the fraud allegation, it was forced to shut down, he said.
Taylor agreed that not all payment integrity companies produce accurate results when auditing providers’ payments. “Unfortunately, just as not all providers adhere to the same standards of billing accuracy, not all payment-integrity companies use the sophisticated and accurate approaches that we use here at Alivia,” he said. “Other companies have less accuracy and more variability in their audits, which often results in provider disagreements and appeals.”
