Medical Device Daily Associate

TC3 Health (Costa Mesa, California), a developer of loss control and integration technologies, reported the market release of OFACsecure, a compliance tool for healthcare payers designed to meet the federal guidelines under the USA Patriot Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism).

The Treasury Department's Office of Foreign Asset Control (OFAC) has been designated to administer, publish and enforce the master list of Specially Designated Nationals and Blocked Persons (SDNs) that prohibits U.S. underwriters, brokers, agents, primary insurers, reinsurers and U.S. citizen employees of foreign firms in the insurance industry of making or receiving or any contribution of funds, goods or services for the benefit of persons designated as SDNs.

Payers are required to screen provider and member data against the SDN master list and to notify OFAC of a match or block the assets. OFACsecure is an automated screening tool that utilizes TC3's technology and alerts the compliance office of potential regulatory requirements. OFAC regulations are promulgated under federal law and Presidential Declarations and thereby preempt state insurance regulations.

Founded in 2000, TC3 (for Total Claims Capture & Control) is designed to provide healthcare payers with a claims management solution that seamlessly and electronically integrates claim transaction systems with external loss control programs. According to Ed Day, executive vice president of corporate development, the company targets the estimated $250 billion in healthcare claims overpayments to validate payment integrity and maximize savings for healthcare payers.

"We basically go in and reduce [our clients'] paid medical claims on average from 5% to 10%," he told Medical Device Daily, adding that the company only gets paid "when we find newfound money for them."

Historically, Day said the health insurance industry has operated on what is known as retrospective recovery, essentially trying to collect on overpayments after checks already have been mailed to providers. He said that method generally nets about 10 cents on the dollar.

In contrast, TC3 inspects a client's payment claims on a daily basis before checks are generated. "That's how we are able to bill on a contingency basis, because this was money that was about to go out the door," Day said. "We run it through our applications and that's how we are able to identify those savings."

This review of pre-payments, he said, "dramatically" changes the financial equation for the payers, allowing them to collect an average of 500% more than they did via the retrospective approach. Payers can collect an average of 54 cents on the dollar with the pre-payment approach vs. the traditional post-payment model, according to the company.

TC3 enables payers to take advantage of state-of-the-art loss control technologies through a single connectivity source to prevent claims errors on a pre-payment basis, while reducing paid claims by 5% to 10% annually.

Day said the OFACsecure compliance tool is somewhat of an extension of the company's fraud-and-abuse suite of products "but now we're adding a compliance tool instead of a fraud and abuse prevention tool to it."

He said that this new tool is a godsend for the insurance industry, which he said was caught somewhat off guard by the scope of the compliance obligations required under the Patriot Act.

If an insurer is found not in compliance with these new rules, it can face stiff fines and some company officers also could face jail time for more egregious violations.

For these reasons, Day said he believes this new tool will find instant favor with TC3's customers who would otherwise have to consult the SDN list which is updated on a quarterly basis any time they want to make a payment or issue a policy.

"I'm going to venture to say that probably 80% to 90% of our clients will take advantage of this service," he said, noting that the company has already built the interface for the new tool into its clients' claim transaction engine.

Initially, the company said it will waive the first-year subscription fee for the OFACsecure tool for its existing customers, with the belief that they will want to continue the service after that trial period, particularly since, according to Day, the Treasury Department is expected to intensify its enforcement this year of compliance of Patriot Act protocols that fall under its jurisdiction, including the SDN list.

Day said that his company offers a complete suite of loss-control services. "In terms of the comprehensive scope of services that we have, we are fairly unique and an early entrant in this marketplace."

He added that when one looks at all the services the company provides, "not only are we in the business of newfound money, but we're really in the business of managing process risk within these organizations."

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