SECURITY

Rolls-Royce, ASU Partnership to Combat Billions in Health Insurance Fraud

Alison Diana | Date: 01-04-12 | Comments

Alaris has developed biometric signature-verification that uses sound waves for authentication.

The allure of health care insurers� seeming deep pockets is creating a wave of fraudulent claims, ranging from unsophisticated one-off attempts to organized crime rings. But new technologies are helping health care providers, consumers, insurers and government agencies to fight back against this expensive crime.

The United States loses at least 3 percent�or $68 billion�of the more than $2 trillion spent on health care annually, the Coalition Against Insurance Fraud reported in 2010. Today, 10 cents of every dollar consumers spend on health care goes toward paying for fraudulent health care claims, according to the Legal Information Institute at Cornell University Law School.

Alaris demonstrates its unique listening technology for signature verification.

In January 2011, Los Angeles law enforcement arrested almost two dozen people for allegedly running a $1 million health care insurance fraud ring, according to the Los Angeles Times. A two-year investigation uncovered a scheme whereby the owner of two local health care centers allegedly made up false medical reports for non-existent patients or for people who never actually received treatment, the paper said. A few months later, 14 people in Mississippi were arrested in connection with an insurance fraud investigation involving the State and School Employees Health Insurance Plan, reported WJTV. No region is immune: A quick online search finds similar news stories from Florida to New York, Virginia to Texas.

Their criminal methods may differ, but ultimately their victims are consumers who pay for the theft. In fact, health care insurance fraud costs families almost $950 per year in extra expenses, the Coalition Against Insurance Fraud estimates.

To help combat this crime, an unusual alliance resulted in a security startup called Alaris. Alaris is a joint venture between Rolls-Royce�perhaps best-known for its classic automobiles�and Arizona State University. It was created to commercialize a signature-verification technology that Rolls-Royce developed to run quality tests on jet engine blades. By firing a sound impulse into a blade and analyzing the resulting wave patterns, engineers knew if any structural faults or anomalies were present.

Through Alaris, that technology, called SignHear, is now designed for fraud- or security-intensive markets such as health care, retail banking and child care. SignHear dynamic signature verification is a biometric technology that verifies identity by analyzing the unique sound patterns created by an individual�s written signature. A patented algorithm captures and analyzes these sounds, and generates an acoustic signature template unique to each user.

�SignHear technology affords health care with a game-changing strategy to fight fraud, shifting the industry�s current defensive approach to the offensive,� said Jeremy Kelstrom, CEO of Alaris.

For example, patients could use SignHear acoustic signature pads at the point of health care service, preventing fraud before any medical services are rendered or submitted to insurers. Consumers are aware of the all-too familiar process of multiple signatures typically required at healthcare providers for both clinical procedures and financial obligations. Other biometric methods of authentication�such as eyeball scanning�have been costly or uncomfortable for providers or patients to adopt.

There are many other uses for the technology, Alaris said. Some of the Boys & Girls Clubs in Scottsdale, Ariz., for example, use SignHear to keep close track of attendance at its after-school facilities and summer camps. In addition to monitoring who has signed a child in or out of the facility, the system tracks volunteers� hours to ensure they receive full credit and recognition.