If you are not familiar with SAS, they are one of the largest software companies in the world. Blue Cross Blue Shield uses their algorithmic formulas to project and forecast. The algorithms create the lists to identify and determine the severity classification for those insured. The algos use diagnosis 
and procedures codes that are all entered with medical billing, as well as prescriptions, labs and other information.
In short through the use of extensive calculating algorithms, business models are created, adjusted, etc. as needed. The formulas also work to help avoid fraud. Again, I still say when we certify all the EMR system algorithms, there should be something said for those used by the insurers to make sure everything is being calculated correctly, especially in the area of fraud detection with setting the “scoring” on claims, as mentioned below “rule based algorithms” are making the decision here, and once more we could use some algorithmic centric laws in Congress to perhaps emulate some of this technology so we all know where we stand and how to read the laws we create. BD
From the website:
“Data Acquisition and Management
Medical and pharmaceutical claims are the core information source for most disease management activities. However, claims records are designed to facilitate billing – not to provide a complete representation of population health characteristics. The SAS solution supplements claims data with data on membership and provider eligibility, pharmaceutical records, in-patient and out-patient billing, dental and vision billing, lab results and medical assessment questionnaires. The result is a more complete picture based on a variety of data sources.
Identification and Severity Classification
The SAS solution uses a variety of methods for identifying patients and assigning a severity classification, including:
- Pre-designated lists (as determined by medical evaluations and diagnoses or hospital discharge data).
- Rules-based algorithms based on diagnosis or procedure codes, pharmacy scripts, lab results and medical assessment questionnaires.
- Advanced analytical methods, such as data mining.”
Blue Cross and Blue Shield insurers overwhelmingly seek benefits of the SAS Business Analytics Framework
CARY, NC (Nov. 09, 2009) – With the entire US health care system under the microscope of reform efforts, key parts of such change firmly depend upon health insurers controlling costs, improving health care outcomes and maximizing member satisfaction.
Nearly all of the Blue Cross and Blue Shield licensees use SAS® Business Analytics to drive those measures.
Of the 39 companies within the oldest and largest family of health plans, all but four have deployed SAS software. One in three Americans -- more than 100 million residents -- counts on a Blue Cross and Blue Shield company for health coverage. And most BCBS insurers count on SAS, the leader in business analytics.
Among the health care insurance companies that drive their businesses with SAS business intelligence, data integration, analytics and solutions are BCBS companies in Florida, Nebraska, California, Minnesota, Pennsylvania, Massachusetts, North Carolina, New York and others.
"With increasing pressure from health care reform for health insurers to cut costs and invest in modern technology architecture, technologies such as advanced analytics are increasingly a key element in cost control,” said Kunal Pandya, Senior Analyst, Health Insurance Practice at Aite Group, an independent business technology research firm. “For health care insurers, such technologies can greatly assist with detecting fraud, proactively managing risk driven by preventative interactions and other areas that make the system more efficient and effective."
Serving 3.6 million members, Horizon Blue Cross Blue Shield of New Jersey is like many heath plans whose members are asking for increasingly complex and sophisticated information to control costs through care management programs. The increased demand for reports and automated dashboards was becoming a heavy burden for Horizon until it deployed SAS Enterprise BI Server.
About SAS
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know® .
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