IBM Reaches 10-Year Agreement to Process Health Insurance Claims for Empire Blue Cross
IBM Corp. yesterday announced a 10-year agreement to process health insurance claims for New York-based Empire Blue Cross and Blue Shield, one of the nation's largest Blue Cross companies, the Wall Street Journal reports. According to sources familiar with the agreement, Empire will pay IBM more than $1 billion for the contract, although payments will "depend in part on the number of claims processed and individuals covered." Empire has 4.7 million health plan members, the Journal reports. IBM, which hopes to become a "big health claims processing service," said that the agreement will "slash the cost of processing claims by almost half." Health insurers nationwide spend about $250 billion per year on the practice, IBM said. IBM will use a new software program developed by deNovis Inc., a Massachusetts software company, to manage the claims process for Empire. IBM will take over Empire's data center in New York, and over the next 18 months, the two companies will transfer the functions of 22 million lines of Empire software to the deNovis software. After the transfer, IBM will begin to process Empire's claims at a company data center, and IBM will "try to sign up other customers" (Bulkeley, Wall Street Journal, 6/13). For more iHealth & Technology stories, visit iHealthBeat.org, a new Web publication sponsored by the California HealthCare Foundation.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.