The Pittsburgh-based UPMC system will invest in a health insurance technology company to help expand its Medicare Advantage plans. The details of the investment were not disclosed.
Hilton Head, S.C.-based Cavulus, which has been in business for 10 years, uses predictive modeling and data analytics tools to help health insurance companies grow membership, primarily in the Medicare Advantage market. The company helps health insurers automate marketing, sales, enrollment, retention and compliance operations.
Medicare Advantage policies serve as the private alternative to traditional Medicare and often include extra perks such as eye care and reduced cost-sharing. The federal government pays health insurers set amounts for each member, although sicker members result in higher payments. Federal law requires at least 85% of the revenue be spent on patient care.
Cavulus, which is a trademark of HealthPlanCRM, works with more than 35 health plans nationwide, including UPMC Health Plan for the past three years, according to the announcement.
“We share UPMC's vision of consumer-centered, affordable health care, driven by innovation and technology,” Cavulus CEO Patrick Phillips said in the statement.
UPMC Health Plan, which is owned by the UPMC health system, serves more than 134,000 Medicare Advantage members.
The hospital also serves as an in-network provider for other Medicare Advantage plans. In 2015, a state judge ruled that UPMC had to remain an in-network provider for Highmark's Medicare Advantage plans through 2019 under a consent decree reached by the two long-battling organizations. The state took UPMC to court after the system announced plans to end its Advantage contracts with Highmark because the insurer allegedly failed to pay UPMC contracted rates for cancer care. As part of its case, UPMC alleged that Highmark stopped paying UPMC contracted rates for cancer care and owed the system $143 million.
Over the past two years, UPMC has made several investments in technology companies, including mental health services provider Lantern, oncology services provider Cernostics, and risk-adjustment firm Health Fidelity.