Chief Executive Officer
Beacon Health Care Systems’ (Beacon HCS) customers are health insurers (payors), primarily those focusing on government programs, including Medicare Advantage, Part D payors, Medicaid, and specialty health plans. The complexity for these health plans to serve their members and provider networks is exceptionally high and very regulated. If the level of care provided to members is insufficient or if the processes are out of compliance with regulations, payors risk fines, penalties, and potentially other sanctions. They are also at risk of beneficiaries moving to another insurer.
Operating in this environment is no small challenge for health plans. It can take many staff resources to track regulatory changes, execute them, and accurately report the information. Many of the current solutions on the market use dated technology that is not fully automated, doesn’t have built-in reporting, or provide enough updates on current regulations. The struggle is real for payors. Many plans still leverage manual processes with increased staff or in-house tools, both of which increase the risk of human error.
Beacon’s Software as a Service (SaaS) model enables health plans to automate processes such as appeals and grievances, compliance management, enrollment, and supplemental benefits. They build workflow and guardrails into their solutions to maintain accuracy, reporting, and audit readiness to compliance standards. When the workforce went remote at the start of the pandemic, their behind-the-scenes automation became even more critical to ensure that activities stayed on track, continued to meet timeliness requirements, and delivered efficient workflow throughout health plans.
Ken Stockman, CEO of Beacon HCS, started another company in 2004 before Medicare Advantage (MA) had even begun. The business was one of the initial players working on risk adjustment and enrollment. “I thought of that company on a set of PowerPoint slides, founded it, spent five years building it, then exited. I started Beacon because I truly wanted to make a positive impact on members’ health,” he explains. “I thought one of the best ways to do that was by improving payors’ operations and data insights, so they have better and more current information on which to base their business decisions. Plus, we know that freeing up resources with process automation and building interoperability to other systems like enrollment and eligibility frees up clinical resources to work at the top of their licenses, focusing on innovative member care rather than administrative work.”
The steadfast leader has a long track record of building relationships in the payor space, understanding their needs, and how they operate. “We use that knowledge to launch new products every two years and continually enhance our existing products with upgrades and new features,” says Ken. “Our products such as Virtual Compliance Manager and Virtual Appeals Manager are purpose-built for compliance, unlike many others in the market that are bolted on to disparate foundations. So, we are always current with industry standards.”
Initially, Ken launched the company with the Governance, Risk, and Compliance (GRC) suite, but soon recognized the looming need for Appeals and Grievances support by working with the payor clients. So Beacon moved to build that product. Now all products are built on the Beacon Platform which includes the Beacon Workflow tool, Correspondence tool, API integration platform, and analytics. This makes launching new products such as supplemental benefits management and enrollment solutions a much faster process.
Ken is a student of the industry and a respected leader in payor technology. Where other entrepreneurs may look for the next shiny object, Ken looks to improve current processes that are foundational to health plans to add greater value, efficiency, and insight to their operations. For example, while some plans may see appeals and grievances as just another part of the job, Ken sees valuable insights embedded in the documentation. Turning the data into useful information by creating unique industry KPIs gives payors a better understanding of how they are performing as a plan: are they doing right by their members, and where do they need to focus their attention to do better?
His unwavering vision is to create best-in-class solutions. Ken firmly believes that if Beacon does not have the best product in the industry, they are not doing their jobs.
“I’m passionate about partnership and, together with my leadership team, we make sure that this philosophy permeates Beacon’s culture. It is even one of our leading values,” Ken says. This commitment to service has served Beacon well: a client that had to terminate its relationship because the plan was acquired asked Beacon to support it post-contract on an audit. Ken says, “We showed up, supported them, and got an opportunity with the new parent company, which led us to win that national account.”
Innovating the Solutions
Beacon has a commitment to innovation for both the existing products and the ones on the roadmap. They are currently pursuing a BOT strategy to add to many of their products. In the next six months, they will be leveraging OCR, NLP, and AI technologies to create significant automation improvements for clients, saving them millions of dollars in manual labor costs and rework.
A distinguishing aspect of Beacon’s solutions is that they are purpose-built for compliance (rather than bolted onto another disparate offering) to keep health plans audit-ready at all times. “We built automatic and ongoing updates to regulatory and compliance standards into our products, so health plans can trust that they are always working toward the most current specifications,” says Ken. “Our industry experts continually monitor the Centers for Medicare and Medicaid Services (CMS) and other regulatory bodies for new requirements or changes and updates to existing standards and mandates. For example, we let our clients know about changes to the 2022 universes even before they asked about them. Staying current relieves the administrative pressure on payors who would otherwise need to frequently tie up valuable internal resources to update their applications with changing compliance and regulatory changes.”
The company’s foundational products are Virtual Appeals Manager and Virtual Compliance Manager. Both are recognized as industry leaders.
Virtual Appeals Manager (VAM) enables payors to monitor, manage, and report on appeals and grievances for regulatory health plan compliance for all lines of business (Medicare, Medicaid, Commercial). Chief Medical Officers and other clinicians quickly recognize the simplicity of VAM, allowing them more time to spend on the clinical side of their jobs, so adoption is high. Currently, a third of clients are BlueCross BlueShield plans, and 14% of them use VAM.
VAM features Case Wizard, an intake tool to ensure case type, category, and even sub-category are accurate. VAM also enables case management to improve turnaround times while built-in guardrails and workflow ensure that no steps are overlooked or cut short.
Notably, VAM manages and tracks correspondence and communication. “We see payors use a massive number of letter variations to communicate with members. We reduce these to a manageable and efficient core of templates, making it easier to ensure that they comply with CMS standards. We’re the only ones in the industry to offer Workbaskets that auto assigns cases,” adds Ken. “Lastly, VAM excels at tracking, reporting, alerts, and dashboards to monitor and report on every step of the appeals and grievances processes.”
Multiple VAM clients have gone through a CMS audit with no findings, attributing their success to Beacon’s solution. Furthermore, VAM has been shown to improve STAR ratings (in one case, helping a Blues plan achieve a 5 Star rating), reduce the number of Notices of Non-Compliance (NONC), and minimize Civil Monetary Penalties (CMP).
Virtual Compliance Manager (VCM) is the leading compliance management solution for health plans on the market. It increases productivity with real-time auditing and monitoring of transactional data, enabling payors to correct and address issues immediately.
VCM includes a Guidance Center with weekly updates on regulatory guidance (e.g., HPMS memos and summaries of impacted business areas) and the ability to distribute and assign tasks related to regulatory changes. Policies and procedures (P&Ps) can be maintained in VCM, and duties can be assigned and tracked for routine review and update of P&Ps in the Guidance Center. “We will continue to invest tremendously in our compliance solution, particularly in crucial aspects of health plan compliance management, including distribution of regulatory updates (with task assignment), management of P&Ps and corrective action plans, monitoring, auditing, and compliance risk assessment. These updates will be enhanced further through key analytics tracking and reporting.”
Toward the Future
Now is an exciting time for Beacon. They recognize their vision of being the operational platform for health plans that automates various administrative, regulatory, and compliance tasks giving payors time back to focus on member care.
One of the crucial milestones in its history is the partnership it developed with Independence Blue Cross. “Not only are they one of our larger clients on Appeals and Grievances, but they are also one of our Series A investors. Their partnership has powered our growth significantly and led to Anthem Ventures taking on our Series B investment,” adds Ken. “We really are making a difference in people’s lives. That’s one reason why my team is so committed.” For instance, a 65-year-old member may be having a problem with their provider, or their provider is having trouble getting particular care approved, so the member files an appeal or grievance to get the proper care. Now, all that correspondence and investigation that is part of the appeals process runs through Beacon’s platform automatically, which helps payors care for their members faster and improve outcomes. “So, we are passionate about the fact that we are part of the health care delivery system and that we have client relationships that I’ve just never seen before because we live and breathe (and conquer) these challenges with them every day.”
Beacon Healthcare Systems starts with subject-matter experts who have worked for payors and done the jobs for many years. They strive to hire the best experts in each product area to ensure their solutions are designed and built not just by engineers but with the leadership of operational experts. The Beacon Platform includes the Beacon Workflow tool, Correspondence tool, API integration platform, and analytics. They have and will continue to leverage this platform to power the development of additional mission-critical tools in partnership with their clients.
“One thing that makes us different is that we have been doing this for a long time. I have a model of hiring people that have done the job before, so we have an exceptionally deep bench of experience. We hire people from health plans who know what needs to be done and what they are doing,” explains Ken. “Our clients don’t need to expend time and energy teaching us their business. We can get right into solution build and implementation and be up and running quickly, far faster, and more accurately than other vendors in the market.”
Beacon also has an account management focus. They make sure their folks are available to clients and listen to them. Their account managers bring that feedback to the leadership team to help direct process improvement and future product enhancements or development. The company is agile and aggressive, pays attention to the clients, and goes above and beyond to serve them. Clients are so pleased with the service philosophy and quality of their solutions that they also invest in Beacon.
“We have an evolving platform strategy. The core technology we built for appeals and grievances is phenomenally flexible and a powerful case management tool. All of our products will be on this core platform,” says Ken. “And we are building out our data science and analytics strategy to aggregate data and tease out insights that give health plans the information they need to make directional decisions on tough operational and service questions. Our compliance solution will continue to see a tremendous amount of investment in audit preparation and audit risk reduction.”