Innovator CEO profile: Beacon Healthcare Systems’ Ken Stockman

In this Innovation Lab interview series, Stockman discusses leveraging appeals and grievances data as a payer report card, embracing data science and why founding a company can be akin to engaging in battle.

Health Evolution | March 29, 2021

Beacon Healthcare Systems is working to apply data science and analytics to appeals and grievances technology and information in the payer space.

Why? Because CEO Ken Stockman envisions gleaning insights from appeals and grievances data to create unique industry KPIs that inform payers about what they should be striving to accomplish. Stockman, in fact, says the resulting information will constitute “a report card for payers.”

Health Evolution interviewed Stockman about moving out of startup mode and into the growth phase, how the company is also advancing its compliance technology as part of an overall platform strategy and not backing down from the manner of business “body blows” startup founders often feel.

What is the inspiration fueling Beacon Healthcare Systems or its origin story?
The origin is that I started another company in 2004 before Medicare Advantage had even begun. That was one of the initial players in Medicare Advantage 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 I decided to sell my stake and left. I started this company and initially hired people to run it for me for the first couple of years because I had an opportunity to go work in the payment integrity space with iHealth Technologies, which was bought by Connolly and has since become Cotiviti. After doing that for a couple of years I came back here, and I have been building the company ever since. I have a long track record in the payer space in understanding payers and how they operate, what their needs are and in building relationships.

One thing that makes my team so passionate is that some appeals and grievances include a 65-year-old member having a problem with their provider or the provider having a problem getting certain care approved. And that all runs through our platform. 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.

Building on what you said about moving into growth mode, what should current and prospective clients expect in the next 18-24 months?
We have two core products today: our compliance platform and our appeals and grievances platform. Our compliance platform is in complete investment mode. We’re expanding it, we’re extending it. For example, we have a new universe scrubber which has already been very well received. From my perspective, if we do not have the best product in the industry then we are not showing up to work. Our compliance tool is really evolving right now, and it is going to continue to see a tremendous amount of investment. We hired a Chief Compliance Officer last March, John Tanner, who was the Medicare Compliance Officer at Molina. We also added a Senior Vice President of IT Development and Infrastructure last year, Manish Nautiyal, who joined us from Molina as well. On the compliance side, you are going to see the functionality and overall focus on assisting in audit preparation and audit risk reduction.

Also, in the next 18 months, we have a member services strategy that includes certain areas of the delivery process that today are antiquated or manual. Some of the platforms that are in place are extremely expensive and unwieldy. So, we have been partnering with some of our clients to look at different ways we can help them automate parts of their member service processes in a cost-effective way, which ties right into our overall product.

What will that enable Beacon to do that it otherwise could not?
The most exciting aspect is that we have done some initial proofs of concept and believe we have so much data now that we can create industry insights and KPIs that no one else is producing, and we have hired a data scientist. For health plans, we can basically shed light on appeals and grievances, we can start on social determinants of health issues, and we can create KPIs for both prospects and clients, so they know what they really should be striving to do. Across the next six months if you’re an appeals and grievances client, you’re going to see the insights and the data analytics science to help the industry understand that appeals and grievances are the report card for health plans. Health plans have historically taken appeals and grievances as “People are complaining, I don’t want to address this, but we have to.” What I used to tell people when I was in risk adjustment back in 2007 was “Don’t just do risk scores to raise your revenue. Use the risk scores to determine who should be in which programs.” No one ever did it because they were too focused on revenue.

What we want to be saying to our clients is “Hey look, we know that you have cases that are going to become untimely next week that you need to deal with, we know that you’re going to have an audit risk you need to deal with it, here’s how we can help.” We’re going to be leveraging analytics to guide the way health plans think about appeals and grievances to “Wow, I can get in front of this and therefore I’m reducing the number of calls to customer service. I’m improving my member retention rate and improving my provider relationships and I’m really making a significant improvement in our members health over time.”

The most exciting aspect is that we have done some initial proofs of concept and believe we have so much data now that we can create industry insights and KPIs that no one else is producing.

Ken Stockman, Beacon Healthcare Systems

And what about looking further into the future, perhaps three to five years?
We have an evolving platform strategy. We call the platform Charlie, after my first dog. The core technology that we built for appeals and grievances is a phenomenally flexible and powerful case management tool. Our additional products will be on that core platform as well, and then we will have this data science and analytics strategy to start aggregating data and teasing out the insights to the answers health plans need.

We are also moving very aggressively to roll out our own enrollment product. There are other players, but we have seen technology developments cycle back to where existing products for enrollment have gotten stale. They have not really continued to improve their products. We already have some beta clients signed up for our product, and we’re getting interest. That’s something I built at my last company and I’m excited about the opportunity to do it again.

We also have a utilization management product. There are two different versions of utilization management in the nation. There is the West Coast model and the rest of the United States, believe it or not. The West Coast has always been a leader in managed care and so the West Coast version of utilization management is less about denial of care and more about coordination of care, overall cost of care and ensuring that the outcomes improve. Our phase one product is going to be more East Coast, or rest of the US focused on auto approval and integrated with our appeals and grievances platform around utilization management. Phase two will be the West Coast version to help clients understand care patterns and what care is required. We do have an enhanced benefit product as well that we are going to be rolling out because in many markets Medicare Advantage plans are offering different benefits. The ones that we see quite often are the gym benefit or transportation benefit, like in Puerto Rico, which has a huge 65 and older population as a percentage. They’re even offering benefits such as food delivery and electricity that encourage enrollment. We built the platform with one of our largest national payers, and we plan on expanding, extending, and bringing that to market.

You mentioned there are other players in these spaces, so what makes Beacon Healthcare Systems different?
One of the things that makes us different is we have been doing this a long time. I have a model of hiring people that have done the job before. My Senior Vice President of Delivery and Payer Product Innovation, Bevann Moreland, has more experience in the health plan space in operations and claims and all parts of the process than I can shake a stick at. I hired Laurie Delgado as our Vice President of Appeals and Grievances because she was running Anthem’s Medicare appeals and grievances. We have hired people from health plans that know what needs to be done, and they know what they are doing. We are passionate about having an account management focus and we make sure those folks are available to our clients and listening to them. We had a client that was acquired and had to term our relationship but asked us to support them post-contract on an audit. We showed up, supported them, and got an opportunity with the national account, which led to us winning that national account.

At the end of the day when anyone thinks about Beacon Healthcare Systems from a payer perspective, we want them to think that we are the expert in whatever product area they are talking about. We are the expert, period. We are not just a company dumping software on them. We can sit down and run those departments if we had to. The whole point is that our health plan clients are partners. We are nimble, we’re aggressive, we pay attention to them, and we really go above and beyond anytime we need to.

As a founder and CEO, which accomplishments are you most proud of?
We signed the biggest accounts in Puerto Rico on our appeals and grievances platform. Then we signed Highmark Health on our appeals and grievances platform and then, because of Highmark, we signed Independence Blue Cross. Those wins and then winning the national account I mentioned are huge. It’s one of the bigger accounts in the industry and it enabled me, as the CEO, to be able to do so much more, such as bringing in the senior executives I mentioned. They are so talented, so experienced and so credible. That they were willing to sign up for this journey to help me build the company, that is something I am proud of and super humbled by. I have a very experienced, scalable team helping me turn this into a bigger company.

The other thing I am very proud of — and I don’t take credit for this — is the fact that in 2020 my account management team had a renewal rate of about 98 percent, and they were able to sell them more. Anytime, as CEO, you look at your team and they can renew basically 100 percent of clients and get them to buy more, you know you are doing something right.

What advice would you give to other entrepreneurial CEOs and founders?
If you are trying to build a company in the payer space, you can’t just build software. The health plan environment regulatory landscape changes. COVID-19 has changed things. Requirements change. You must be passionate about partnership in this industry if you want to win — and you must invest. Pre-COVID, I spent 80 percent of my time with clients and prospects, because they care. They want to know you are investing. You must focus on the payers’ needs being assessed, met and met in a fair and cost-effective way.

It is about really committing to the journey and it can be kind of like a battle. If you take a body blow, or two, three or four, you cannot crawl in the corner and cry about it. You must get up and go deal with it.

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About the Author

Health Evolution, Staff Writer