Insurance Claims Announcement

New IBM Service Automates Healthcare Insurance Claims Processing; Enables Customized Policies for Subscribers

IBM Strategic Alliance with deNovis Inc. eliminates paperwork, speeds payments to physicians and hospitals while cutting cost as much as 50 percent

WHITE PLAINS, N.Y. & Lexington, Mass. June 13, 2002 – IBM today announced it is offering healthcare insurance companies a fully automated, computing service that electronically reads and processes claims much faster and at less cost over the Internet.

The new service will enable insurers to greatly reduce paperwork while offering millions of subscribers the option of more flexible, customized policies including those that emphasize wellness and preventive care programs. Using the service, insurers can also offer subscribers more online help and respond to customer inquiries over the Internet.

The first insurer using the claims processing system will be Empire Blue Cross and Blue Shield with 4.7 million subscribers.

The new claims processing system service is part of IBM's strategy to deliver e-business on demand, which enables customers to acquire standardized business processes, applications and infrastructure over the Internet as a service. The new claims processing system extends the e-business on demand capability to the healthcare industry, making a key business process accessible as a fully managed hosted option running on IBM's e-business infrastructure.

If widely adopted by healthcare insurance carriers the service could save as much as 50 percent of the estimated $250 billion or more annually spent nationwide on the labor-intensive, paper-based processing of healthcare claims. Insurance companies could process claims and make payments to physicians, hospitals and pharmacies in real time at any time.

The IBM service will use application software from deNovis Inc., of Lexington, MA, running on IBM e-business infrastructure. IBM and deNovis have signed a strategic alliance. The deNovis software has the ability to electronically read policy statements, rules and regulations and make appropriate payments automatically. This ability enables carriers to offer customized policies tailored to each family member.

"This is a model for insurance companies to follow in cutting their administration costs by as much as 50 percent, saving billions of dollars," said Russell Ricci, MD and general manager of IBM Global Healthcare. "Empire Blue Cross and Blue Shield is a leader in using IBM's service to offer subscribers more flexible policies and access to more information. Reducing skyrocketing administration costs and encouraging wellness and preventive care programs are key elements in holding the line on the nation's $1.4 trillion healthcare bill."

According to deNovis Chairman Jerilyn P. Asher, "deNovis' language-based processing technology represents a critical breakthrough for the entire healthcare benefits industry. We are confident we can help Empire meet its dynamic vision of innovation and consumer friendliness."

In addition to claims management, other healthcare insurance activities such as benefit selection, customer service, premium billing, group support and member enrollment will be accomplished faster and at lower cost using the new IBM service and the deNovis software.

Under the IBM and deNovis strategic alliance, deNovis will optimize its transaction processing applications and data warehouse infrastructure to IBM eServer pSeries® on AIX® and zSeries® computing platforms, IBM's DB2® database software and IBM's WebSphere® infrastructure software. IBM will use its worldwide marketing force to recommend the deNovis technology to the health insurance marketplace. IBM Global Services will provide integration and implementation services.

Empire's preference for mainframe processing power, for example, led to the selection of IBM's WebSphere Application Server running on the highly reliable and available IBM eServer zSeries.

As part of the agreement with Empire, IBM and Empire will jointly develop and maintain the company's core applications, including software enhancements, fixes, testing and extensive modernization projects. In addition, IBM will provide support services for Empire's data center functions and the company's technical support help desk. Financial terms of the agreement were not disclosed.

About IBM Healthcare and IBM Global Services

IBM is in the forefront of improving how healthcare organizations deliver efficient, high quality care. IBM, in combination with its global network of business partners and strategic alliances, delivers powerful e-business technology and comprehensive services that help healthcare organizations achieve success. IBM Global Services is the world's largest information technology services provider, with about 150,000 professionals serving customers in 160 countries and annual revenue of $35 billion (2001). IBM Global Services integrates IBM's broad range of capabilities -- services, consulting, hardware, software and research -- to help companies of all sizes realize the full value of information technology. For more information please visit

About deNovis Inc.

deNovis, founded in 1999 as eHealthDirect, provides advanced technologies for claims processing and information management to the health care benefits administration marketplace. deNovis' dynamic, language-based transaction technology enables health plans to dramatically reduce administrative costs, expand their range of products and services and provide the levels of customer service demanded by providers, employers and consumers. deNovis is backed by UK-based 3i and US-based investors Advanced Technology Ventures, Audax Group, Psilos, Utah Ventures, and JP Morgan Partners. The company is headquartered in Lexington, Massachusetts. Visit

About IBM e-business on demand

IBM offers a variety of e-business on demand services for customers, including managed hosting, e-commerce, e-procurement, remote network management and managed storage. IBM e-business on demand services represent the next stage in computing, in which applications, infrastructure and business processes are delivered on demand over the network as a utility-like service. For more information on IBM e-business on demand services, visit:

About IBM PartnerWorld for Developers

PartnerWorld for Developers is the developer resource for IBM Business Partners. It is a worldwide program designed to help software developers reach broader markets, lower their costs of doing business, and take their products to market faster. For more information, visit, or call 1-800-627-8363 in North America, 1-770-835-9902 outside North America. ® Indicates a trademark or registered trademark of the IBM Corp.