A key test for so-called “Big Data” will be Opera Solutions’ devising of a new fraud detection system for the state health insurance exchanges established under President Barack Obama’s Patient Protection and Affordable Health Care Act, its chief strategist said.
The New York-based private company’s work for the Centers for Medicare and Medicaid Services will be transferable “to many different industries in many different verticals,” said Laura Teller, chief strategy officer, because the applications can be used to root out fraud across many sectors, from supply chain to marketing.
For the health exchanges, Opera will devise algorithms to continually analyze new applications made under the national health care plan that begins next January, building on eligibility verification and fraud detection techniques that have been deployed for years in both healthcare and financial services.
Teller said the algorithms and software can detect errors in applications or in claims submitted. 0pera's solution can also be programmed to detect any type of data outlier during the application process, including system delays, processing issues or fraud. This will ensure that these rapidly growing exchanges operate as they were designed and payment or subsidy streams are safeguarded.
The “big data” approach of using software capable of deep analysis and use for prevention is needed because of the sheer scope of the health exchanges, which will cover the nation’s 315 million citizens.
Opera Solutions has already devised similar software used by hospitals to manage monthly staff assignments that cut administrators’ time to two hours from two days. Other kinds of applications can be used in finance to score mortgage applications or in other industries, Teller said.
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Opera Solutions was founded in 2004 by Arnab Gupta, who’d previously started Mitchell Madison Group, which was acquired for $300 million by now-defunct USWeb, and Zeborg, acquired by private Emptoris.
The company raised $84 million in October 2011 from Silver Lake Sumeru, one of the units of Silver Lake Partners, the Menlo Park, Calif., private equity company said to be working with Dell Inc. (NASDAQ:DELL), the No. 3 PC maker, on a prospective management buyout. Hollie Moore Haynes, a managing director, oversees the Silver Lake Sumeru stake in Opera.
Teller said the company now has a payroll of around 700, including 230 scientists and experts in machine-learning techniques applicable for “big data” design. She declined to provide revenue and profit amounts or to say if Opera Solutions plans an initial public offering.
Last year, Splunk Inc. (NASDAQ:SPLK) of San Francisco completed its IPO, the first of a pure-play “Big Data” company to compete against traditional players including Oracle Corp. (NASDAQ:ORCL), the No. 1 database company, and Teradata (NYSE:TDC), a data warehousing specialist.
Shares of Splunk closed Friday at $33.50, up 35 cents. Since the April IPO, they’ve fallen 7.5 percent. Markets are closed Monday for a federal holiday.