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Delta Dental of Virginia has been quietly building two new private, for-profit companies as it seeks to expand its reach beyond being Virginia's largest provider of dental insurance.
Both Roanoke Valley-based startup companies operate in the technology realm of the insurance business, with one providing real-time insurance claim processing and the other specializing in helping companies administer and analyze their dental benefits.
"They will help us because this will help to drive costs down in the long term," George Levicki, president and CEO of Delta Dental of Virginia, said Monday.
By investing in new lines of business, Levicki said Delta Dental will be in a better position to compete in the changing insurance environment and take advantage of opportunities created by the overhaul of the nation's health care system.
Plus, Levicki said, the new businesses will add 36 jobs in the Roanoke Valley this year. By early 2013, about 175 employees from the two companies will be moved to the former Verizon building on Airport Road in Roanoke County. Delta Dental purchased it for about $1.9 million late last year, according to Waldvogel Commercial Properties.
The road to creating these two companies began four years ago when the board of Delta Dental of Virginia created a parent holding company, Corvesta Inc. Both Delta Dental and its parent are tax-exempt entities, and Levicki also serves as CEO and president of Corvesta. About 315 people are employed throughout the organizations.
In January 2009, Corvesta acquired a small software development company out of India that served as a resource for the creation of the first of the two new startups, Mercury Data Exchange.
MDE is now marketing its electronic claims processing software program to dental offices with the promise that it can eliminate paperwork and speed up the overall process. Already the company is working with 500 dental insurance companies operating in 31 states, Levicki said.
The second startup, Corvesta Services, was formed about a year ago as a way to commercialize Delta Dental's expertise in administering dental insurance claims.
In essence, Delta Dental created a computer system that allowed it to run its insurance claims and analyze data about participants on those claims. That data can be used to direct information to certain people or populations, such as ways to prevent periodontal disease among diabetics.
Corvesta Services provides that service as well as telephone customer service, fraud prevention and the real-time MDE claims processing.
Levicki said Corvesta Services wants to sell its administration and analytic services to insurance companies, large group employers and third party administrator groups. Corvesta Services already operates in two other Eastern states, Levicki said, although he wouldn't name them.
While Corvesta Services currently focuses on dental benefit administration, Levicki said there are options to broaden the service to other ancillary health care benefit policies such as vision.
Meanwhile, the parent company isn't just looking to these new startups as a way to grow its future business. It recently purchased the assets of a former life insurance company in February that gave Corvesta access to insurance licenses in 34 states and Washington, D.C. The company has not yet determined what it will do but is considering offering vision or dental insurance in those states.
Despite the recent moves, Levicki said Delta Dental, which has about 1.7 million enrollees, remains the primary revenue stream for the company, representing about 98 percent of the company's approximately $500 million in annual revenues.