United Healthcare 2010 Annual Report Download - page 10

Many of Ingenix’s contract research services, consulting arrangements and software and related information
services are performed over an extended period, often several years. Ingenix maintains an order backlog to track
unearned revenues under these long-term arrangements. The backlog consists of estimated revenue from signed
contracts, other legally binding agreements and anticipated contract renewals based on historical experience that
either have not started but are anticipated to begin in the near future, or are in process and have not been
completed. Ingenix’s aggregate backlog at December 31, 2010 was $2.8 billion, of which $2.0 billion is expected
to be realized within the next 12 months. This includes $0.8 billion related to intersegment agreements all of
which are included in the current portion. Backlog amounts do not include approximately $500 million for the
portion of the i3 business that is being divested, which is discussed below. Ingenix cannot provide any assurance
that it will be able to realize all of the revenues included in backlog due to uncertainty regarding the timing and
scope of services and the potential for cancellation or early termination of service arrangements.
The Ingenix companies are divided into two groups: Information Services and i3.
Information Services. Information Services’ diverse product offerings help clients strengthen health care
administration and advance health care outcomes. These products include health care utilization reporting and
analytics, physician clinical performance benchmarking, clinical data warehousing, analysis and management
responses for medical cost trend management, physician practice revenue cycle management, including
integrated electronic medical record systems, revenue and payment cycle management for payer and health care
professional organizations, payment accuracy solutions, decision-support portals for evaluation of health benefits
and treatment options, risk management solutions, connectivity solutions and claims management tools to reduce
administrative errors and support fraud recovery services. Information Services uses proprietary software
applications that manage clinical and administrative data across diverse information technology environments.
Information Services also uses proprietary predictive algorithmic applications to help clients detect and act on
repetitive health care patterns in large data sets. Information Services offers comprehensive Electronic Data
Interchange (EDI) services helping health care professionals and payers decrease costs of claims transmission,
payment and reimbursement through both networked and direct connection services. Information Services
provides computer assisted coding, publishes print and electronic media products that provide customers with
information regarding medical claims coding, reimbursement, billing and compliance issues.
Information Services provides other services, such as medical necessity compliance services, verification of
physician credentials, health care professional directories, Healthcare Effectiveness Data and Information Set
(HEDIS) reporting, and fraud and abuse detection and prevention services. Information Services also offers
consulting services, including actuarial and financial advisory work through its Ingenix Consulting division and
health care policy research, implementation, strategy and management consulting through its subsidiary, The
Lewin Group, as well as product development, health care professional contracting and medical policy
management.
i3. i3 uses comprehensive, science-based evaluation and analysis and benchmarking services to support
pharmaceutical and biotechnology development. i3 provides services on a nationwide and international basis,
helping customers effectively and efficiently get drug data to appropriate regulatory bodies and to improve health
outcomes through integrated information, analysis and technology. i3’s capabilities and efforts focus on the
entire range of product assessment, through commercialization of life-cycle management services – pipeline
assessment, market access and product positioning, clinical trials, economic, epidemiology and safety and
outcomes (including comparative effectiveness) research. i3’s global contract research services include
regulatory assistance, project management, data management, biostatistical analysis, quality assurance, medical
writing and staffing resource services. i3’s contract research services are therapeutically focused on oncology, the
central nervous system, respiratory, infectious and pulmonary diseases and endocrinology.
In January 2011, we announced that as part of focusing on its distinct life sciences competencies, Ingenix is
exiting certain portions of the clinical trial support business and intends to sell these businesses. The businesses
to be sold include those that mainly provide services in connection with the clinical trials that help
pharmaceutical companies get a compound approved by the U. S. Food and Drug Administration and other
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