Spotting the unseen menace: Medical provider fraud, waste, and abuse

By Andy Tolsma August 16, 2017

Although the insurance industry is constantly plagued by suspicious claims activity, the unseen menace that’s leading to diminished profits is medical provider fraud, waste, and abuse.

With a total of $30 billion lost to claims fraud each year in the property/casualty insurance arena, 80 percent of that figure—or a whopping $24 billion—is attributed to medical provider fraud alone. To further highlight the severity of the situation, the overarching cost of healthcare fraud, waste, and abuse—outside of the property/casualty industry—is about $400 billion, which is equivalent to more than $45 million lost every hour.

Clearly, medical provider fraud is a grave problem for insurers. In many cases, detecting suspicious medical providers is stymied by limited resources. It’s also difficult to see which cases have billing problems due to complicated medical insurance coding and unfamiliar treatment protocols. And, unfortunately, most carriers don’t have enough Special Investigation Unit (SIU) resources to actively identify and thoroughly investigate medical provider fraud and abuse.

Current medical bill review solutions aren’t the answer. For example, medical bill review (MBR) companies only apply edits to ensure bills are coded correctly, but do not apply analytics to identify questionable providers and their activities. This means that medical provider fraud, waste, and abuse continues to fly under the radar.

Further, the entanglement of complicated medical billing enables providers to take advantage of patients’ billing data to manipulate and deceive. Unscrupulous practices may include:

  • billing every patient for the same treatment modalities
  • performing or billing for procedures unrelated to the specialty or practice of the provider
  • performing or billing for medically unnecessary procedures
  • billing for services that were not provided

While the level of obfuscation involved in medical provider fraud, waste, and abuse makes it feel nearly impossible to overcome, there is an answer. ISO MedSentry is a tool that combines predictive analytics and expert clinical review to effectively and efficiently detect fraudulent medical provider activity. The solution accurately identifies suspicious behavior and then places this information at SIU and claims professionals’ fingertips. Carriers who use ISO MedSentry have already reduced their exposure to future billings by suspicious providers by tens of millions of dollars. To learn more about ISO MedSentry, contact Andy Tolsma at Andy.Tolsma@verisk.com.