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Low-exposure medical provider fraud may be costing you millions

There’s a premise in insurance fraud management that lower exposure medical provider fraud, waste, and abuse (FWA) cases aren’t worth investigating because the time and resources involved may cost more than the exposure you have to the medical provider. I’d like to challenge that belief.

We can debate reasons why high-exposure provider fraud, waste, and abuse cases exist, but the hard truth in most circumstances is that investigators simply failed to do a sufficient job detecting and handling the exposures when they were small. That’s why without proper early intervention a $10,000 provider exposure can eventually balloon into $1.5 million.

The sooner we acknowledge the importance of early intervention in low-exposure cases and build risk assessment protocols around them, the stronger our prevention and mitigation efforts will be.

How low exposure can quickly increase

While investigating the large, million-dollar medical provider fraud cases can be exciting and significant, catching low-exposure fraud, waste, and abuse early can be just as impactful.

Here’s a real example of a physician whose billing threat exposures started small, flew under the radar, and eventually cost the insurer significantly. For privacy purposes, his name is fictitious, but the dollars billed are real.

Between May 2011 and November 2021, Dr. John Doe’s suspected fraud, waste, and abuse dollars billed increased 930 percent, from $386,955 to more than $3.9 million.

In 2011, Dr. Doe’s billing was limited to two threats detected with an exposure of $386,955—a solid exposure, yet one some may still consider low. Effectively, he was unbundling and overbilling. It appeared those threats were handled well because they weren’t present when he reappeared on the radar in 2013. However, two new billing threats emerged. He was billing more patients per day than he could reasonably treat and billing for questionable mechanical traction. These threats presented an exposure of $598,670.

Switching billing schemes is a common tactic among suspicious providers. If they believe you’re only focused on certain aspects of their billing, they may clean up their act in that area and probe you for other vulnerabilities.

An undetected, $3.9M billing scheme

The insurer didn’t handle Dr. Doe’s 2013 billing schemes with the same efficiency as 2011. As the chart shows, by 2019, his FWA billing threat count grew to eight, including the two threats from 2013. During that period,  his billing threat exposure increased to nearly $2.2 million.


To make matters worse, two years later, Dr. Doe’s billing threat count grew to 13, including six of the same threats detected in 2013 and 2019. By the time 2021 rolled around, Dr. Doe had amassed a new suspected FWA billing threat exposure of $3,986,181.

Strategic, early intervention methods

It’s clear that low-exposure provider cases can avalanche into expensive cases if they’re ignored. If an unscrupulous medical provider can get away with lower cost FWA billing, they’ll often progress to larger bills.

That’s why early involvement in lower exposure cases is critical. It’s as much an exercise in preventative due diligence as it is an investment in your future competitive advantage. By setting up a strong, balanced, and impactful perimeter defense, bad providers are forced to deploy their FWA schemes elsewhere.

Here are a few strategic methods to handle low-exposure cases while also tackling the more costly ones:

  • Assign lower exposure provider cases to new analysts or investigators. The scope of these cases will be smaller, and provider patterns of practice will be easier to detect. Lower exposure cases offer valuable training and development for your less experienced staff while concurrently presenting the opportunities to reveal actionable findings worthy of pursuit and early risk mitigation.
  • Mix lower exposure provider cases into the caseloads of your seasoned analysts and investigators. Experienced staff should be able to turn over lower exposure cases significantly faster. This not only supports your early intervention strategy but also strengthens your unit’s overall referral cycle times.
  • Analyze some of your high exposure provider risks. Assess how early you could have detected the risk. Discuss how earlier detection and intervention could’ve kept the exposure contained. Turn the lessons learned into a roadmap.

Prevention is better than ‘pay and chase’

Ideally, the days of only assigning investigators high-exposure cases of $1 million or more will fade away. Before that can happen, we have a lot of cleaning up to do. Remember, stopping inappropriate payments to bad providers is much easier than trying to get that money back once it’s gone.

By taking a more balanced approach to your medical provider FWA risk assessments, you can significantly progress toward ending the “pay and chase” problem. Limited pursuit of low-exposure provider FWA isn’t just costing us dearly; it’s also financially benefitting the bad providers we’re tasked with detecting and deterring.

In the next installment of this series, we’ll profile another low-exposure provider whose tactics were different than Dr. Doe’s, but just as costly. Stay tuned.

Bo Barber, CFE

Bo Barber, CFE, is director of investigative analysis for Verisk’s anti-fraud solutions group. For more information on how Verisk can help your organization detect medical provider fraud, contact

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