Medical-related fraud and theft increase during COVID-19 crisisBy Jim Hulett | May 1, 2020
Most nonessential businesses are closed, road traffic is reduced, medical staff is stretched thin, and noncritical medical treatment and procedures are on hold. The COVID-19 pandemic has disrupted every industry—and maybe none more than the medical field that stands on the front line of fighting the virus.
Unfortunately, crisis is fertile ground for fraud, whether it be the opportunistic kind or organized criminal activity. And medical claims are a prime target due to their increased exposure and potentially large payouts.
Medical claims in crosshairs of criminal activity
Insurers need to be on guard to mitigate risks associated with the entire medical ecosystem—whether it be bodily injury claims, workers’ compensation claims, or the medical supply chain. There’s already been a rise of questionable activity in all of these areas, and the trends are expected to continue. Here’s a look at some recent activity.
Increased risk of medical supply theft
With medical equipment such as N95 respirator masks and protective gear in high demand, thieves are targeting these goods for profit. In March, a truckload of nitrile gloves was stolen in South Carolina, and police recovered 20 cases of stolen N95 masks in Oregon that were listed for sale online. Thieves have also targeted hospitals and research labs to steal these supplies.
Organized fraud targets medical claims
Organized fraud rings have historically targeted healthcare because of the high costs of claims. In 2018 alone, the FBI dismantled 207 medical fraud rings. We’re already seeing an increase in potential organized fraud activity since the pandemic hit the United States. There’s been a 12.5 percent increase in claims involving parties linked to previous fraud ring investigations, according to Verisk data. If the trend continues at its current pace, there could be a 31 percent rise in these types of claims.
Rise in suspicious medical billing
With hospitals and doctors’ offices full of patients and an increase in COVID-19 claims, there’s greater exposure to potential fraud, waste, and abuse in medical billing practices. In fact, over the last 60 days, there’s been an increase in claims linked to providers with suspicious billing practices, including a 14 percent increase in the last month.
Workers’ compensation claims spike
The workers’ comp line of business is experiencing an interesting dynamic. Much of the workforce is at home, while essential workers face an increased exposure to the virus. Although there are many legitimate workers’ comp injury claims during this time, there’s the potential for bogus ones as well. There’s already been a 159 percent increase in COVID-19–related workers’ comp claims from the first quarter to the second quarter, and we’re still early in Q2.
Scammers try to exploit Medicare and Medicaid beneficiaries
The senior population is typically more susceptible to certain fraud schemes, and the FBI has already reported an increase of scams exploiting the pandemic. There have been several reports of individuals selling fake COVID-19 tests and offering treatments—often asking for victims’ Medicare or Medicaid numbers or other insurance information to bill healthcare programs or private insurers for illegitimate services.
Stem threats with the right solutions
With criminal activity spanning various lines of business and involving an assortment of schemes, it’s important for insurers to take a holistic approach to fraud and theft during this crisis by creating an effective perimeter defense. This often includes claims fraud detection tools as well as access to insights to monitor fraud trends.
Verisk has a robust suite of solutions and services to help you reduce your exposure to the heightened risks during the pandemic. From the industry’s most comprehensive anti-fraud toolkit—which includes the leading medical provider fraud detection solution—to services that prevent cargo theft and increase recovery rates, Verisk helps equip the industry with powerful analytics and insights to manage risk.
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