Property/casualty medical fraud: 5 strategies for reducing your exposureBy Shane Riedman | December 20, 2019
It seems like every month there’s news of another medical fraud bust, often involving rings of various types of providers. But that’s just the tip of the iceberg. There’s plenty of medical provider fraud that goes undetected—and even more waste and abuse that creates unnecessary, and costly, leakage for property/casualty insurers.
But there are ways for insurers to mitigate losses. Here are five tips to help uncover medical provider fraud—and reduce your exposure to suspicious billing practices.
- Look beyond fraud to address other suspicious behavior
While fraud (intentional misconduct) gets a lot of attention—and rightly so—it can be expensive and time-consuming to investigate. It can involve building a case and collecting evidence over a long period of time.
That’s why addressing other suspicious behavior, such as waste and abuse, is also important. While these behaviors aren’t necessarily criminal or intentional, they are costly. They include practices such as overuse of services and unnecessary treatments or procedures.
By analyzing medical billing data for waste and abuse—not just fraud—insurers can uncover wasteful spending without investing the same time and resources needed for a criminal investigation. Is it still necessary to investigate fraud? Absolutely. But there are also opportunities for a faster and better ROI on investigations by examining other suspicious behavior.
- Use broader industry data to identify unscrupulous providers
Fraud is an industrywide problem, not an individual insurer issue. But traditionally, many insurers addressed medical provider fraud individually. They’d analyze their medical bills and identify anomalies or coding issues and investigate accordingly.
But unscrupulous medical providers often spread their schemes across multiple insurers to avoid detection. And without visibility into a provider’s billing history with other carriers, the risk is difficult to recognize.
By analyzing aggregated medical billing data, insurers can get greater insights. They can analyze one bill from a provider against that provider’s billing practices across a broader spectrum of the industry to help identify fraudulent activity.
- Intervene early to mitigate exposure
Speed of detection is crucial. If you can identify evidence of suspicious activity around a medical provider sooner, you can take swift action to mitigate your company’s exposure. The longer the behavior continues, the greater its likely effect on your company.
That’s why technology like predictive analytics is so powerful. It can analyze a massive set of medical billing data to detect patterns and develop a risk score based on a provider’s behavior. This can forewarn insurers about suspicious providers before they become victims.
- Employ progressive strategies to change provider behavior
The more you know about a medical provider and their billing practices, the better you can be at not just discovering aberrant behavior but potentially preventing or minimizing it.
For example, antifraud solutions that provide reason codes identify specific behaviors that may warrant investigation. Insurers are using this information to adopt progressive intervention strategies. Some send letters to providers stating the specific issues they’ve identified with bills submitted and direct the providers to stop the behavior.
This strategy has helped change some provider behavior and reduce the amount of future billings to those insurers.
- Identify hidden connections and networks
According to a survey, 61 percent of insurers expected organized fraud to increase. Those fraud rings often involve medical providers in their schemes. That’s why it’s critical to examine providers at a network level.
Large schemes—those that can affect insurers’ bottom line the most—often involve groups of medical professionals, not just an individual provider. Insurers need to access data analysis that can find similarities and patterns among multiple providers, such as shared patients. Those are the investigations that not only help an insurer reduce exposure but can benefit the entire industry.
Streamline investigations with the right tools
Insurers can fight medical provider fraud in numerous ways, and all of them are important because it’s a complex issue that’s difficult to detect and costs insurers millions. When you add the time and expense associated with investigating medical fraud, it’s critical to find ways to improve efficiency, accelerate detection, and minimize exposure.
ISO MedSentry® helps insurers detect medical provider fraud, waste, and abuse quickly and efficiently. It analyzes aggregated industry medical billing data to uncover aberrant behavior associated with your claims. With access to this powerful tool, insurers can catch more fraud and reduce leakage from waste and abuse.
Tagged with: , , , ,