Much like a cancer, healthcare insurance fraud is a silent killer.Even with just a handful of alleged fraudulent insurance claims, the resulting financial losses are staggering — reaching up to tens of billions of dollars per annum, according to the National Health Care Anti-Fraud Association (NHCAA).
Healthcare fraud is a very real problem in the sense that it ultimately places the resulting burden on the shoulders of patients, who should be taking advantage of their healthcare benefits. Not only do fraudulent claims end up increasing the cost of providing employee insurance benefits, but they also open the floodgates to further suffering on the patients as well: identity theft, unsafe or unnecessary medical procedures, and an increased difficulty in acquiring healthcare insurance in the first place.Unfortunately, one of the trickiest aspects in tackling healthcare fraud is the inherent difficulty that comes with actually spotting it.
Healthcare fraud is far from being an epidemic at this point. After all, it is only committed by a handful of deceitful and opportunistic healthcare service providers. However, its effects are nevertheless devastating. These deceptive providers’ access to classified patient information, data on potential medical conditions and treatments, and billing capabilities allow them to commit fraud on a level that will inevitably damage the credibility of legitimate medical providers and endanger the system as we know it.
To better spot healthcare insurance fraud, familiarity with the ways in which it typically manifests is critical.
The most common types of healthcare insurance fraud
1) Dishonest billing
Fraudulent providers typically bill patients for services they never even delivered, or at a higher rate than the actual procedures’ cost. This is made possible through their aforementioned access to patient data. This information allows them to charge for nonexistent or unnecessary treatment or services, under the guise of treating a more serious or underlying condition suffered by the patient. This practice is known as upcoding, and it may be more common than most people realize.
2) Falsifying the patient diagnosis
Falsifying diagnoses allows further medical tests — and thus, further expenses — to be imposed on patients, even though their diagnosis isn’t really as serious, or shouldn’t lead them toward taking tests, surgeries, or any other medical procedures deemed unnecessary based on their real condition.
Simply put, this type of healthcare insurance fraud involves medical practitioners and patients receiving under-the-table payment for patient referrals.
Signs of medical insurance fraud
Medical insurance fraud isn’t always easy to spot, as some attempts are simply more blatantly obvious than others. There are, however, observable signs that may tell patients and payors alike that things are amiss.
Here are 3 of the most common indicators of medical insurance fraud.
1) Incorrect information on the patient’s record
Inconsistencies on the Explanation of Benefits statement can be major clues that point towards insurance fraud. Even a mistake that can be dismissed as a typographical error — such as an incorrect date — could be a sign of fraud. On the other hand, if a service that the patient didn’t receive ends up being listed there, it definitely needs to be reported. Patients are advised to track their doctor visits, paying specific attention to the services they actually received and the dates they went.
2) A loaned insurance card
Another instance of fraud is when a patient’s insurance card is used by another person to obtain healthcare that they aren’t supposed to have access to. An example would be if the patient lent their insurance card to a relative or friend, assisting them in illegally obtaining medical care. If the patient keeps someone listed on their contract (such as an ex-wife or ex-husband) and enables them to take advantage of medical care they aren’t entitled to, that also counts as fraud.
3) “Free” services from healthcare providers
Some healthcare providers may claim to offer free services or waive patients’ copay, when in fact, they end up charging the insurance company more than they’re supposed to. Sometimes, they may even list services that the patient didn’t receive as part of the services they supposedly provided, just to increase their claim way above the real cost.
Fortunately, more effective fraud detection using AI solutions is now possible. Advancements in technology allow for the development of programs capable of grouping similar scenarios and claims, identifying potential predictors of fraud, creating lists based on analysis, and even continuously learning and adapting to newly received data. The best part is, this technology can be harnessed by health payers as a powerful preventive measure against fraud.
Healthcare fraud hurts both patients and providers alike. It’s high time for healthcare insurance fraud to be dealt with summarily — and AI solutions could very well be the panacea that the healthcare industry needs to cure this industry ill for good.