Mitigating Fraud Risk for Payers
Payers face a constant challenge of providing payment for services quickly to meet patient and provider expectations while also keeping fraud, waste, and abuse low. Insurance fraud numbers are wreaking havoc with public and private coffers. The Justice Department reports that it has recovered more than $5.6 billion in fraud during 2011, including $2.9 billion in healthcare fraud. Of the $15 billion in total fraud recovered since 2009, $8.4 billion was in healthcare.
Payers need secure, reliable methods to identify entities and individuals and assess their probability of being fraudulent.
Confirming an individual identity involves reviewing applicant-provided information for data inconsistencies and irregularities. Fraud mitigation works to diminish use of invented identities, covers, or “fronts.” Fraud mitigation is centered on the concept of stopping fraud before it begins. It rates the likelihood of fraud from a certain identity based on a careful review of the data given. Some ways of recognizing fraudulent identities before payments are made include identifying multiple uses of the same name or address, checking for data that has been reported as belonging to a deceased person, and validation of Social Security number and driver’s license formats, as well as more complex analytics.
Payers also need to verify the legitimacy of provider entities – a clinic vs. an individual doctor – and confirm the relationship between the business and the principal guarantor or other authorized representative of the business. To avoid fraudulent billing payers need to know that entities are legitimate providers and licensed to deliver the services in question.
Usually, checking the legitimacy of an entity is a time-consuming, manual process, especially when tracking local offices or smaller organizations. Many payers go through a standard list of sources, such as a local chamber of commerce or even Google maps, checking up on each provider organization.
A better way is to use an automated check on a combination of data points to discern if an organization is a valid business. Name, address, telephone number, Federal tax ID, and financial data distinguishes not only the actual physical location of the business but can also recognize potential fraudulent activity. Searching against multiple identification databases can uncover discrepancies in the most important identity elements, giving greater assurance that the business is the correct entity and is not fraudulent.
Fraud mitigation techniques must balance the intrusiveness of identity verification questions for legitimate patients and providers while also keeping out fraud based on synthetic identities.
Contact us to learn more about ways to use data sources, analytics, and methods of interacting with providers and patients to ensure a high fraud detection rate while also processing and paying claims in a timely and straightforward manner.