James Ruotolo is an insurance fraud technologist, thought leader, and the principal for insurance fraud solutions at SAS. He may be reached at James.Ruotolo@sas.com.
The recent announcement by the Department of Health and Human Services and Department of Justice to form a National Fraud Prevention Partnership to address healthcare fraud is a step in the right direction. It’s good to see industry groups such as the National Insurance Crime Bureau (NICB), Coalition Against Insurance Fraud (The Coalition) and National Health Care Anti-Fraud Association (NHCAA) standing side by side with health and p&c insurers, as well as government agencies.
NHCAA’s SIRIS database is a repository to share similar information for healthcare insurers. It hasn’t gained as much traction as other projects, but the approach is sound. NHCAA and NICB have been in discussions for quite some time regarding how to better share these details between healthcare and p&c industries.
Steps in the Right Direction
NICB is gradually shifting priority from its historical focus on auto theft and physical damage claims to medical fraud. The Aggregated Medical Database program is a huge leap forward in addressing the challenges of medical insurance fraud for the p&c industry. By pooling medical billing information, NICB can produce MedAWARE Alerts to notify member companies of emerging patterns of fraud or suspicious actors.
Analyst Stephen Applebaum of Aite Group agreed. “Now let’s just hope that this well-meaning initiative doesn’t get bogged down in bureaucracy and competitive issues,” he said. “While industry experts believe the concept is a good thing, there are concerns. Let’s also hope that the eventual costs of setting up and operating a program of this scale do not consume too large a share of the amount of money budgeted to uncover the fraud that the program will eventually help to prevent.”
Leveraging Big Data
All this information sharing is bound to be a good thing when it comes to fraud detection and prevention. But a major key to success is how the shared information is analyzed and how insurers and government agencies can consume the results in the form of useful intelligence. While putting the data together is a monumental effort, it is arguably the easiest part of this program.