Three types of medical claims fraud that are costing property & casualty insurers billions

Medical claims fraud, waste and abuse is a fast spreading epidemic.

Fraud losses are in the hundreds of billions of dollars — and these losses are driving medical and health insurance costs to unprecedented levels. This trend is likely to continue because managed health care regulations have resulted in decreased revenues for health care providers and motivated many of them to engage in illegal methods of recouping income losses. While the schemes and methods for committing medical claims fraud abound, most of the techniques used by health care providers fall into one of the following three fraud categories:

No. 1: Information falsification

While falsifying information is less common, it is the most deceptive method as it involves outright lies. Faking treatment codes, making claims on non-existent patients and billing for phantom services that were never rendered are among the unscrupulous actions that fall into this fraud type category. Among the three core fraud types we're reviewing, falsified information is typically the easiest to detect because the inconsistencies and anomalies are blatant and usually very distinct. With the right data technology in place, this type of fraud can be spotted using simple screening.

No. 2: Questionable practices

This fraud category contains techniques that are much more common and difficult to detect. Questionable practices include tactics like:

• • • Upcoding — Billing payers using CPT codes associated with services that are more expensive than those actually performed.
    • Unbundling — Inflating owed amounts by billing individual codes for services that are supposed to be grouped together and cost less.
    • Mis-prescribing — By prescribing the wrong (and more expensive) treatments or medications, or by over prescribing treatments and medications, this method not only creates monetary losses, but also threatens patient health and safety.

Additional methods, like clustering and underutilization also fit into this category.

No. 3: Overutilization

Overutilization tactics are the most frequently used, the most costly to the industry, the most dangerous to patients and the most difficult to detect. These techniques include ruthless, reckless fraudulent activities like:

• • • Intentional misdiagnoses
    • Unnecessary treatments and procedures
    • Unnecessary durable equipment
    • Unnecessary visit frequencies

In order to help insurers address the fraud problem, LexisNexis Risk Solutions claims experts have developed an interactive white paper, Advanced Data and Analytics for Property Casualty Insurance — the Cure for the Medical Provider Claims Fraud, Waste and Abuse. Within, readers can explore how powerful new data analytics can empower insurance companies to detect, investigate, and deter potential fraud.

By viewing this interactive whitepaper, you will:

• • • Understand why property casualty insurance carriers must move beyond the traditional “bill review” approach to address medical provider fraud, waste, and abuse
    • Discover a strategy to more effectively uncover and fight medical provider fraud

Follow this link to view the Interactive Whitepaper.