Online claims and benefits fraud

Fortunately, increased use of online claiming brings a greater ability to automate the processes for red flagging, researching and tracking the misuse and abuse of benefits.

According to Diane Geddes, associate manager, health and dental quality and integrity services, at Great West Life, “Electronic online claims submission is becoming more popular with claimants and providers alike. This, in turn, has forced insurers to expand and modify the ways in which they review data for inconsistencies. At the same time, system enhancements allow for more automated claim processing, thereby enabling our investigative teams to constantly define and refine system rules so concerning patterns and trends are spotted more quickly.”

Investigative teams adapting
Insurance teams dedicated to catching and reducing fraud have had to adapt their skill sets as a result of online claiming. Automated analysis and tracking of online claims offers insurers a higher degree of—and easier access to—collected data. This, in turn, means insurers can now drill down with greater precision for deeper data analysis. From there, they can insert additional rules to red flag questionable claims and collect evidence to support possible allegations of fraud or abuse. Of course, an insurance company’s investigative and online software development teams need to understand what they are looking for before even writing the rule. And, certainly, once the data is in front of them, they need to understand how to spot inconsistencies.

According to Geddes, “By first understanding how misinformation is supplied on paper—as well as the norms for that type of claim—investigators can then apply that insight into how the same practice might manifest itself through patterns illustrated in the collected online data.”

New and unique developments
Perpetrators’ basic activities have remained consistent over the years: exaggerating illness or injury; obtaining multiple prescriptions; maintaining eligibility when it is no longer in effect; submitting false claims; claiming for services rendered by providers who are not registered to perform those services; billing for services that are not medically necessary, not rendered or stated as more expensive than they actually were; and billing for non-covered services disguised as covered.

But as our world has rapidly evolved, so too have new tricks. One is the use of false advertising through social media. For example, one might see an ad on Facebook that says “Visit us! All services covered by insurance!” While this isn’t any different than false advertisement in a poster or newspaper, it is a new channel to a much wider audience.

Another new trend is identity theft—but not in to the traditional sense of stealing an identity to access an individual’s assets; rather, in this context, it is to falsely pose as a service provider. With personal information more readily available than it was in the past, fraudsters may attempt to take a provider’s identity and submit fake claims under the provider’s name, address and provider registration number.

One health and dental benefits carrier, at least, has a process in place to help tackle these issues. Tony Petta, director of claims administration with Green Shield Canada (GSC), says GSC has a national provider registry. Because GSC’s online claiming is undertaken largely by service providers (it is the service provider who submits a claim on behalf of the claimant), GSC is “able to insert more automated audit features targeted to providers,” says Petta. “Not only that, but since our provider registry enables us to constantly rate and adjust a provider’s status, we can more easily alter the manner in which a claim is adjudicated. For example, a provider’s status could be anywhere from ‘excellent’ to ‘conditional’ to ‘failed’ with many variations in between. We can even decide whether or not claims from a particular provider will always be subject to careful, individual scrutiny by simply inserting the rule ‘manual adjudication only.’”

Can’t evaluate success on dollars alone
It’s not the size of the recovered or restituted funds that should determine the success of an insurer’s efforts to manage fraud. Even small fraudulent cases nipped in the bud reflect an effective system. Catching relatively minor instances of abuse demonstrate a fraud department’s success because those instances did not become greater crimes. Big police investigations and arrests may gain media attention, but insurers are particularly proud when they prevent small fraudulent activities from becoming catastrophic.

Going forward
The channel for the crime is also the mechanism for the solution. Even though fraud and abuse manifest themselves online, it is the online claiming system itself that is one of the best tools for catching fraudulent activity. According to Alex Popovic, assistant vice-president of operational and fraud risk management, finance, with Sun Life Financial, “Technology is wonderful. We invested a great deal in building technologies to detect fraud and manage abuses. Aside from our ability to accept claims online, we can also take paper claims and convert them into electronic data. Then our cross-functional team of investigators will mine that data for trends, inconsistencies and history. This has been a great advantage and tool for our investigative team.”

In short, insurers continue to do their best to ensure crime does not pay.

To report fraud, contact the Canadian Health Care Anti-fraud Association.