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5 Keys To Countering Claims Fraud

Proactive use of analytics, more sophisticated Special Investigation Units and cross-industry cooperation are among the essential strategies to help insurers stay ahead of the fraudsters.
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Centralize Data To Identify Fraud Trends

Medical billing is a multibillion-dollar problem for property and casualty (P&C) insurers in the United States. Even for legitimate claims, P&C carriers generally pay higher prices than health insurers for healthcare services to auto and workers’ comp claimants for a number of reasons. Among them: the absence of guidelines from the Centers for Medicare and Medicaid Services (CMS), inconsistent fee structures, internal insurer policies and procedures, and overall operational and procedural infrastructures that health insurers have in place.

The NICB Aggregated Medical Database (AMD) is filling the gap. Before the AMD, there was no centralized medical billing database for the P&C insurance industry. As a result, it was virtually impossible for auto and workers’ compensation writers to conduct strategic analysis exercises, search for fraud trends, identify new forms of medical billing fraud, and develop a baseline for medical billing.

The AMD consists of several parts. P&C carriers supply their medical billing data to Verisk Health (formerly HealthCareInsight, HCI), in some cases after a third-party medical bill review. After running the data through its proprietary fraud analysis engine, Verisk Health provides the results to the NICB where additional algorithms, developed by ISO, Verisk Health, and the NICB, search for suspicious activity, issue alerts, and trigger NICB investigations.

Based on the findings from analysis of AMD data, participating insurers can build stronger, targeted cases when medical billing fraud is suspected, and they can refer claims to the NICB for further investigation. Then, when a case is referred, the information and analysis available reduce the time needed for an NICB agent to investigate. The AMD thus provides scale where none has existed, making it possible to combat medical billing fraud broadly for the first time in history.

— Brian Smidt, Vice President, Data Analytics, National Insurance Crime Bureau (NICB)

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio

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