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Partnering for fraud prevention

More focus aimed at eliminating some of the massive medical fraud directed at the p&c industry.

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 (CAIF) and National Health Care Anti-Fraud Association (NHCAA) standing side by side with health and p&c insurers, as well as government agencies. For too long, the insurance industry has struggled to share information effectively to combat fraud. Yet all the while, as NICB president Joseph Wehrle told the audience at a recent industry conference, “Fraudsters don’t discriminate. They will take money from anybody.”

Sharing information works

There have been many successful examples of how information sharing can help thwart insurance fraud. Fraudulent medical providers seldom discriminate when selecting their victims and equally target auto insurers, workers’ compensation carriers, health payers, and government programs. Some of these groups have already shown that when insurers share information, they all glean better intelligence about these organized fraud schemes.

NICB has long acted as an industry clearinghouse for p&c companies to share information on suspicious claims and interface with government and law enforcement agencies. Most companies that participate in NICB’s medical fraud taskforces throughout the country cite information exchange as one of the primary benefits. NICB proactively culls claim information, looking for patterns, and then notifies the industry via ForeWARN Alerts and other communications.

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.

The newly announced partnership presumably will expand this concept across p&c, healthcare, and government agencies. Certainly, aggregating data from these groups will yield interesting results.

Dennis Jay, executive director of the Coalition Against Insurance Fraud, said, “Private insurers and the federal government have operated for many years like they each have their own distinct set of crooks defrauding them. We know that medical providers defraud both. By teaming up and sharing data and intelligence, more fraudulent schemes will come to light and likely be detected much earlier.”

For years, the bad guys have benefited from the disjointed approaches taken to detect fraud scams. It appears that is about to change.

NOTE: Originally published by Property Casualty 360.

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