For any non-product related queries, please write to info@perfios.com.
For any non-product related queries, please write to info@perfios.com.
The Indian health insurance industry has been experiencing stellar growth fueled by pandemic-driven demand shifts, the availability of digital products, and increasing disposable incomes. Indeed, according to Avendus Capital’s study, India’s retail health insurance market will be worth $25 billion in five years, catering to 250 million individuals.
However, this growth hasn’t come easy, with the insurance industry experiencing a corresponding rise in fraud, waste, and abuse (FWA). A Deloitte Survey reports that around 60% of insurance companies have witnessed an increase in insurance fraud on account of increasing digitization and the post-pandemic weakening of operational controls.
FWA can be particularly damaging to health insurers, adversely impacting their profitability, reputation, and financial soundness. For instance, if a group submits false claims, resulting in fraudulent payouts, the insurance company may recoup its losses by raising premium prices going forward, harming honest insurance seekers. Moreover, aren’t we already privy to instances of insurance companies denying far too many claims lately?
So, in this article, we will outline the concept of fraud, waste, and abuse (FWA), the challenges to FWA investigation, and how Perfios’ PerSeive helps mitigate them.
FWA has been marring the fortunes of the insurance industry, excessively draining government finances, and providing inadequate coverage while raising out-of-pocket expenses for policyholders.
Fraud in FWA refers to the intentional and willful attempt at deception to obtain unentitled financial advantages from insurance policies. Some of the common practices include:
● Falsifying medical diagnosis to justify insurance coverage and claims.
● Submitting false claims and fictitious bills for treatment procedures.
● Upcoding, i.e., billing costlier services in place of the treatment actually performed.
● Charging for procedures and services that were not rendered.
● Unbundling, i.e., charging a single procedure as distinct parts.
● Providing services unnecessarily or charging for free services.
● Impersonating as someone else to avail of health claims.
● Misrepresenting treatment availed to pay for expenses originally not covered by the insurance, like a cosmetic treatment.
Waste denotes the unintentional overuse of services, which raises the cost of the treatment provided. It usually takes the form of excessive diagnostic testing and the overprescription of medication. Similarly, abuse indicates improper service usage without any ill intent. Examples include billing for branded drugs when generics can be prescribed and misbilling services rendered.
Given the risks associated with FWA: higher premium costs, lower access to essential services, poor insurance company financials, and undermined public interest, carrying out extensive investigations to prevent fraud in insurance has become imminent. The process, however, is complex and entails the following challenges:
● Data quality and fragmentation issues that prevent the creation of a holistic view of the insured’s medical history and the deployment of advanced analytics.
● Limited expertise and usage of automated risk management tools that help identify fraudulent, wasteful, and abusive activities.
● Striking a balance between conducting thorough investigations and maintaining sensitive data security, confidentiality, and privacy for fraud tracking.
● Siloed organizational responses and lack of information sharing among different insurance companies.
● Deployment of sophisticated, hard-to-trace methods, including treatment code manipulation, forged, inflated medical bills, and collisions with healthcare providers by insurance fraud perpetrators.
Addressing these challenges requires data centralization, strengthening of investigative capabilities, predictive FWA analytics usage, and a collaborative approach. Perfios FWA solution, “PerSeive”, does this and more.
Perfios PerSeive detects fraud, waste, and abuse (FWA) for health insurance companies, assisting them in saving millions in fraudulent claim payouts. The main features of PerSeive are listed as follows:
● Auto-analysis of all the medical documents and records submitted by the patient to improve data quality.
● Medical, drug, and provider rule matching for effective monitoring and tracking.
● Detection of fraudulent activities involving overcharging, upcoding, unbundling, and blacklists.
● Identification of cost outliers, including instances of excessive, missed, and unnecessary treatments.
● Red flagging of fraudulent, wasteful, and abusive insurance claims.
Perfios PerSeive offers several compelling benefits that make it a must-have for insurance companies seeking reliable and efficient FWA detection solutions.
● 100% accuracy in digitization and analysis to ensure users’ data is processed flawlessly.
● Straight-through processing capabilities that eliminate the scope for manual intervention.
● Complete adherence to industry regulations and generation of 100% error-free and compliant results.
● Robust FWA detection processes that proactively and timely detect suspicious activities.
● 5X reduction in fraudulent insurance payouts that helps save costs and safeguard operational and financial integrity.
The surge of fraud, waste, and abuse (FWA) in health insurance necessitates immediate action to stem the flow of fraudulent payouts and protect the integrity of the healthcare system. While the government has been taking several steps, such as introducing the Bima Sugam platform to simplify claims processing and advance its cause of “Insuring India by 2047”, there is scope for more. Health insurance companies must improve their operational systems, deploy stringent risk management tools like PerSeive, and follow the highest data security and privacy standards to rein in FWA and improve their business fundamentals.
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