Introduction

I am often asked to speak about the role of AI and analytics in managing Health Fraud Waste and Abuse. Having run an investigation and audit team for over two decades, I know that analytics and AI are powerful tools for investigation teams and can increase productivity significantly.

The Power of Analytics in Fraud Detection

Claims assessors look at the claim in front of them and use that information to assess whether to pay, reject or request more information. There’s nothing wrong with that – that’s what the job entails. But it misses part of the picture.

Analytics systems can look at claims but also examine the context of the claims – for example the provider and patient’s history and, by doing so, they can identify trends and patterns which a human simply cannot see. They can apply hundreds of rules and algorithms systematically and methodically without making mistakes. A simple example of such a pattern, would be a clinic which always claims for the most complex surgery – perfectly justifiable on occasion but implausible if it happens all of the time. Some patterns, however, are much more difficult to spot. I have seen alerts showing that identical claims have been submitted in different parts of the country on seemingly unconnected policies. The last time I saw such a pattern; it turned out to be a significant organised fraud. Last week, I was looking at alerts showing that certain brokers appear to be associated with unexpectedly high levels of early claims on group policies – this of could simply be bad luck but might also be an indication that unconnected people are being added to non-underwritten corporate policies to allow them to claim for pre-existing conditions – something that does occur and is often missed. These sorts of patterns are invisible to claims assessors.

Why Analytics Alone Isn’t Enough

It’s important to understand that analytics systems, however impressive they may appear, are ultimately a tool not a solution. To generate savings, users of analytics tools also need to

1. Understand the issues that have been highlighted.
2. Have the capability and capacity to investigate and to create a strategy to deal with the issues.
3. Have an infrastructure of rules and a legal framework to realise the savings.
4. Have an appropriate management mandate to pursue the matters identified.

Without this human element, the strategy will fail. If all these enablers are in place, a return on total investment in anti-fraud waste and abuse measures can deliver a return on investment of over ten times.

The Rise of Telemedicine Fraud

As insurers embrace technology and digital products, it is worth remembering that healthcare providers are also doing so – sometimes for good reasons but technology can also be an enabler of fraud. If you, like me, read the US Department of Justice press releases, you will not have failed to have noticed a recent trend – the growth of telemedicine fraud. I have linked to one case but there have been many.

The rapid growth of telemedicine has created new opportunities for those who wish to misuse health funds. In our experience, whilst insurers are alert to the real advantages of telemedicine, they are far less informed about the risk.

As a medical student, I studied the work of the late John E Wennberg – a US health economist who showed that many classical economic theories do not hold true in healthcare. A particularly important finding in his research was the fact that the supply of healthcare services actually drives demand. While it was not an issue in John Wennberg’s day, telemedicine is uniquely likely to do this. It lowers the barrier to the consumption of healthcare resources, removes the inconvenience of having to attend a doctor’s surgery and allows services to be provided from almost anywhere.

How Telemedicine is Being Exploited

Virtual consultations are attractive to some patients especially if the cost can be passed to an insurer. This effect can be enhanced by the operators of such services, and we have seen examples where telemedicine services have deliberately inflated costs by:

1. Providing unnecessary services. Consultations which are not needed or inappropriate consultations for conditions which cannot be assessed remotely.
2. Over-use of investigations to compensate for the risk arising from the doctor not being able to examine the patient creating a false economy.
3. Provider–initiated contact – where a telemedicine provider proactively calls a policyholder and then bills as a consultation. Perhaps to give test results, which is possibly justifiable, but I am aware of cases where administrative calls, even chasing bills, are billed as consultations.
4. Provider–induced contact. This is where contact is initiated by the patient but encouraged by the provider. One such example I saw was an email sent to users of a telemedicine service which said, “Are you feeling tired… did you know this could be a symptom of illness such as diabetes …. call us now for reassurance”

Perhaps most worrying of all are the poor-quality clinics that thrive behind the anonymity that telemedicine provides. Pharmacies which prescribe drugs without proper assessment and worst of all, clinics that give patients whatever diagnosis they want. The BBC recently exposed clinics which gave a diagnosis of Attention Deficit Hyperactivity Disorder using only a cursory assessment leading to life-long drug treatments. I have seen this in other areas – weight loss clinics, rubber stamping access to Ozempic and clinics giving a diagnosis in the most sensitive areas, such as gender dysphoria, without a proper assessment. The rapid growth of telemedicine has outpaced regulation. There are many lessons to be learned from the recent case of the now insolvent Babylon Health.

Conclusion

Digital analytics have revolutionized fraud detection, making it possible to identify patterns and anomalies that would be impossible for humans to detect. But to use this information effectively a company needs to have an effective investigation team in place and get even smarter to keep up with telemedicine fraudsters.

If any of the items in this short briefing are of interest, or you would like to know more about how Kirontech assists users in combatting fraud waste and abuse, we would be happy to discuss this further and you can contact me using the link below:

Dr Simon Peck
Kirontech Limited