Fraud is defined as an intentional deception or misrepresentation made by a person or an entity, with the knowledge that the deception could result in unjustified enrichment for that person or entity. The size of the South African healthcare sector and the enormous volume of money involved make it an attractive fraud target. Not only are the financial losses to the healthcare industry a great concern, but fraud also hinders the South African healthcare system from providing excellent quality and affordable care to legitimate patients. Therefore, effective fraud detection and prevention is important for improving the quality and reducing the cost of healthcare services. Although the vast majority of service providers are honest and ethical, the few dishonest ones [and very often the medical scheme members] commit fraud on a very broad scale, thus causing great damage to the healthcare system. It would be in the best interest of the service providers who behave ethically to encourage the medical schemes they contract with or work with on a regular basis to band together and collaborate with the rest of the industry.
In an industry constantly facing new and emerging trends, prevention of healthcare fraud, waste and abuse demands evolving methodologies. While there has been an increase in efforts to detect healthcare fraud, there is still considerable room for improvement. The next level in fraud detection requires the entire healthcare insurance industry to come together and that is something that has not happened to its full extent in Africa yet. Certain of the role payers continue to function in silos. Healthcare insurers need to combine their claims data to support the detection of unusual claiming patterns only discernible in an industry satellite view. This is because there are healthcare and policy holder behaviours that will become clearer only in collective data analysis. Collaboration through a collated claims data approach to identify these patterns is the next generation of fraud detection and prevention.
What will the collective data analysis be able to identify?
Many types of fraud and abuse cases will emerge when viewed from a satellite perspective. For instance, one will find that a healthcare provider has been billing about ten hours for consultations per day for each of the medical schemes. Within each silo, this is not unusual, but when one begins to collate the data of the various medical schemes it will become apparent that the claimed hours of work across the healthcare insurance industry are more than there are hours in one day.
The use of collective data analysis has the potential to transform business. A unified approach can help role players in the healthcare insurance industry to measure and therefore manage more precisely than ever before, allowing them to:
- Make better predictions
- Make more informed decisions
- Target more effective interventions
It is well known in forensic circles that when one medical scheme is targeted by fraudsters and this is detected and addressed or sanctions are imposed, the perpetrators simply shift their activities to another medical scheme. There have been collaborative efforts in some quarters of the industry, but the problem is that these initiatives still do not enjoy a completely unified approach since not all role players are participating.
While there is certainly room for more co-operation among healthcare insurers, using an independent third party brings a different angle to collating claims data. Independent third parties can be uninvolved in the day to day business of medical schemes, so you won’t come up against issues around the size of medical schemes and what they stand to lose or gain. Using independent third parties can also help improve the quality of the data collected. While data held on an industry-funded hub can only be as good as the information supplied by the medical schemes, a third party’s business survives on the strength of its data, giving it an additional incentive to ensure its data is accurate and delivers benefits to its customers. A further benefit of working with a third party is industry specific expertise, neutrality and protection of confidentiality.
There should be no issues around competition; quite simply, the more data you can share and the more parties from the healthcare space who participate, the more benefit will be derived from such an initiative.
Author: Lynette Swanepoel – Stop-It.co.za