The Affordable Care Act (ACA) has provided millions of Americans an opportunity to get health insurance and has generated positive benefits for insurers, as well. However, the way that people now purchase health care plans through online health care exchanges has opened the gate for new types of fraud in which brokers and individuals can partake. These emerging schemes are costing insurers millions of dollars, mainly in losses associated with illegal claims payments, broker commission payments and legislative fines.
While legitimate brokers offer useful services, the very existence of health care exchanges has greatly reduced the need for them. This shrinking demand has forced some unscrupulous brokers to turn to fraud to maintain income levels. The most common approaches taken by brokers in committing fraud are to:
- Enroll non-existent individuals using fictitious information
- Facilitate enrollments using information of deceased individuals
- Enroll minors without proper parental authorization
In contrast, members who commit fraud to get insurance take advantage of the fact that the process is completely electronic. Fraud detection in these cases is made more difficult as individuals remain hidden behind cyber walls.
Whether enrollments originate from an individual or a broker, the key to detecting fraudulent applications is the ability to analyze and verify the enrollment data being submitted. That’s where public records data and identity analytics come in.
Powerful new technology exists that combines the two, enabling organizations to compare exchange enrollment data to vast amounts of public records to authenticate identities and verify the accuracy of the identity associated with the enrollment. This also allows organizations to score and rank the suspected fraud to prioritize the cases for further investigation, enabling them to ”stop the bleeding” before the exposure to their organization expands.
Fraudsters will always find new ways to exploit the system, and the new health care exchanges are just another new system to exploit. Health care organizations need to stay a step ahead of broker and member exchange fraud. With organizations suffering millions of dollars in losses, the use of data analytics tools for fraud prevention is a powerful treatment, and a treatment we can’t afford to do without.