In an age where healthcare integrity is of the utmost importance, a coalition of industry pioneers and technological trailblazers must lead the charge in driving transformation to combat fraud, waste and abuse (FWA) in the healthcare sector.
As a focal point of discussion on day two of the 2024 BHF Annual Conference, Vusi Makanda, HFMU Deputy Chairperson, and Manager of Fraud Management at Bonitas, set the stage for an interactive discussion on these healthcare issues.
“Collaboration is paramount in addressing the challenges of healthcare FWA, evidenced by the erosion of trust and substantial financial losses highlighting the call for collective action,” says Makanda.
Dr Hleli Nhlapo, MD of the medical schemes division at Dental Information Systems (DENIS), echoed Makanda’s sentiments. To this end, Nhlapo set the scene on the current state of FWA in the healthcare industry, suggesting that it exerts unnecessary pressure on resources while undermining trust between stakeholders.
“Perpetrators are employing increasingly sophisticated tactics, leveraging technology and syndicates to orchestrate large-scale schemes, while regulatory delays and prosecutorial challenges hinder effective resolution,” says Nhlapo. “Despite this, collaboration among healthcare funders has emerged as a crucial solution, with recent initiatives indicating a promising shift towards industry-wide cooperation in addressing these complex challenges.”
Following Nhlapo’s address, Roxane Ferreira, Head of Department at the Association of Certified Fraud Examiners (ACFE), alluded to several global trends in FWA that are plaguing the global industry.
The impact of these is extensive and has led to concerning financial situations for healthcare systems around the world. So much so that Ferreira’s insights suggest that in the United States, it is estimated that as much as $68 billion is lost every year on the back of FWA.
“In South Africa, the problem is not much better, with between R8 billion and R13 billion being lost annually to this. With between 15-35% of all claims submitted regarded as being fraudulent or abusive, the plight is adding approximately R22 billion to the cost of private healthcare,” adds Ferreira.
Healthcare fraud is perpetrated by a variety of actors within the system, ranging from medical scheme staff to service providers and even syndicates. These perpetrators exploit vulnerabilities at different points in the healthcare process, whether through falsifying claims, overbilling or engaging in other deceptive practices.
Moreover, medical scheme members themselves, as well as patients, may also be complicit in fraudulent activities, while brokers and manufacturers can also play a role in facilitating these plans.
Ferreira highlighted the multifaceted approach employed in identifying healthcare fraud, citing that 70% of cases stem from tip-offs or received information, while the remaining 30% are uncovered through data mining, audits and investigations.
“Healthcare fraud encompasses various deceptive practices,” suggests Ferreira. “ Some of the most common ones include merchandising, where pharmacies sell non-healthcare merchandise, but claim for a healthcare service; false claims by claiming for services rendered; ATM scams where doctors submit false claims and provide cash to patients; card farming where members lend their membership cards to non-members; code gaming that involves doctors manipulating billing rules to increase revenue; and lastly, the hospital cash plan fraud that entails doctors and members colluding to arrange unnecessary hospital admissions.”
In response to the escalating challenges of healthcare fraud, Ferreira adds that the sector is increasingly turning to innovative solutions, with the integration of Artificial Intelligence (AI) emerging as a pivotal strategy.
“AI technology offers the capability to analyse large volumes of data rapidly and accurately, enabling the identification of suspicious patterns and behaviours,” she says. “By leveraging AI algorithms, healthcare providers can proactively identify questionable activities, thereby safeguarding resources and maintaining the integrity of healthcare systems”
Using these advanced algorithms, AI can swiftly identify irregularities, such as sudden spikes in billed procedures and visit rates. Furthermore, it can compare billing practices, verify purchases, compare the geographical location of a patient against the practice, and treatments billed for the same or similar treatment by other practices.
In the fight against healthcare FWA, collaboration and technological innovation are emerging as critical pillars. By harnessing advancements such as AI, healthcare systems can effectively detect and prevent fraudulent activities, thus safeguarding resources, upholding the integrity of patient care and rebuilding trust.
