It has become more and more apparent, country by country and state by state, that many organizations do not have a clear grasp on what their exposure is to health care fraud. Whatever name it goes by – aberrant behavior, abuse, waste or fraud – and no matter how it is measured – in currency (dollars, euros, pound, etc.), volume, or lost time – it is clearly underreported.

What makes this lack of exposure more dramatic is not just the current exposure rates but also the lack of understanding about historic exposure.  By this I mean, how much negative behavior has been occurring, for how long, and is it still going on?

Case after case enters the media around health care fraud, many discussing fraud that has been active for five or more years.  One of the issues of concern is that much of the on-going historical fraud is collusive: involving more entities and translating to much higher costs.

So the question always comes to mind, “What other pre-existing fraud is there – and where is it hiding under the bed?”  This raises to light an interesting paradox: how does one calculate what they are losing and plan how to respond appropriately (staffing, policy modification, etc.)  if they don’t even know there is an issue – or, in this case, what the size of the issue is.

The situation leaves companies in the position where they really must look outside themselves to see what is happening not only in their immediate region, but in neighboring geographies or organizations as well. Understanding local and regional trends could really help a health care company understand how much fraud remains to be uncovered.

Unfortunately, many organizations appear to function as stand-alone entities, neither asking nor sharing any information they might have.  In some cases, their fraud information is seen by the organization as competitive advantage: if they can reduce more costs then their competitors they can have more aggressive premiums.  However, that argument has no substance when it comes to government agencies, or different geographies that don’t compete.

Either way, most organizations are not communicating simply because they never have in the past and have no process for doing so in the present.  Information sharing and improved empirical analytics would appear to be the most obvious means of first steps.  This all leads back to the issue at hand: how do organizations address the issue of not knowing what fraud is occurring, and subsequently, how much money is being lost because of it? The resulting concerns are obvious: if an organization doesn’t know about it, and doesn’t look for it, how much money are they losing?

Organizations have a number of options to potentially address these issues.  First they can participate in consortiums or become active in regional anti-fraud health care conferences.  Secondly, they can investigate technologies for health care fraud detection that analyze patterns empirically.  Lastly, they can become more communicative with other similar (potentially non-competitive) organizations.

There may be further options down the road. No matter how you proceed, it becomes important to look at the current environment in a new light and to make an active effort to understand what is actually occurring (and how much is it costing).  This enlightenment may significantly change how the fraud is viewed and what resources are being allocated.

Read more about techniques you can use to prevent health care fraud.