Blockchain technology and payment integrity in health care

Blockchain technology has arrived in the health care space, bringing anticipation of revolutionary change in operational efficiency, data management, security, fraud prevention, disease prevention, and perhaps even in payments.

While these are not new goals, I am ever the optimist. As almost every article on blockchain technology points out, the technology itself promotes breaking down “data/process silos” and adoption of a process-wide, end-to-end view of transactions. This is truly great news for enterprise analytics platforms, for payment integrity, member cost management, and for health care fraud detection!  I’ll return to the payment integrity focus in a moment, but first a (very) brief explanation of blockchain technology.

What is blockchain? And how can it be used in health care?

Blockchain is the technology architecture on which Bitcoin and other cryptocurrencies are built. When blockchain is used in an health care setting, each event in a transaction’s life cycle generates a new “block” of information that is complete, permanent, cryptographically signed and cannot be modified, reversed or adjusted. One such event might be a medical record update, preceded by a primary care physician visit. These blocks are “chained” together chronologically.

In the case of Bitcoin, the blockchain is public, in that anyone can view the history but not the actors. In health, the blockchain would likely be private, meaning that an invitation is required to examine the chain. For example, the scope of the invitation might be defined by a payer, its members and its contracted provider network. Fortune Magazine ran a good introduction to blockchain, and for a more health IT-focused view, check out How does blockchain actually work in healthcare? via HealthcareITNews.

How can blockchain reduce fraud in health care?

The opportunity to leverage blockchain to detect improper payments and health care fraud could be huge. Having the entire transaction, medical record, and more, at hand allows the application of advanced analytics methods for member cost and chronic condition management as well as for prediction, overpayment detection and fraud detection from the same, verified set of data. It also opens up the potential to employ machine learning to detect dubious activity prior to payment.

Because all of the components (blocks) of the transaction are validated and signed, they serve as reliable input data to analysis. For example, it is possible to determine if the medical record and visit notes support the specific procedure coding on the transaction. This may take the form of rules-based, specific justification. Alternatively, the record may be used in predictive analysis to either support the likelihood a specific condition is present, or to question the billing if it departs too much from treatment usually associated with the particular condition.

Is blockchain foolproof?

There are so far no reports of blockchain technology being compromised, although it is still possible for the originator to submit a fraudulent health claim. It is also possible that the originator’s account can be hacked. Reportedly between one and three percent of Etherium and Bitcoin users report their accounts have been violated via typical identity theft methods, for example.

Other health care use cases illustrate the potential for leveraging the data from “on chain” transactions, such as:

  • Provider credentialing, enrollment and network management.
  • Payment process management.
  • Plan/benefit design and the pre-sale quotation process.s
  • Member eligibility and enrollment in Medicaid MCO (and Exchange plans).
  • Chronic illness prediction and condition management.

From patient outcomes to payment integrity, blockchain heath data lends itself well to the application of analytics that can deliver insights in near real-time to transform health care. Time will tell if we can seize the opportunity, but the optimist in me believes it will happen.


About Author

Ben Wright

Sr. Solutions Architect

Ben provides support in planning, marketing and implementation of health fraud detection, investigation management and payment integrity solutions for the State Government and Commercial Health markets. Ben has worked in pre-payment fraud detection, data analytics, and payment integrity process support for more than 20 years, and has a total of 42 years of commercial health payer IT experience. He has used SAS software since discovering SAS Graph in 1980 and shortly afterward, finding an IBM 3287 color printer.

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