COVID opens door to pervasive healthcare fraud

Ooo, shiny. Don't get distracted by new forms of healthcare fraud. Fraudsters haven't stopped using the old ones. "Very shiny objects" by tonydolor is licensed under CC BY-ND 2.0

It's easy to get distracted by new developments in the fight against healthcare fraud. New services. New providers. Relaxation of rules. The COVID-19 pandemic has quickly revolutionized the healthcare landscape. For instance, the government made sweeping regulatory changes to accommodate a surge in patients. Healthcare delivery and payment organizations, commercial and government have all had to pivot in response to these changes.

Different provider types can now provide previously disallowed services. Telehealth is frequently replacing in-person provider visits. Rules related to payments have changed, and as those who work in healthcare can attest to, change within these organizations tends to happen slowly. Rapid changes and slow reactions have thrown open the door to fraudulent activity. Case in point – overbilling.

Fraudsters on the over hand – they can move at breakneck speed to take advantage of the changing times. Fraudsters have a clear advantage. They don’t have to abide by policies, rules and procedures. They are nimble and can quickly seize an opportunity like the pandemic.

Thought not healthcare, a good example of fraudster's cat-like reflexes involves the Payroll Protection Program (PPP). On April 3rd, 2020, the US Small Business Administration launched the PPP, which provided forgivable loans to buoy struggling businesses in the early days of the pandemic shutdowns. The fraudsters were ready! A Hollywood producer allegedly used PPP loans to pay off personal credit card debts and other personal expenses. The most amazing aspect of this case is not how much money he was able to steal, but the speed at which he did it. The program was launched on April 3rd, and the DOJ issued the indictment on May 22nd.

Analytics can keep pace with healthcare fraud

Fortunately, companies with tools adept at fighting fraud can move quickly. Their solutions are centered around preventing, identifying and investigating fraud. Solutions like SAS’ detection and investigating tools use hybrid analysis, anomaly detection, natural language and network analysis, combined with predictive analytics and artificial intelligence and machine learning, to keep pace with fraudsters intent on taking advantage of evolving rules and payment processes.

But let’s not get caught off guard by only focusing on new scenarios. Old school fraud schemes are still very much in play. Fraudsters take advantage of the diversion of shiny new opportunities that draw attention away from their old antics, like:

  • Upcoding, which is charging insurance for a more expensive treatment than what was given
  • Fraudulent billing for services not provided
  • Repeatedly reusing a single-use device to reduce costs

This Michigan physician deployed all three of these at once, resulting in hundreds of thousands of dollars in false claims.

The key to fraud prevention in these dynamic times is staying on top of the changing landscape while not losing sight of what we already know fraudsters will do. Creating new rules only affects those who follow the rules. To protect the integrity of our healthcare and benefits we have to look at things from a fraudster’s vantage point. COVID-19 may have opened the door to pervasive healthcare fraud. But it’s up to us to close it.


About Author

Tom Wriggins

Sr. Manager, Global Fraud, Risk and Security Intelligence

With over 30 years of healthcare experience, Tom Wriggins brings practitioner-level expertise to his role as a Senior Manager with SAS. Tom combines extensive clinical experience with data and analytics knowledge to help government and commercial health care entities crack down on fraud and improper payments. He has led multidisciplinary teams that have delivered large and complex data solutions for government health agencies, as well as created fraud and abuse investigative training programs.

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