Fraud Score Used to Screen Health Insurance Claims

If you apply for a loan, the lender will check your credit score. Some banks and other vendors will also review your identity score to measure the odds that you really are who you say you are. Spurred by the pressure to reduce healthcare costs, this “scoring” trend has now moved into the healthcare arena, as more health insurers move to “fraud scores” to flag possibly bogus claims. The aim is to pare the cost of health insurance fraud, estimated to be as high as $120 billion a year, an eye-popping total that includes overcharging for medical services, payment for medically unnecessary services, and payment for services that were never performed.

Fraud scores, according to insurance companies, can be far more effective that the current post-payment review system, which is costly and inefficient. The companies also note that claims with a high fraud score are not automatically denied but are kicked out of the claims system for review by an analyst. The process can delay payment of legitimate claims, however, with the result that a patient could billed before the claim is paid. The claim vetting process may also include asking the patient about the medical services he or she received.

Flagging healthcare fraud isn’t as straightforward as pinpointing credit card fraud, say industry experts, but the push to lower the nation’s healthcare bill is driving insurance companies to show that they are being proactive in cutting costs. Some critics also point out that there are privacy issues involved in the process, since claims flagged by a fraud score are no longer protected by HIPAA regulations.