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Payment Fraud Generates Huge Financial Impacts on Health Delivery Organizations

  • LENOVO EXCLUSIVE|
  • April 04, 2017|
  • 7 months ago

by Tom Foley

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Director, Global Health Solution Strategy

The cost of payment fraud

At its core, payment fraud is a byproduct of medical identity theft. Individuals either misrepresent their identities to receive care, or they provide proper identification but use unauthorized forms of payment for services. Along with duplicate records and identity theft, payment fraud is one of the “big three” challenges within the health delivery system that must be eliminated for the emerging value-based care model to be successful.

The financial ramifications of payment fraud are astronomical. At present, payment fraud costs health delivery organizations $28 billion annually, with an additional loss of $272 billion within the U.S. Medicare and Medicaid programs.1 These numbers are corroborated by the U.S. Department of Justice, which obtained more than $1.9 billion in settlements and judgments from civil healthcare fraud cases in 2015.2

Ultimately, the ability to efficiently deliver quality care for better patient outcomes is dependent upon eliminating payment fraud. And because fraud is inextricably related to patient identity, it is this quality-of-data issue on which industry attention must be focused. Moreover, correctly identifying patients and accurately matching them to their medical records across healthcare settings results in additional auspicious outcomes. The risk of misdiagnosis decreases, treatment plans become more effective and duplicate records become a thing of the past. But what can providers and health delivery organizations do to address this costly issue?

Health IT solutions

It is imperative for health IT to directly confront the costly issues associated with care delivery fraud. But how? The answer is simple: Implement a proven patient identity solution that validates the right patient and the right record, every time.

Patient identity solutions help to automate patient check-ins and admissions with greater security using technology that creates one “single and true” identity for all locations across the entire care continuum and myriad locations. Providers can capture and verify a patient’s ID and associated records, validate and permanently match patients with their correct medical records, and eliminate duplicate patient records that can lead to medical inaccuracy. Patient safety is markedly enhanced, and patient satisfaction is bolstered. And, most relevant to payment fraud issues, by linking a patient ID directly to his or her active insurance and payment information, data and billing accuracy are improved.

Because payment for services—and the associated payment fraud issues—are intertwined with medical identity theft and duplicate records, the same patient identity solution will effectively address payment fraud. By assigning a Unique Health Safety Identifier (UHSI), coupled with the use of a biometric or other equally strong second factor, a patient is verified and linked to an address, insurance plan and payment information. With this in place, it will become impossible for any person to falsely claim to be someone else, or attempt to fraudulently pay for services rendered.

The health IT industry must not only recognize the importance of eliminating the roadblocks to effective value-based care, but also create viable solutions to these challenges.

1. The 272 Billion Swindle. Economist. May 2014.

2. Justice Department Recovers Over $3.5 Billion from False Claims Act Cases in Fiscal Year 2015. Justice Department. December 2015.

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