Fraud Prevention BY JAMES RUOTOLO
PARTNERS IN CRIME…PREVENTION
How Information Sharing Thwarts Fraud
Steps in the Right Direction
NICB is gradually shifting prior-ity from its historical focus on auto theft
and physical damage claims to medical
fraud. The Aggregated Medical Database
program is a huge leap forward in addressing the challenges of medical insurance fraud for the p&c industry. By pooling medical billing information, NICB
can produce MedAWARE Alerts to notify
member companies of emerging patterns
of fraud or suspicious actors.
The newly announced partnership presumably will expand this concept across
p&c, healthcare, and government agencies. Certainly, aggregating data from
these groups will yield interesting results.
“Private insurers and the federal gov-
ernment have operated for many years
like they each have their own distinct set
of crooks defrauding them,” said Dennis
Jay, executive director of the The Coali-
tion. “We know that medical providers
defraud both. By teaming up and sharing
data and intelligence, more fraudulent
schemes will come to light and likely be
detected much earlier.”
For years, the bad guys have benefited
from the disjointed approaches taken
to detect fraud scams. It appears that is
about to change.
The recent announcement by the Department of Health and Human Services and Department of Justice to form a National Fraud Prevention Partnership to address healthcare fraud is a step in the right direction. It’s good to see industry groups such as the National Insurance Crime Bureau (NICB), Coalition Against Insurance Fraud (The Coalition) and National Health Care Anti-Fraud
Association (NHCAA) standing side by side with health and p&c insurers, as well as
For too long, the insurance industry has struggled to share information effectively to
combat fraud. Yet all the while, as NICB president Joseph Wehrle told the audience at
a recent industry conference, “Fraudsters don’t discriminate. They will take
money from anybody.”
Sharing Information Works
There have been many successful examples of how information sharing can help thwart insurance fraud. Fraudulent medical providers seldom
discriminate when selecting their victims and equally target auto insurers,
workers’ compensation carriers, health payers, and government programs.
Some of these groups have already shown that when insurers share information, they all glean better intelligence about these organized fraud
NICB has long acted as an industry clearinghouse for p&c companies to share infor-
mation on suspicious claims and interface with government and law enforcement agen-
cies. Most companies that participate in NICB’s medical fraud taskforces throughout
the country cite information exchange as one of the primary benefits. NICB proactively
culls claim information, looking for patterns, and then notifies the industry via Fore-
WARN Alerts and other communications.
NHCAA’s SIRIS database is a repository to share similar information for healthcare
insurers. It hasn’t gained as much traction as other projects, but the approach is sound.
NHCAA and NICB have been in discussions for quite some time regarding how to bet-
ter share these details between healthcare and p&c industries.
“Medicare alone receives more
than a billion claims each year;
private health payers and
Medicaid pay out $1.8 trillion
in claims annually; and p&c
carriers receive more than 40
million injury claims a year.”
F Stephen Applebaum, Aite Group
While this partnership will likely benefit p&c carriers in the long run, it’s unclear exactly how. The announcements
made thus far are light on details. In
speaking with members of the partnership, a common refrain of “it’s very early
in the process” is heard. On a positive
note, it seems that there has been progress made by the various subcommittees
of the partnership, which meet regularly
to identify opportunities for quick wins.