There has been a sharp rise in fraudulent claims in the last few years. Have you found the same rings true for your business?
While fraudulent claims may have increased in recent years across the industry, our experience at AP Companies has been unique due to the impact of the Covid-19 pandemic. Throughout 2020–22, we observed a significant decrease in ‘non-essential’ doctor visits, with only life-threatening conditions and dental claims remaining constant. Consequently, the total number of claims, including fraudulent ones, decreased during this period. However, as life returned to normal by the end of 2022 and into 2023, fraudulent claims resurfaced in line with typical trends.
The Coalition Against Insurance Fraud recently reported that more than 20 per cent of Americans said they would help their medical provider fraudulently bill their insurer for treatment they had never received. Does this sound familiar?
At AP Companies we have stringent processes in place that deter and detect fraudulent activities. We have observed instances of fraudulent billing in small businesses, such as single doctors’ practices or small clinics. It is essential to differentiate these cases from larger medical facilities. Larger medical facilities, particularly public and well-established large private clinics, prioritise their reputation and adhere to ethical practices, making such fraudulent cooperation with insured members unlikely.
Fraud is now increasingly being committed across borders. How does AP Companies deal with cross-border incidents?
Cross-border incidents are the main focus for AP Companies, as they comprise almost 100 per cent of our detected fraud cases. We are well aware of the tactics that insured members employ, taking advantage of language barriers and geographical distance. Our expertise in third-party administration and managed care allows us to serve as guardians of insurance companies’ interests. We possess in-depth knowledge of local rates, regulations, and can conduct on-the-spot checks, such as verifying clinic existence and medical licences, to safeguard against cross-border fraud.
Do you find dealing with small, private clinics to be a better experience than large hospitals when it comes to fraudulent claims?
The experience in dealing with medical providers, whether small clinics or large hospitals, largely depends on the initial relationship established. With clear communication channels and well-defined reference persons, both small and large facilities can be equally cooperative. However, smaller facilities tend to be more open to collaboration when we lack a constant flow of cases. That said, our primary focus is always on the protection of our clients’ interests, and we employ rigorous scrutiny in cases where fraud is suspected, regardless of the facility size.
Sometimes the costs of chasing a foreign claim can be higher than just paying the claim. How do you make a judgment call on cases such as this?
As a third-party administrator (TPA), we do not make judgment calls on claim payments. However, we understand that the cost-benefit analysis of pursuing a foreign claim can be challenging for insurance companies. In our experience, high-cost or recurrent suspicious claims are often the triggers for further investigation. Additionally, we leverage advanced artificial intelligence (AI) mechanisms for claims management, which allows us to detect and evaluate potential fraudulent claims more efficiently.
What do you think will happen in the future as regards fraudulent claims, and can new technology help?
The fight against fraudulent claims will undoubtedly evolve with the advancement of technology. AI-driven solutions hold immense potential in detecting fraud patterns and anomalies, thereby enabling more proactive fraud prevention. As a trusted TPA, AP Companies has invested significantly in IT technology for fraud detection. Our extensive database of providers, based on real experiences, enables us to combat fraud effectively, especially in cross-border scenarios. We foresee an ongoing role for skilled TPA organisations like ours, acting as strong allies in the battle against fraudulent activities, safeguarding the welfare of our clients and the industry at large.