AI and Fraud Detection

The Center for Medicare and Medicaid Services is pursuing the use of artificial intelligence technologies for medical payment fraud detection, further cementing industry observers’ views on the potential of AI in healthcare payment technology.

Beginning in early 2019, the agency sought advice from the private sector on how emerging AI technologies might have a positive impact on administration, proper claims payments and payment integrity. Fraud detection is one strong area of focus for AI. But how can artificial intelligence help prevent or lower fraud in medical billing? Let’s find out. 

Medical Payment Fraud: The Need For Better Solutions

Healthcare fraud costs an estimated $68 billion annually, or 3% of total American healthcare spending. Some estimates range as high as 10 percent or $230 billion. When combined with coding errors and simple clerical mistakes, estimates for medical fraud, waste, and abuse charges range as high as $300 billion, with up to 80% of submitted medical claims containing at least one overbilled charge. 

The spiraling cost of healthcare means healthcare payers are under increasing pressure to control costs and margins in order to provide their members with affordable, effective care. Fraud, waste, and abuse charges are an obvious place to begin, but the sheer volume of documentation involved in medical billing and coding makes it a challenge to review more than a fraction of claims in the time window available to prevent or recover improper medical payments.

Artificial intelligence excels at both data analysis and repeatable, process-driven tasks. Human analysts are needed to make final determinations and to dive deep into complex claims, but AI can serve as a powerful force multiplier for those analysts to review more claims and detect more high-cost errors and fraudulent charges.

Machine Learning: Teaching Through Volume

Machine learning is one AI technology considered to be a game-changer for fraud detection in many fields, including medical payment fraud.

What we call machine learning is when a computer teaches itself to recognize patterns or complete repetitive tasks through ingesting vast quantities of data. This capability is perfect for healthcare fraud detection, since one can feed quantities of medical claims and documentation through machine learning algorithms to train them in recognizing potentially fraudulent claims. Once the system accurately and effectively identifies anomalous claims, it will scan and analyze incredible volumes of data far faster than humans can. 

AI has its limitations. It doesn’t have intuition or imagination. It’s very literal, and although it may recognize anomalies in a data set, those could very well be typos, or legitimate charges similar to previously recognized fraudulent charges. An effective AI system is one that leverages AI’s advantages while maintaining a human element.

Alaffia Health’s platform uses machine learning this way; the system detects anomalous information in healthcare claims and flags those claims for review by their expert team of medical coding and billing experts. This provides a best-of-both-worlds solution. Alaffia’s AI-powered platform completes an initial audit of claims and automatically requests supporting documentation for potentially fraudulent claims. Their experienced and proven team of human analysts reviews flagged claims, and when they find overbilling or improper charges, they determine the correct billing amount. They then work with providers to either provide an accurate medical payment amount or recover overpayments. 

Implementing AI For Fraud Detection

Smart leaders in the healthcare payer field know AI is becoming a necessity to keep their margins under control. They also recognize that significant investments are necessary to internally develop AI technologies. That’s why many healthcare payers are choosing to work with a payment integrity partner that can provide these capabilities immediately. 

Alaffia Health offers a turnkey solution that integrates seamlessly with their partners’ existing systems quickly. Alaffia’s AI-driven payment-integrity-as-a-service platform complements a proven team of medical payment integrity experts to get proven, repeatable results. And we back that up with a contingency-based fee structure; we only make money when we save money for our partners. 

Schedule a call to learn how you can leverage AI technologies to control fraud, waste, and abuse costs with no upfront investment. Alaffia Health is the medical payment integrity partner you need.