Do insurer SIUs measure up?

Most U.S. insurers measure the performance of special investigations units, but their methods for measuring SIU success vary, according to results from the Coalition Against Insurance Fraud's first-of-its-kind benchmarking study.

The Coalition distributed a 10-question survey to about 110 SIU managers from all lines of insurance and received 52 replies from companies including WellPoint and UnitedHealthcare.

Participants included companies without measurement systems, companies that measure anti-fraud efforts because states they do business in require it, and companies that consider SIU measurement useful for operational improvement, the report noted.

Nearly 87 percent of respondents implemented formal programs to measure SIU effectiveness, with more than three-quarters of participants assigning this responsibility to SIU management, the study found. Small and large companies tended to have SIUs self-monitor, but medium-sized respondents relied more on claims departments or senior staff to assess SIU effectiveness.

Forty-four percent of respondents measured SIU effectiveness annually, with 29 percent measuring quarterly.

There's little common ground on how companies calculate cost savings from anti-fraud work. Most respondents use either the dollar amount of claims filed or the amount of reserves. A quarter of respondents said fraud deterrence is a factor in their SIU measurement systems; but the study didn't address how to quantify deterrence, which is a slippery point.

Most respondents measure performance using the number of SIU referrals and the quality and accuracy of investigations. Further, 84 percent of respondents viewed anti-fraud training performed by SIUs as a program effectiveness builder.

The study found "no absolute conclusions," given the small sample of insurance companies involved. However, the authors "encourage insurers interested in enhancing their anti-fraud operations to review these findings with an eye on how they might refine their operations to have the greatest impact on preventing and detecting insurance fraud."

To that end, experts highlight the importance of sharing information about fraud schemes through task forces and public-private anti-fraud partnerships. Minnesota moved in this direction recently, when its legislature enacted a broader immunity law allowing increased exchange of case leads and other fraud investigation information, the Coalition noted.

For more:
- read the Coalition's study report and article