Verizon is offering private health insurers and government agencies involved in healthcare the same fraud prevention solution that it has already piloted for the Centers of Medicare and Medicaid Services (CMS) through a subcontract with Northrop-Grumman.
Called Verizon Fraud Management for Healthcare, the system uses predictive modeling technology to examine incoming claims and route potentially fraudulent claims to case managers for investigation. According to Verizon's announcement, "the platform is designed to help identify fraud before payments are made, reducing improper payments and the administrative and legal costs associated with traditional pay-and-chase recovery operations."
Other fraud prevention solutions use data mining to detect potential fraud in claims that have already been paid. But one Verizon competitor, LexisNexis Health Care, a subsidiary of Reed Elsevier, is using predictive modeling to spot fraudulent claims before they're paid. Besides its proprietary algorithms, LexisNexis has a database of claims on 250 million people, according to InformationWeek Healthcare.
Connie Schweyen, managing principal for Verizon Connected Healthcare Solutions, told FierceHealthIT that Verizon is the only company that can detect fraudulent claims in "near real time." Some other firms say they can do it in the prepayment phase, but the process may take days or weeks, she said.
Verizon developed its core algorithms many years ago to detect fraud in its communications business, and it now applies the solution to about 20 billion records per day.
According to Schweyen, there are many areas of commonality between the requirements of detecting fraud in communications and healthcare. Verizon used internal and external experts to adapt its system to healthcare, including clinical practice patterns, she said.
Verizon validated the system by taking known fraudulent claims and running them through a simulator, Schweyen noted. However, she acknowledged that the solution will be further refined as Verizon gains experience in healthcare.
Meanwhile, according to Schweyen, the company is really focused on high-value targeting. "If you're going to move into a prepayment model, you have to have bulletproof algorithms," she said. "So you want to start with high-value targets that are so legitimate that they can't be called into question. Flagrant fraud would be one area, and also things that are clinically inappropriate."
To learn more:
- read the Verizon press release on its new launch
- here's the InformationWeek Healthcare article on LexisNexis