What is fraud detection in healthcare?

Fraud detection in healthcare refers to the processes, tools, and rules used to identify and prevent illegal or dishonest activities within the healthcare system. These activities can involve doctors, hospitals, patients, insurance companies, or anyone who benefits financially from healthcare services.

What Does Healthcare Fraud Look Like?

Healthcare fraud happens when someone intentionally lies or misuses medical services to receive financial gain. Examples include:

Billing for services that were never provided
Charging for more expensive procedures than the ones actually performed (upcoding)
Duplicate claims for the same service
Unnecessary medical tests or treatments just to increase costs
Using someone else’s insurance card for treatment
Doctors receiving kickbacks for prescribing specific drugs or services

How Fraud Detection Works

Fraud detection systems typically use:

Data analytics and machine learning
- Algorithms scan large billing datasets to spot unusual or suspicious patterns.
Claims review
- Insurance companies manually review questionable claims.
Audits
- Hospitals, clinics, and insurance companies are checked for irregularities.
Whistleblower systems
- Employees or patients can report suspicious activities.