Insurance Companies Use of Fraud Analytics to Discourage Workers Comp Fraud
Insurers who provide workers comp understandably want to do everything possible to prevent fraud, but it can be difficult to do when claims are fraught with emotion and there's no possible way to check on every last detail of the case. Instead of just relying on people's stories entirely, it may make more sense to use fraud analytics for commercial claims to ensure that medical providers, workers and employers are telling the truth about the extent of the damages.
Right now, insurers are mainly using manually processing, and while they do see patterns that indicate fraud, the system is just not as good at showing where the problems are actually stemming from. Whether that's a specific area, hospital or industry, there's more ways out there to significantly reduce the chance of fraud. While employees may continue to come up with creative ways to trick their employers, these automated processes can use specific criteria so everyone who works in this field can start inputting their numbers for real results. The way the referrals process works right now, there's a gap in how the data is being looked at as a whole. This means people miss important factors that could signify fraud.
Medical bills and records as well as policy and pharmacy information could all provide a crucial link to giving people a way to identity bad apples in the system. The information can then be looked at as an entire compilation which could provide a framework for future cases. Currently, many people in the insurance industry have been relying on traditional methods which limits their knowledge and the face of workers comp in general. Unlicensed medical providers may write up false data or hike up procedure costs for workers comp cases, and employers may misrepresent an employee's job as being much safer than it actually is to lower their claim rates.
One estimate puts payouts of workers compensation at over $7 billion dollars a year. It's unclear just how much goes toward fraudulent claims, but there are few out there that think it's not a problem. When there's money to be made, people come up with some very interesting ways to go about getting their hands on it. It's also expected that these fake claims will continue to rise in number in the immediate future. Even if there are professionals out there who think the system works by going through each claim by hand, there's little to be lost here by at least trying out a new form of detection. Any additional insights that can be used to decrease claim payouts for the next few decades will only decrease everyone's premiums.