health claim fraud prediction

www.valiancesolutions.com Email: [email protected] © 2014 Valiance Solutions

Health Claim Fraud Prevention

Analytics Consulting

Technology Consulting

Business Intelligence


Defining Fraud

“An act or omission intended to gain dishonest or unlawful advantage for a

party committing the fraud or for other related parties.”

“Fraud is willful and deliberate, involves financial gain, done under false

pretense and is illegal.”

“The estimated number of false claims in Indian healthcare industry is estimated at around 10-15 per cent of total claims.”

“Healthcare industry in India is losing approximately Rs 600-Rs 800 croresincurred on fraudulent claims annually.”


Health Care Claim – Typical Fraud Scenarios

Policy Holders Claim Fraud – Fraud Against Insurer at Time of Making Claim

Intermediary Fraud - Fraud perpetuated by an intermediary against the insurer and/or

policyholders..

Internal Fraud - Fraud / miss-appropriation against the insurer by a staff member

Duplicate and inflated bills, impersonation. Participating in fraud rings, purchasing multiple policies to make multiple claims. Creating staged accidents , thereby creating fake Medical and disability claims. Submitting Fake / Fabricated documents to meet policy terms conditions. Concealing pre-existing disease (PED) / chronic ailment, manipulating pre-policy health check-up findings.

Commonly Committed Frauds by Policy Holders

Commonly Committed Frauds by Providers

Overcharging, inflated billing, billing for services not provided Unwarranted procedures, excessive investigations, expensive medicines, Unbundling and up coding Over utilisation, extended length of stay Fudging records, patient history


Health Care Claim Processing – Traditional Process

TPA approves or Disapproves the claim based on Policy Coverage, and various sub-limits in policy.

TPA Approver looks for Fraud Triggers and self judgment to identify potential Frauds.

TPA Has predefined claim amounts for various Medical Procedures. This may be helpful in limiting claim

amount but does nothing for preventing Fraud claims.

No Quantitative framework exists to identify underlying Fraud Patterns.

Hospital Diagnose the disease and

file Authorization to TPA

Patient walk to Hospital

with ID, Policy Card

Claim is approved, with limit

Claim is rejected

Status is Communicated

to Hospital

TPA Looks for Policy Coverage and Fraud

Triggers


TPA runs the claim through Fraud Claim Prediction Algorithm.

Fraud Model calculates Fraud score against each incoming claim, and Flags Fraudulent Claims.

Fraud Models uses Machine Learning to identify underlying Fraud Patterns, and classify incoming claims.

Quantitative Framework removes subjectivity/Human Intervention in Claim Approval process.

Hospital Diagnose the disease and

file Authorization to TPA

Patient walk to Hospital

with ID, Policy Card

Health Care Claim Processing – Predictive Analytics

Fraud score generated in real

time

TPA runs the claim through Fraud Claim

Prediction Model

Fraudulent Claim

Genuine Claim


Filing of Claim by

Patient/Provider

TPA enters claim

informationFraud Score

High/Medium/Low

FeedbackResponse tracking

Feed

bac

k L

oo

pOverall Execution Strategy

1 2 3 4

Fraud Model

High Due Diligence

Medium Rule based Approval

Low Auto-Approval


Solutions Details

Quantitative Solution incorporating Policy Holder Data, Provider Data, Claim Data.

Framework arrived at using statistical Techniques like CHAID, Clustering, Logistic

Regression.

Tools like SAS (proprietary) or R (Open Source) used for modelling.

Algorithm can be embedded into existing IT solution using any of available

programming languages and service based frameworks.

Continuous monitoring of the algorithm which can be automated as well.


Benefits

Predictive Analytics can help quickly identify suspicious case and uncover new fraud

patterns.

Standardized process for claim screening removing subjectivity at different levels.

Saves time and resources while deploying attention to claims where it’s needed.


Valiance Solutions is…

Valiance Solutions is a Big Data Analytics firm helping clients unlock business potential

of data using cutting edge technologies.

Valiance has since partnered with Insurance firms, Credit Information Bureau’s, Digital

marketing firms and lot more in delivering intelligent technology solutions for diverse

business needs.

Leadership team comes from IIT’s and IIM’s with 24 years of combined experience in

delivering technology & business solutions to Investment Banks globally and BFSI

companies in India.

Advisory team comprises of seasoned industry executives who have serve as thought

leaders with global firms.

Head Quarters: Delhi, India Strong TeamGlobal Clientele


Success Stories

Savings of 1.5 million USD from reduction in fraud for consumer durable loans

A Prominent Non-Banking Finance Firm

Increased Savings of nearly 3 million USD over 6 months period from improving policy persistency.

A Prominent Life Insurer


Success Stories

Increased revenue of INR 4 million from cross sell optimization for prominent Life Insurer over 4 months

A Prominent Life Insurer

Incremental Revenue of INR 7.2 million from better customer targeting.

A Prominent DTH service provider


What do we bring Onboard?

• Learning's from industry on data collection, data analysis and MIS.

• Team with strong desire to excel and succeed not just for us but for our clients. Advisory panel consists on individuals who have spearheaded analytics in India.

• Successful implementation of decision frameworks in areas of Claim fraud, Customer Retention and Marketing.

• Knowledge of setting up consistent and right data collection process and framework for future Analytics & BI initiatives.

• Strategic partnership vision to establish Analytics as a key competitive advantage in Industry for our clients.

Domain Knowledge Industry Exposure Technical Expertise

Result FocusPassionate Team


Valiance Solutions Private LimitedA-146, Opposite TCS building,Sector 63, Noida, U.P - 201306India.

Contact Us

[email protected]

+91 120 4119409

Vikas Kamra (+91 8750068961)

Visit us @ www.valiancesolutions.com

http://www.linkedin.com/company/valiance-solutions?trk=cp_followed_name_valiance-solutions

https://www.facebook.com/Valiance.Solutions

http://valiancesolutions.com/

health claim fraud prediction

Data & Analytics

fraud fraud

fraud claims

claim data

fraud triggers

fraud models

fraud rings

valiance solutions solutions

claim screening