Fraud prevention puts members first

Wednesday, Mar 4, 2020

March is Fraud Prevention Month, giving us a perfect opportunity to tell you how we manage this area using state-of-the-art data analytics combined with the deep and abiding expertise one gets from serving the BC marketplace for almost 80 years. Oh yes—we recovered almost $3 million in 2019. Find out how.

The Canadian Life and Health Insurance Association (CLHIA) has launched a Fraud=Fraud Program to help people across the country understand that health and dental benefits claim fraud is a real crime with real consequences.

Apart from the legal repercussions of a fraud conviction, we recognize that there are other “consequences” to benefits fraud and insurance abuse—and they have names: they are the son or daughter of a co-worker that needs extensive medical care, the spouse that manages a chronic medical condition with an expensive drug, or the plan member who needs support with a mental illness—all of whom are impacted as plan sponsors diligently try to balance benefit plan coverage and the rising cost of care to meet the needs of all plan members.

State-of-the-art data analytics

Electronic benefits claims are on the rise. In the last three years, Pacific Blue Cross processed over 68.7 million claims, 86% of which were submitted online—and this number will continue to grow as BC service providers and members fully embrace the ease and convenience.

The ubiquitous use of e-claims shifted our approach to minimizing fraud and insurance abuse and recovering monies lost on behalf of our clients. We’ve invested millions of dollars in technology, people, and processes that detect fraud and abuse, pursue problems when they find them, and prevent fraud from occurring in the first place.

In 2018, we implemented a state-of-the-art data analytics tool that relies on artificial intelligence, predictive analytics, link analysis, and machine learning to spot irregular billing patterns and claiming anomalies based on fraud use case scenarios we see in our book of business (for instance, a dentist billing a root canal for a two-year-old).

“Every quarter we run several years of e-claims data through our tool to leverage the machine learning and intelligence aspects that identify fraud, insurance abuse, intentional misrepresentation, and unintentional errors,” says Suzanne Solven, Associate Vice President, Audit, Investigations, and Quality Assurance. “Risk scores are assigned to the results investigations are prioritized based on the highest risk. This process focuses our resources on where they can generate the greatest recoveries for our clients. And it allows us to proactively deter potential fraud and insurance abuse situations before they become serious problems.”

About that recovery …

As the only benefits carrier that fully integrates with BC PharmaCare, we won’t pay any claims (including additional drug mark-ups or other charges) if the PharmaCare program fully covers the cost of a drug.

The first big test of our data analytics tool was to audit pharmacies across the province, looking for instances where we were “balance billed” for these particular PharmaCare claims. From April to June 2019 we performed over 1,000 pharmacy audits, which recouped billing errors amounting to over two thirds of the total recovered throughout the year—a task that, with our old technology, would have taken the better part of 12 months to complete.

“This type of cost control measure is unique to Pacific Blue Cross,” says John Crawford, Chief Executive Officer. “We’ve made terrific strides towards our goal of being an industry leader for our zero-tolerance culture and strategic approach to eradicating fraud and insurance abuse.”

What are you doing to combat fraud and insurance abuse in your organization?

Pacific Blue Cross and the  CLHIA have some great resources to help you spread this message to your staff.