Fraud and abuse in healthcare billing have been around as long as health insurance has existed, but despite the potential of AI to bring significant efficiencies to the billing process, just over 10 percent of healthcare organizations have really begun to take advantage of it.
That’s according to a recent survey by PYMENTS. On the other hand, however, 83 percent of surveyed firms that have or plan to invest in AI for fraud, waste and abuse (FWA) “consider reducing false positives as the most important expected benefit. That portion is 100 percent for firms that generate more than $1 billion in annual revenue. More than three-quarters of respondents in other revenue brackets cite it as the most important expected benefit.”
For the survey, PYMENT, in collaboration with AI solutions provider Brighterion, questioned 100 healthcare executives across a range of expertise in fraud detection and analysis, financial planning, claims payments or risk management.
According to their findings, FWA is “costing surveyed firms nearly 12 percent of their annual revenues. The problem is so rampant that insurers have flagged or investigated nearly 40 percent of provider post-payment claims and 25 percent of consumer post-payment claims for FWA during Q1 2021.”
Despite the widespread problem, the survey found, “Only 11 percent of surveyed firms are currently using AI systems for individual claim editing and waste and abuse detection, and only 1 percent to 2 percent are using them for individual claim fraud detection, despite the magnitude of the problem. Twelve percent of firms are using AI to detect and address FWA overall.”
Titled AI In Focus: Targeting Fraud, Waste And Abuse In Healthcare, the study argues that the use of AI needs to be more advanced than the many less effective in-house solutions currently used.
For example, the researchers found, “The majority (82 percent) of surveyed healthcare firms today rely on rules-based algorithms to manage FWA-related challenges,. Only 12 percent of respondents are currently using AI systems to detect and address FWA, despite these systems’ many benefits.”
Larger firms, however, seem to have figured out the benefits more quickly, the researchers said. “Our research shows that 44 percent of respondents that generate more than $1 billion and 36 percent that generate between $500 million to $1 billion in annual revenue use AI-powered systems.”
In addition, 86 percent of surveyed firms using AI to detect FWA relating to claim payments have developed their systems in-house. “Larger respondents are more likely to develop systems in this way, with all firms in our sample generating $500 million or more in annual revenue doing so. Smaller firms that generate less than $500 million in annual revenue, meanwhile, more commonly seek outside help for deploying AI.”
Photo by lovelyday12/Getty Images