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COVID-19 restrictions have led to surging numbers of remote medical appointments, and with them, increased attempts of various types of medical fraud. Dennis Toomey looks at the latest fraud trend and what insurers can do today

Wednesday 17 February 2021
Read time: 3 mins
Dennis Toomey
COVID-19 has provided new opportunities for organised crime groups to commit widespread medical insurance fraud and has driven the perilous economic conditions which has persuaded many legitimate businesses and individuals to act dishonestly themselves. Perhaps one of the biggest trends we’re seeing at the moment, especially in the US, is that of telemedicine fraud. COVID-19 restrictions have led to surging numbers of remote medical appointments, and with them, increased attempts of various types of medical fraud.
It’s perhaps not surprising that Forrester predicts: “virtual care visits will soar to more than one billion this year, including 900 million visits related to COVID-19.”
However, with large numbers of users, and money to be made, inevitably there will also be fraud. 
According to Fred Burkhardt, Supervisory Special Agent at the National Insurance Crime Bureau (NICB), medical fraud accounts for around $60 billion of the $80 billion in insurance fraud committed in the US every year. Telemedicine-related scams are just one of over 13 categories of medical insurance fraud.
The fact that the patient is not in the same room as the physician opens the door to two main types of fraud: fictitious billing, and unnecessary referrals, prescriptions and other services. 
At BAE Systems’ 2020 Global Insurance Fraud Summit in November, we heard from several experts about the scale of the challenge facing insurers in this space, and what the industry can do to fight back.
The industry’s efforts may be complicated by the lack of recording and reporting capabilities on some of the messaging platforms that are allowed for telemedicine appointments.
However, there are things that insurers can do today, even as this type of fraud rapidly evolves. 

  • Vigilance in looking at claims and billing codes: check whether injuries match the treatment and vice versa, whether the injuries themselves make sense, and if the provider has a history of fraud or suspicious claims. Insurers should also be on the lookout for template billing, where almost identical claims are filed en masse, and physician licenses that may have expired.

  • Enterprise-grade solutions can help to bust traditional insurance siloes which separate internal auditing, underwriting, sales groups and other functions. By bringing them together and applying advanced analytics to underlying data, insurers can spot the patterns that indicate organised fraud.

  • Patient action is the best first line-of-defence. By questioning their treatment and ensuring insurers are billed correctly, they can make a big difference. After all, this is not a victimless crime: fraud makes everyone’s premiums potentially hundreds of pounds higher.

Telemedicine is here to stay. It will long outlast the pandemic, and so will associated fraud, unless insurers adapt their detection strategies. While new regulations and standards may be on the way, closer ties between all stakeholders—insurance fraud teams, cybersecurity and threat intelligence practitioners and law enforcers—will be necessary to improve our collective response moving forward.
Read more about this topic in our latest Insurance Insight - The State of Telemedicine Fraud.
Insurance Insights: The state of telemedicine fraud ipad icon

Complimentary Insight:
The state of telemedicine fraud

In the latest insurance insights, we look at how telemedicine – which in its purest form means healthcare services that are conducted remotely via video conferencing – has seen fraud spurred on by the pandemic on an unprecedented scale.
This paper uncovers the scale of telemedicine fraud, the different types of telemedicine fraud and how the industry can take action. 
Download now

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