Here’s What You Don’t Know about Fraud, Waste and Abuse

Here’s What You Don’t Know about Fraud, Waste and Abuse

Fraud is different from Waste and Abuse, and most technology solutions don’t adequately address either issue.

Think you know how to manage fraud, waste and abuse at your healthcare organization? CMS doesn’t agree. In fact, the promises of change and reform coming from CMS and GAO suggest that our government doesn’t feel that healthcare organizations are adequately managing fraud, waste and abuse at all. The data we have supports this. FWA estimates are in the billions, with the latest estimates pegging waste at 20-25% of healthcare spending.

Technology and services vendors who sell you components of fraud, waste and abuse management programs are doing you a small disservice if they market it as a total solution. They know as we do that, without system visibility, health plans and managed care organizations can only hope to control FWA – not eliminate it.

We aren’t suggesting that you shouldn’t work with technology vendors and third-party business partners – not at all. What we are saying, however, is that health plans need to do more than casually plug in a piece of technology or adjunct services with the hopes it will improve their FWA efforts. A more robust, proactive method is required to eradicate fraud, waste and abuse in your health organization.

The Confusion Surrounding “Overpayments”

By 2026, at least 7% of healthcare spending is expected to be made up of some sort of overpayments. That’s $400 billion – at least – and only 5% of that is expected to be recovered. But “overpayments” is a broad term that encompasses everything from mistakes to intentional fraud. Though fraud makes the headlines, the greater percentage of cases – and far costlier to the health plan – are incidents of waste and abuse. And they must be handled differently.

Going back to our earlier point, a health plan must be fully aware that programs to manage fraud, waste and abuse are only a piece of the puzzle. The key to gaining traction at your health plan is visibility. This is why CMS and GAO promote interoperability; they understand that with access to a broader picture (one that is accurate in real-time), you are less likely to get hung up in waste areas like administrative complexity.

What is your health plan doing about the 10% of inaccurately paid health claims?

Here’s how you can reduce FWA losses by 40% in one year.

We have explored the differences between fraud, waste and abuse in previous blog articles (here and here). To summarize, the primary difference between incorrect payments is intent. Fraud and abuse are categorized as illicit, but only fraud is recognized as willful. Together, fraud and abuse account for7% of healthcare spending. Waste, however, is excessive cost tied to administrative complexity, poor processes, paying costs to suppliers that are too high, and other wasteful spending practices. Clinical waste alone accounts for 14% of healthcare spending. But these are just examples to showcase the breadth of this problem.

In truth, there’s a lot that many health plans don’t know about fraud, waste and abuse – and it’s costing them millions.

“Fraud, waste and abuse is a huge contributor to unnecessary costs and the rise of spend within healthcare in the U.S.”

Forrester Research, 2019

What You Don’t Know About FWA – And How to Fix It

In order to fully solve the overpayment crisis in America – including fraud, waste and abuse – health organizations need to shine a light on the areas of this problem that remain uncovered. In 2016, CMS estimated the Medicaid improper payment rate at 10.5% or $36 billion.

A good FWA solution, integrated as part of a broader overpayment prevention program, should be able to make quick progress of identifying leakage at your healthcare organization. Here are 6 things you don’t know about FWA – and how to fix them:

Modern Fraud Solutions Combat Modern Schemes

The fragmented capabilities of most existing FWA solutions simply can’t keep up with the increasingly sophisticated schemes that keep emerging. Success is stymied by false positives, deeply hidden issues go undetected, and increasing time to detection and action prolongs losses. Advanced technology featuring predictive analytics promises to be able to analyze the massive amounts of healthcare data, flag likely fraud before it starts, and quickly build evidence needed to bring a case forward. When fully integrated across your health plan’s cost containment efforts, total payment integrity leverages all aspects of your PI program to bring insights that help increase savings, reduce redundancy and improve efficiencies and workflow.

Waste is Eliminated with Efficiency

Health Affairs defines waste as “spending that could be eliminated without harming consumers or reducing quality of care that people receive.” And wasteful spending, by some estimates, can amount to as much as one-third to one-half of all US healthcare spending. Administrative complexity shoulders the majority of the blame, and while it’s true that waste can be complex, the answer is more straightforward. Waste can be eliminated with efficiency. And efficiency is as much as mindset as it is a practice. Health plans that don’t focus on and achieve efficiency in their processes will struggle to combat FWA.

Waste and Abuse Outsize Fraud

Fraud is intentionally “playing the system” to erroneously benefit from it. It’s also rare, making up only 7% of healthcare spending when combined with abuse. But it’s easy for a health plan to be sold on the fear of fraud, perhaps leading to an overinvestment in technology that addresses fraud moreso than waste and abuse (which when combined far exceed fraud in the US). Health plans face increased audits from CMS, so it’s more important than ever to understand what percentage fraud, waste and abuse contribute to your health plan’s own payment rates.

Overpayments are the Bigger Issue

A report released three years ago by Harvard Business Review found that “even if the United States implemented all the approaches whose effectiveness had been measured, only 40% of the estimated $1 trillion of wasteful spending would be addressed, leaving a significant opportunity for innovation in all areas of health care.” The report estimates that innovations could reduce waste by $600 billion alone, presumably betting that healthcare (like many other industries) stands to benefit from technological improvements. Our takeaway from this report? A total payment integrity program must address more than FWA in order to maximize effectiveness. Innovations to reduce waste need to involve broader overpayment-prevention technologies.

Provider-Payer Partnerships Help Combat FWA

“Combating waste is an area that will require collaboration between employers, health plans, patients, and providers. The benefits are worth the effort: improving patient safety and reducing unnecessary health care costs,” writes Mercer US Health News. Working with providers in a meaningful way means treating the relationship as a partnership, one where both parties have a vested interest in resolving or preventing fraud, waste and abuse. In fact, improving this relationship is a top tactic for mitigating excessive prices, the number 2 culprit of waste at $231-241 billion per year. Tighter provider partnerships allow both parties to better tie prices to efficiency, outcomes and a fair profit. 

Reporting Should Be Ongoing – And Shared

Your health plan’s goal should be to transition efforts from post-pay to prevention. To that end, health plans should regularly measure certain metrics (Mercer recommends measures of misuse, over-use, and under-use be built in to provider contracts) but also share their findings. It may be helpful to share certain information with vendors, providers and staff from other departments. If information is shared more freely and interoperability is obtained, we can all benefit from the data that comes from payment integrity programs.

One Solution for All

You’ve likely heard the statistic that for every $1 spent on FWA investigations, more than $4 is recovered. What if you were able to take that investment even one step further? Pareo® was created to do something no other payment integrity solution can: plug in at multiple levels to provide health plans with the total system visibility that’s necessary for eliminating overpayment problems.

Our innovative technology combats wasteful spending by introducing more efficient processes for our clients. These accommodations include:

  • Unique differences by line of business
  • Integrated institutional and provider environment
  • Various payment methodologies: DRG, APC, ASC, per diem, fee schedule, percent of charge
  • Automated medical coding and billing

Talk to ClarisHealth about how Pareo® can transform your health plan’s payment integrity operations.

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An Aggressive Plan to Move your Claims Recovery to Prepay Status

An Aggressive Plan to Move your Claims Recovery to Prepay Status

Transitioning more payment integrity operations to internal prepay is more than just a pipe dream for health plans

Transitioning prepay. It’s the holy grail for health plans — and viewed as equally unattainable. And, in the not-so-distant past, this viewpoint would have been correct. But now, with the assistance of innovative technologies, health plans can take an aggressive approach to transitioning claims recovery to an internal prepay model. Here’s a look at the challenge of transitioning to prepay, the solution we propose, and why your health plan can’t continue the business-as-usual efforts in this area. 


The “Challenge”

Historically, health plans applying post-pay concepts in a prepay environment have been mutually exclusive ideas

In today’s market, it’s essential for health plans to get a handle on payment accuracy. But, without the proper technology tools in place, it’s difficult for payers (and other healthcare stakeholders) to gain true visibility into their operations. In the case of third-party technology suppliers, who rely on their partners to perform at peak level, these murky waters may prove especially hard to navigate. 

Without comprehensive insight and management, it is very difficult for payers to move the needle on claims recovery. Especially when attempting to shift claims from post-pay to prepay, though doing so promises improved efficiencies and higher rates of return for health plans. We see two common barriers to making this shift:

  1. Even if your third-party vendors possess the kind of technology that would enable you to move more claims to prepay resolution, health plans have no ability to store the most successful concepts and apply advanced analytics prepay. 
  2. Even if you do have insights, limited data analytics resources prevent you from taking full advantage of advanced technology.

You may know that some health plans have been able to shift claims recovery efforts to internal prepay activities, but do you fully understand how? In part, successful plans achieve this by breaking down data barriers. With the right solution in place, payers can actually overcome the limitations that poor data visibility place on them. 


Why Prepay is an Urgent Concern

Health plans need the efficiencies that comprehensive payment accuracy technology brings, and prepay is an opportunity to make quick strides. 

We get it. You have a laundry list of to-do’s, all vying for top priority. Digital-first strategy, member experience improvements, optimizing costs and outcomes — these are all important goals. But, it could be that a focus on claims recovery gives your health plan the breathing room it needs for these significant investments. And as professional program integrity problem solvers, we think a shift to prepay is a valuable opportunity for health plans looking to gain traction on aggressive payment accuracy targets. 

We aren’t alone in suggesting a technology solution to improve claims recovery (and management in general). Earlier this year, Fierce Healthcare pointed out, down to the dollar, how much it costs a payer to manage claim inquiries. “When a provider contacts a payer to check a claim status, it takes an average of 14 minutes and costs the provider $7.12… multiplied by millions of requests each year, the time and money add up. In 2018 alone, providers made 173 million claim status inquiries by phone, fax or email.” 

Investing in data analytics is a growing trend. In fact, 60% of surveyed health executives say they are investing more in predictive technologies in 2019. Claims recovery will continue to be an important facet of your health plan’s payment accuracy operations. With the right solution in place, the ability to shift to internal prepay concepts will be in your hands. 


The “Solution”: Pareo® is How

With a centralized solution like Pareo in place, everyone can get on the same page, including vendors and other departments responsible for payment accuracy. 

It may take time, it may necessitate a change in how you do things, but we believe all health plans have the opportunity to deploy a centralized solution for payment accuracy (and reap the benefits). Here’s an idea of how a PI solution like Pareo works from a holistic vantage point to quickly turn around recoveries at your health plan: 

Our team works with you to develop a specific implementation and use plan for Pareo that meets (and often exceeds) the goals you’ve outlined for your plan. If shifting to prepay cost avoidance is a goal of your health plan, Pareo is the comprehensive solution that will help you get there.

Talk to ClarisHealth about how Pareo®advanced payment integrity technology is helping health plans deliver on their most advanced digital strategies.

Lack of Documentation is a $23 Billion Overpayment Problem for Medicare

Lack of Documentation is a $23 Billion Overpayment Problem for Medicare

Medicare overpayment is a massive problem, and lack of documentation is a significant contributor.

When we see errors adding up to billions of dollars in improper payments, we pay attention. As payment integrity technology experts and also healthcare consumers we take notice when Medicare fee-for-service programs get slammed for $23 billion in improper payments due to documentation errors. More jaw dropping? Poor documentation processes cause 64% of improper payments in Medicare.

Let’s take a deeper look at how the problem of insufficient documentation became so huge and what you can reasonably do to address documentation errors at your health plan.We have considerable experience on the provider side of healthcare, and our interest in payment integrity is hyper-focused on automating some of the documentation processes required by the federal government.

Just How Big of a Problem are Medicare Overpayments?

When we discuss Medicare overpayment issues, it’s usually a million+ or billion-dollar problem. Recent headlines point to this fact:

CMS may overpay Medicare Advantage plans by billions, study finds


$50 billion in Medicare waste? Yes, that’s how much in ‘improper payments’ are made per year

We’ve spent a considerable amount of time on our blog discussing fraud, waste and abuse and the role these elements play in improper payments. The problem is complex, and the solutions have to be agile and at-the-ready in order to be effective. According to Seto Bagdoyan, a director of audit services at the Government Accountability Office (GAO), of the “billion dollar a week” waste figures cited for 2017, $45 billion can be attributed to overpayments.

Some experts counter that the way HHS calculates waste is “weak,” and Medicare may actually have a larger problem than the already outsized figures making headlines. It’s hard to fathom the depths that Medicare waste truly runs, but being the problem solvers we are, we urge you to look at one sizable chunk of the problem: Improper Documentation.


What is “Poor Documentation” and What Causes It?

If you can’t easily see the patient’s medical “story,” you’re likely looking at insufficient documentation.

Poor documentation has devastating impacts on patient care and is also a large driver of the improper payment problem. Health leaders attribute poor documentation problems to:

  • Busy Providers
  • Lack of specificity
  • Need for documentation education
  • Diluted content from “copy and paste” methodologies

CMS indicates that documentation needs to occur during or quickly following a patient visit and should follow the principles outlined in this document (which includes stating the rationale behind ancillary services or documenting in a way that makes the reason easily inferred).


“In fiscal year 2017, insufficient documentation comprised the majority of estimated FFS improper payments in Medicare and Medicaid, with 64 percent of Medicare and 57 percent of Medicaid improper payments due to insufficient documentation.” (source)


Most Overpayments Stem from Documentation Errors

Recently, the GAO reported in detail that overpayments in Medicare and Medicaid are mostly due to “insufficient documentation.” GAO figures the amount to be $23.2 billion for Medicare alone and $4.3 billion for Medicaid. CERT review criteria changed in 2009 and was attributed as a primary cause for discrepancies between FFS programs; Medicaid’s rate of insufficient documentation is only 1.3% while Medicare is over 6% on all claims.

The way medical reviews have been conducted is now being questioned, with the GAO citing the following four areas of difference:

  1. Face-to-face examinations
  2. Prior authorizations
  3. Signature requirements
  4. Documentation from referring physicians for referred services

The truth is, poor documentation is a problem we saw coming. We know that providers are busy, that their primary focus is serving patient needs, and that most EHR “solutions” are just more manual obligations for busy medical staff. Across the board, the ability to connect data between disparate systems is one that our industry has struggled to solve. That’s what makes Pareo® so unique. And with administrative complexity only growing, we’ve worked up a solution.

Pareo® Clinical: Our Hyper-focused Solution

Pareo® Clinical is the answer to streamlined workflows, a full document repository to support the audit findings, and the ability to develop more robust analytics that can be implemented earlier in your processes to catch documentation deficiencies before the payment goes out the door.

And if under-documentation is an ongoing problem with certain providers, Pareo® Provider can open up the lines of communication between payer and provider and offer education to mitigate that issue in the future. Providers want to submit clean claims, after all.

Talk to ClarisHealth about how Pareo® can transform your health plan’s payment integrity operations.

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A Custom FWA Solution for Smaller Health Plans

A Custom FWA Solution for Smaller Health Plans

Out-of-the-box Fraud, Waste and Abuse solutions just don’t cut it for smaller health plans.

If you lead a health plan with fewer than 250k covered lives, you may think you’re out of luck when it comes to a comprehensive FWA solution. Some of the larger technology players are selling smaller payers off-the-shelf solutions for fraud, waste and abuse. But smaller health plans often lack the internal expertise and IT resources needed to make an out-of-the-box FWA solution work to its best advantage.

“We find this oversight to be extremely frustrating for the smaller health plans we speak with,” says Jason Medlin, VP at ClarisHealth. “They feel as if they were sold a solution that was really a problem because it couldn’t quite work in the ways they needed. Customization can be costly after the fact.” What’s more, the pressure of increased CMS audits can make it appear easier to settle for a “quick” solution. Wouldn’t it be ideal if a smaller health plan could instead get the same customized FWA solution that larger plans enjoy?

What’s Wrong with Off-the-Shelf Solutions?

Truth be told, we haven’t met a small health plan that didn’t face unique challenges: markets differ, access to talented staff members varies, and experience with advanced technology ranges. With this in mind, a one-size-fits-all approach to payment integrity technology seems a shade off of what a health plan may actually need. With the misunderstanding that custom solutions aren’t accessible to small health plans, they may instead end up paying for unwanted features that deter usability.

Another red flag is that purchasing an off-the-shelf solution means that a health plan’s history of claims will not be taken into account. Further customization would be required to enable this benefit, and many smaller health plans don’t realize that at purchase. Without insights into past claim history, a plan may unintentionally silo their data and miss out on recovery efforts that payment integrity technology should be able to offer. This is a huge missed opportunity for smaller health plans and a potential risk for FWA program effectiveness.


“Scalability is also a positive factor, with made-to-order systems able to accommodate business growth and contract with any necessary downsizing.”

BCS, The Chartered Institute for IT


Additionally, a pre-packaged solution is in no way able to address a smaller health plan’s specific needs. It will assume and operate on generic pain points, and over time this may lead to workarounds that negate the efficiency gains brought by the technology. While a huge perk of payment integrity technology is advanced analytics and data reporting, these off-the-shelf solutions will only present canned analytics. And the expertise and ability to make up for it with custom report building may be limited at best.

But, even with their constrained resources, smaller health plans don’t have to settle for pre-built payment integrity technology.

ClarisHealth Offers Smaller Health Plans a Custom Technology Solution

For every client (no matter the size), ClarisHealth makes a point of putting together custom solutions based on developing a keen understanding of each health plan’s needs – but without the lead time and expense of a true made-to-order development project. This balance is made possible by the unique flexibility and usability of Pareo®:

Evolves alongside your organization’s changing needs

Guides users in data analytics, without the need for report writer development

Endlessly scalable: Quickly test concepts and add vendors without adding to IT expense

Easily accommodates assorted business lines

Fraud scoring based on health plan’s real claims history

ClarisHealth doesn’t offer these solutions in a confusing you-pick format. Instead, you’ll work with a team of experienced professionals who will assist you in building a customized interface through Pareo®.

Talk to ClarisHealth about how Pareo® can transform your health plan’s payment integrity operations.

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Addressing the $330 Billion Elephant in the Room: Administrative Complexity

Addressing the $330 Billion Elephant in the Room: Administrative Complexity

Health plans can minimize wasteful spending on administrative complexity with simpler, standardized processes.

Administrative Complexity: Complex administrative processes in healthcare organizations that are increasingly seen as unnecessary and are therefore leading to wasteful spending.

Nearly 10% of the $3.3 trillion the U.S. spends annually on healthcare is wasted on “administrative complexity.” It’s widely viewed that this wasteful spending could be reduced if streamlined, standardized processes were used for administrative functions like billing and collections, credentialing, compliance, and oversight. But this isn’t news. Jennifer L. Ivey addressed administrative complexity 12 years ago in her paper “The Effect of Administrative Complexity on the Cost of Health Care in the United States.” And in 2011, it was estimated that administrative complexity contributed between 19%-31% of healthcare waste costs (estimated to be between $558 billion and $1.2 trillion). How can we resolve the wasteful spending on administrative costs associated with unnecessarily complex processes, a problem that just keeps growing?

“The healthcare delivery system in the United States is fraught with inefficiency and unneeded administrative complexity, the elimination of which would significantly lower the percentage of the gross domestic product*.” – Jennifer L. Ivey

*Healthcare spending made up 18% of GDP in 2017 [source]

“We’ve Got It Covered” In 2012, the Centers for Medicare and Medicaid Services (CMS) administrator Donald M. Berwick, with RAND Corporation analyst Andrew D. Hackbarth, released a study on healthcare waste. Since then, programs have been created to address many of the areas of wasteful spending identified in that study. But, as one writer notes, “the problem is that even when these programs are successful, they add to the administrative complexity of healthcare. It’s like we’re trying to bail out our sinking boat, but instead of dumping the buckets back into the lake we’re dumping them on the person next to us.” Health plans – part of the “supply” side of the healthcare equation – know they have their part to play in this waste. So much so, the ACA mandated a medical loss ratio of 80% to ensure payers don’t spend too much of their premium dollars on overhead. Yet, when we talk to health plans about how they are addressing this issue, all-too-often comes the reflexive response: “We’ve got it covered.” Let us assure you: a third-party vendor partner here and there, a few cobbled-together systems, and some inefficient manual processes is nowhere near “covered.” Add to that recently-reported “widespread rates of poor consumer literacy,” which are costing health plans $4.8 billion annually, $1.4 billion which is attributed to excessive administrative costs. The need to combat the high costs of administrative complexity has never been greater. What are innovative health plans doing to minimize administrative waste?
Cleaner Processes, A Clearer Picture It’s well known that the healthcare industry has fallen behind other industries when it comes to adopting modern technology. But health plans are rapidly partnering with third-party vendors to increase return on claim spend, avoid improper payments, and automate administrative tasks. The problem is that for many health plans, each solution is addressed with a different third-party vendor, a granular approach making lean processes hard to achieve. We know that the best way to combat wasteful spending from administrative complexity is to clean up muddied processes. But without the ability to obtain a clear and comprehensive picture of your health plan’s operations, complexity leading to wasteful spending will persist. Furthermore, unclear operations will negatively affect health plan members, especially when it comes to claims. Cost is obviously a factor for health plans as they consider what technology will best serve them. Pareo® was created with the realization that return on claim spend can be improved if data silos are removed and information could be accessed across a health plan organization. However you choose to operate your payment integrity functions, the right approach is one that gives you the ability to optimize performance and returns on claim spend. The Right Technology “For many executives, this push to embrace innovation is perplexing due to the constant deluge of exciting new technologies,” writes Forbes Technology Council contributor Adam Rogers. Yet, Rogers goes on to identify a few key areas of technology that remain constant – and contribute to profitability. Among the latest innovations, artificial intelligence and advanced analytics are listed as technology features that bolster decision-making ability and improve efficiency. ClarisHealth offers both AI and analytics in Pareo®, which elevates the ability of a healthcare organization to control wasteful spending and pinpoint areas where administrative complexity results in avoidable costs. On average, ClarisHealth clients see the following benefits with Pareo®:
  • Decrease medical expense by 3-5%
  • Lower administrative costs by 2-4%
  • A 10x return on investment

Talk to ClarisHealth about how Pareo® can transform your health plan’s payment integrity operations.

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3 Ways to Prevent Medicare Fraud Waste and Abuse

3 Ways to Prevent Medicare Fraud Waste and Abuse

A robust fraud, waste and abuse program includes three key areas: Technology, Clinical Audit and Investigative capability.

As your health plan grows its fraud, waste and abuse initiatives, there are three areas a strong prevention plan should address. Rather than relying on piecemeal components to combat Medicare and Medicaid fraud, as many health plans do, a comprehensive approach is best practice.

To truly be successful with a fraud, waste and abuse program, you must have three key pieces of the puzzle in place: Technology, Clinical Audits and Investigative capabilities. With all three of these tactics in place, health plans are more likely to increase their recoveries as a percentage of total claim spend. Pareo®, a total payment integrity solution, supports each of these fraud, waste and abuse capabilities.

Common Types of Fraud, Waste and Abuse

Fraud, waste and abuse are three classifications of improper payments, which is a payment made or received in error in a government healthcare assistance program (like Medicare and Medicaid). Improper payments are more broadly combated by a comprehensive payment integrity program, as simply addressing fraud, waste and abuse will still miss some areas of fraudulent or wasteful activity. According to this article, fraud, waste and abuse investigators typically focus on “two general areas: corruption and asset misappropriation.” They do this by analyzing the large amounts of big data generated by healthcare transactions.

A recent report found that Medicaid insurer efforts to root out fraud, waste and abuse were disappointing. Meridith Seife, a co-author of the report, said, “We are concerned anytime we see evidence that managed-care organizations are not [finding fraud and abuse and sharing it with states] in a rigorous way.”

Some of the fraud, waste and abuse offenses found in their report include:

  • Overprescribing of opioids
  • Failure to report offending providers to the state (allowing them to defraud other Medicaid insurers)
  • Failure to recover millions of dollars in overpayments, which could lead to increases in Medicaid rates that are based on fraudulent numbers


To thoroughly combat fraud, waste and abuse in your organization, you need to be sure your solution has the following three key components: 

1. Technology

Health plans and managed care organizations have to connect large volumes of data in order to comply with fraud, waste and abuse regulations. Technology can process large amounts of data and identify anomalies and patterns more effectively than people can do alone. Improper Medicaid payments are rising, according to the Government Accountability Office, which has sparked strong reform initiatives from CMS. To put it simply, the pressure is on healthcare MCOs to eliminate fraud asap.

Last month, CMS released the third pillar of their Medicaid reform initiative: integrity and accountability. For managed care organizations, this means that CMS is immediately beginning audits of state programs to review Medicaid enrollee eligibility as well as if programs are correctly reporting medical loss ratios. Private Medicaid managed care plans will be audited to review that reported medical costs are truthful and accurate. The continued focus of CMS on eliminating Medicaid and Medicare fraud, waste and abuse means that health plans need to properly utilize technology to gain transparency into their process.

Get Industry Insights and More

Talk to ClarisHealth about how Pareo® can transform your health plan’s payment integrity operations.

Technology-enabled fraud, waste and abuse solutions can quickly turn things around for MCOs – especially if they are plugged into a larger, more integrative payment integrity system. Documentation, risk identification, referrals, audit preparation and reporting are all capabilities that a robust fraud, waste and abuse technology solution can provide to MCOs and health plans.

2. Clinical Audits

The second element a preventive fraud, waste and abuse program needs to have is the ability to perform clinical audits. This gives MCOs and other payers and health plans the ability to review claims that have been flagged as potential fraud, waste or abuse cases. Clinical audits determine if diagnoses, medications, time spent with the patient, and more are worthy of further investigation or not. An internal audit program is beneficial to a health plan, as it often prevents improper payments from occurring in the first place. Clinical auditing capabilities also reduce provider abrasion by connecting real-time data between providers and payers. Pareo® supports clinical auditing through intelligent overpayment recovery and prevention abilities. Notably, the ability to analyze claims data and use predictive modeling allows a health payer, plan or MCO to effectively safeguard against fraud, waste and abuse. Tech-enabled clinical audits, like those done by Pareo®, can either complement or supplement the internal efforts of a health payer. Recovery Audit Contractors (RAC) are government contractors that are paid a commission to identify over- and under-payments and recoup or return those payments as required. This may cause hardship on providers, so RACs must follow specific guidelines, many of which necessitate clear audit processes for both the provider and payer.

3. Investigative Capability

Increasingly, health plans, payers and MCOs should arm their FWA programs with a strong investigative arm in order to protect against non-compliance. If fraud is suspected, investigative capabilities allow direct reporting of fraud schemes to the appropriate authorities, providing evidence that supports (and protects) health payers. Should a claim be taken to court, both the evidence and a documented FWA process within a health insurance organization prove invaluable. The amount of big data collected by healthcare organizations presents incredible opportunities to those invested in fraud, waste and abuse prevention. Governmental agencies are now using big data to investigate and prosecute FWA offenders. Mike Cohen, an operations officer with the OIG’s Office of Investigations, explains that “data…creates a pyramid effect, and we can go to the top of that pyramid.” Pareo® supports investigative activities across a healthcare organization’s data ecosystem by staffing a team of expert-level investigators, a benefit which also supports cyber threat intelligence efforts. As with clinical auditing, the investigative component of a fraud, waste and abuse program can be  partially or completely outsourced to ClarisHealth.

Request a Fraud, Waste and Abuse Presentation

Does your organization have what it takes to effectively prevent Medicaid and Medicare fraud, waste and abuse? Find out by requesting an FWA presentation from ClarisHealth, where a member of our team will discuss your specific needs. Learn more about our Total Payment Integrity™ approach to ensuring proper payments here.

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