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Healthcare Fraud and Abuse Schemes – How to Spot the Patterns

  • by Emilia Burlasz
  • Mar 9, 2018, 10:00 AM

Before the use of electronic claim submissions and EHRs, the only option payers had to detect fraud, waste and abuse was “foot-on-the-ground” auditing at provider sites.  Even today many payers still rely on this manual process.  These types of audits are time consuming, expensive and performed after claims have already been paid.  Technological advances have radically changed FWA pattern recognition.  Today, statistical sampling based physical claim audits aren’t necessary when payers can automate testing 100% of claims.  

If a payer processes thousands of claims per day, how can it efficiently detect fraud and abuse patterns?  Let’s examine a common fraud scheme – a provider knowingly billing for services at a level of complexity higher than services provided.  In a study1 of E/M services, the Office of the Inspector General (OIG) noted that 42 percent of claims for E/M services were incorrectly coded and identified physicians had an aberrant number of claims utilizing the more complex and expensive E/M codes.  Consistently billing for a higher level of complex E/M codes can be a sign of fraud.  Analyzing the volume of claims coded with higher reimbursed E/M codes such as 99214 and 99215 over the history of provider claims will alert a payer to an emerging pattern that could signify fraud.  

Another common example of a fraud pattern is an unusually high level of office visit volume per day or a high volume of office visits spanning a time period.  Can a provider within the same specialty and same zip code really see triple the volume of patients versus their colleagues?  Claims with E/M codes can be evaluated for volume, and submitted charges can be compared to average charges by specialty and across geographical zip codes.  

The keys to provider pattern analysis are understanding procedures prone to FWA, how those procedures translate into a coded claim, and looking for patterns over the history of submitted claims.  If all these skills aren’t available in house you can utilize Context’s solution to fill the gap as content experts and data scientists have put these valuable fraud detection tools into our SaaS solution.    

Context’s Payment Integrity Solution identifies potential fraud, waste and abuse patterns by separating out those providers and/or members who appear to be systematically abusing the plan.  Context 4 Healthcare Payment Integrity Solution does this by allowing payers to better detect aberrant patterns in claim and encounter data.  If a payer suspects a fraudulent billing pattern, Context’s solution can add a provider or member to a payer’s custom watch list to alert the payer to claims involving the identified individual.  In this way, the Context Payment Integrity Solution helps to identify and monitor potentially fraudulent patterns and narrows the scope of any required investigation so that the assets of the plan are protected.  


  1. Office of Inspector General - Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010:

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