Fighting fraud in healthcare

Detection and prevention strategies that can help reduce cost and mitigate losses

The complexity of the healthcare industry can make it difficult to combat fraud. But with a proactive, unified approach, healthcare organizations can share information across different functions and geographies in order to identify, detect, respond and recover from fraud faster.

In this installment of our “Let's change the way we see risk” series, Tiffany Gallagher, Health Industries Risk and Regulatory Leader, PwC US, and Chris Rohn, Principal, Investigations and Forensics, PwC US, discuss the challenges of detecting and preventing fraud in healthcare and explore how to help develop an integrated approach to fraud management.

With advanced tools like AI and machine learning to help them impersonate, steer and gain access, today’s fraud actors are becoming more sophisticated in this increasingly digitized world — and more difficult to detect.

According to PwC’s 2022 Global Economic Crime and Fraud survey, a majority of respondents reported that they experienced fraud, corruption or economic crime over the last two years. Healthcare fraud, waste and abuse amounts to more than $100 billion annually that may be lost to fraud

The unique challenges for healthcare

Most organizations are struggling to meet the challenges of preventing fraudulent activity. With employees working from home and sharing data remotely, using out-of-date internal systems and data management processes, the weak links seem to have multiplied. 

In the healthcare industry, this situation can be exacerbated by organizational complexity. Healthcare’s unique and complicated interrelationships range from patient to doctor to facility to insurance company to employer groups, with many intermediaries in between. The opportunities for fraud can be boundless in a system where there’s not always a direct line of sight between the services being provided and the money being exchanged.

In addition to being victims of fraud, healthcare organizations can also be accused of committing fraud themselves, especially those participating in government programs. Healthcare entities are subject to numerous regulatory requirements, including:

• False Claims Act (FCA): The FCA imposes liability on those who defraud governmental programs.

• Anti-Kickback Statute (AKS): The AKS prohibits financial payments or incentives for referring patients or generating federal healthcare business.

• Physician Self-Referral Law: Also called the Stark Law, this set of regulations prohibits healthcare providers from gaining financially by referring patients for health services payable by Medicare or Medicaid.

These laws, along with many others, make it essential for healthcare entities to take a proactive approach to fraud — one with robust compliance and monitoring processes that can identify and disclose issues as they arise.

Fighting fraud with a coordinated approach

One way organizations can meet the challenges of helping drive compliance in the face of complexity, is to establish a fraud fusion center, which brings together cyber threat intelligence and disparate anti-fraud activities (special investigations, finance, compliance, internal audit, etc.) siloed within the organization in a unified way. By implementing advanced technology and increasing cross-department coordination, organizations can use a centralized hub to share fraud signals across different functions and geographies, making it easier to identify, detect, respond and recover from fraud rapidly.

PwC has robust solutions to help manage and monitor risks holistically. Combined with an effective team and clear processes, these tools leverage technologies such as AI and machine learning to help combat fraud. With Risk Detect, a PwC product, it’s possible to proactively identify, monitor and remediate high-risk transactions so you can combat bribery and corruption and reduce fraudulent activity across the organization to a great extent.

Learn more about how Risk Detect can help identify fraud and protect people while helping to keep healthcare organizations compliant.