Forward-thinking fraud, waste and abuse vendors adopt service-based approach

IDC: Vendors offer services tied to existing predictive analytics software; payers are more apt to invest

A changing regulatory environment and an evolving payer marketplace is driving growth in fraud, waste and abuse prevention and detection tools, provoking more companies to offer services that supplement existing software, according to a new report by IDC Health Insights.

The report, "IDC Marketscape: US Healthcare Payer Fraud, Waste and Abuse Services 2015 Vendor Assessment," evaluates six different vendors: IBM, Emdeon, Optum SCIO, Xerox and McKesson. Survey data shows that payers have increased spending in this market to engage in a more proactive approach to fraud, waste and abuse. In particular, vendors provide outsourced services that complement fraud detection software, an approach that has become more effective and less expensive for payers.

FierceHealthPayer: AntiFraud spoke with the author of this report, Sven Lohse, a research manager at IDC Health Insights, in an exclusive interview about some of the key takeaways and why payers are turning toward a service-oriented approach to fraud prevention and control.

Service-oriented, cloud-based tools replace in-house software

The services component of fraud, waste and abuse tools is becoming more ubiquitous because it can be delivered easily and with fewer expenses, Lohse said. A variety of components contribute to claims processing, and payers find the complexity of claims processing warrants outside assistance from vendors that can shoulder the burden of detecting fraud, waste and abuse.

"If you have an outsourced partner who can reach to those different functional components of that payer enterprise and to its partners in the ecosystem, independently of the payer, it removes a whole level of complexity around maintenance of apps, updates regarding regulation and law and so forth," Lohse said. "It also means you don't have to promulgate new learnings through your own internal departments and functions.

"Your personnel can actually be going out and preventing the loss of money, preventing leakage or recovering money, as opposed to figuring out the general trends and applying that to the business processes and technology components of the entire process," he added. "To go out to a content expert and technology expert that can supply all those capabilities as a service to all your complex ecosystems, it means the payer can focus more on their core capabilities."