Forward-thinking fraud, waste and abuse vendors adopt service-based approach
Vendors also supplement internal legal and special investigative units, Loshe said. Major players in this market, such as IBM and Optum, have been able to provide these services in a centralized and efficient way that lowers the cost to the payer.
"It's just an entirely new way of addressing the problem," Lohse said. "It's much more effective and much cheaper. As we go through all of these legal reforms and so forth with the [Affordable Care Act], it exerts a tremendous demand and distraction to payer operations. You're seeing an uptick in investment in the technology to put the finger in the dike of potential problems."
Regulatory changes open more avenues for fraud, waste and abuse
The ACA has changed the marketplace for payers that offer various kinds of coverage. This exposes them to different opportunities for fraud, waste and abuse. Other changes, such as the ICD-10 conversion, offer more opportunities for mistakes, intentional or otherwise. Additionally, patients face higher out-of-pocket medical costs, which may lead to new fraud schemes.
"Whether that is fraudulently using someone else's identity when you get your healthcare, or working in collusion with a provider to obtain services for less than the out-of-pocket costs you would otherwise be forced to pay, the payer is presented with many new challenges that are not already baked into their processes," Lohse said. "They have to be able to adjust very quickly, so they are looking for an external content expert ... to help address those needs in a very speedy way. The value proposition is really about being less expensive, more effective and faster."
Payers often invest in multiple, complementary systems
As this market grows, payers are likely to invest in systems that overlap but provide a more comprehensive approach to fraud, waste and abuse detection and prevention. This approach offers multiple viewpoints using various data sets.
"I don't think there is a single dominate player in the marketplace that can address all those different segments completely. Each of the identified vendors specializes in a different thing," Loshe said. "In the hypothetical past, the payer may have had all of these capabilities in-house and gradually been finding partners to take on different components, and in some cases these components overlap.
"It may be that one vendor has particularly good skills in identifying providers before they come into a payer's network in their state, and another may be particular good at identifying potentially fraudulent providers before they come into a payer's network across the entire country," he added.
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