What You Don’t Know about Fraud, Waste and Abuse Part 2

In order to completely remedy the overpayment issues – meaning fraud, waste and abuse (FWA) – organizations must illuminate the areas of this issue that have not been tackled yet. In 2016, it was estimated that the Medicaid improper payment rate was 10.5% or $36 billion. Strong FWA solutions that are integrated into a larger overpayment prevention program should enable quicker progress when identifying the cause of leakage at your organization.

Here’s what you don’t already know about FWA – and how you can fix it:


Waste Elimination Through Efficiency

Waste is spending that can easily be eliminated without causing harm to consumers or reducing the overall quality of care people receive. Wasteful spending can amount to as much as one-half of US healthcare spending. One of the main culprits of this waste is administrative complexity. Simply put, waste can easily be eliminated through efficiency. Efficiency is both a mindset and a practice, and health plans who fail to focus on this will struggle significantly to fight FWA.


Waste and Abuse Overpower Fraud

Fraud is when someone purposely plays the system in order to benefit from it. However, fraud is quite rare, making up roughly 7% of all healthcare spending combined with abuse. Unfortunately, it’s easy to market the fear of fraud, which has led to overinvestment in technology that specifically addresses fraud above waste and abuse, which is erroneous because those two combined far exceed fraud.


Partnerships Can Help Combat FWA

When it comes to combating waste, collaboration between health plans, employers, patients, and providers is absolutely imperative. It can be a lot of effort, but the benefit lies in improving patient safety while reducing unnecessary costs. Working in tandem with providers means treating it as a partnership where both parties are invested in resolving and preventing FWA.


Ongoing, Shared Reporting

Health plans should be regularly looking into certain metrics but also share their findings because it could prove to be helpful to share with vendors, staff and providers. When information is being shared more freely and cohesion is occurring, all parties benefit from the data extrapolated from payment integrity programs. 


The bottom line is that your goal should be to shift efforts from post-pay to prevention.

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