Fraud: How Big is the Problem for Dental Insurers?
According to the National Health Care Anti-Fraud Association, of the $250 Billion spent annually in the U.S. on dental care procedures, an estimated $12.5 Billion, or 5%, is lost to dental insurance fraud, waste and abuse (F/W/A).*
Insurance companies attribute these losses, in part, to practical constraints making it impossible for their clinical analysts to review every claim submitted. In fact, clinical analysts are typically able to review less than 1% of submitted claims. Audit costs average $17,200 and many recoveries are significantly less than the audit cost, In 60% of reviewed claims, no issues are found, so they’re still paid. For CMS (Medicare and Medicaid) plans, funds are often non-recoverable.
Current off-the-shelf F/W/A software mimics manual methods — retrospective analysis of post pay utilization and procedure utilization to detect variations from the norm (e.g., whether the practitioner is performing significantly more root canals than peers). Current automated methods don’t consider whether the diagnosis and treatment were appropriate. Although some statistics-based F/W/A products exist, no current application reviews ALL records documents and exam data (including images). New advances in artificial intelligence (AI) could be utilized to improve current F/W/A detection methods. However, developing such state-of the-art solutions requires specialized technical expertise and experience that most dental insurance companies don't have.
Patients are becoming increasingly wary of dental fraud and the media is reporting that their concerns are well-founded. According to a recent article in The Atlantic, "A multitude of factors has conspired to create both the opportunity and the motive for widespread overtreatment in dentistry."
* Source: https://www.nhcaa.org/