Fraud detection AI platform for insurance

The dynamic nature of fraud, the emergence of new fraud methods in the insurance industry, and the inability of insurance companies to prevent, identify and deal with it may lead insurance companies to bankruptcy in the not-so-distant future. Considering that insurance companies, as the main body providing insurance services and paying damages, play a significant role in preventing and detecting fraud, the types of strategies they use in dealing with it will be considerable.

Nowadays, it is necessary to identify and analyze the phenomenon of fraud, which leads to an increase in the costs of the insurance organization, to control the factors and the survival of these companies.

Risk assessment and fraud detections for insurance companies

Consequences of fraud in the health insurance industry

Fraud has many direct and indirect effects on insurers and policyholders. Insurance frauds can lead to increased social and moral risks through the behavior of policyholders and people involved, which in the long run, imposes a budget deficit and a heavy financial burden on the insurance industry. Insurers’ fraud seriously threatens the insurance industry’s growth, development, and profitability, destroying trust and transparency by questioning the principle of good faith. Fraud in the insurance industry limits the service provided to the target community, resulting in decreased satisfaction.

Underlying factors of fraud in insurance industry

The underlying factors of fraud in the supplementary medical insurance industry have different origins, and insurance companies can easily find a controlling solution by identifying and classifying them.

Factors such as the ever-increasing increase in insurance premiums, which causes people to pay unnecessary costs for insurance; not preventing fraud and not fighting after it is detected; eliminating primary health assessments existing in advanced countries in terms of industry and insurance; and delays in paying the claims of medical equipment companies, are among the underlying factors of insurance fraud

In addition, the lack of proper and structured processes to deal with people who cheat and the variety of medical equipment create favorable conditions for profiteers to take advantage of the situation and receive a lot of money from insurance companies.

Other factors that contribute to insurance fraud include:

• Lack of a comprehensive educational system to recognize them in the treatment sector
• Attitudes and beliefs of people about creating unnecessary expenses in exchange for paying insurance premiums
• Unawareness of the insured and their unfavorable economic situation

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Examples of health insurance fraud

Fraud in the health insurance industry can be done by different people, whether insured, insurers, or service providers. The most common fraud in medical insurance includes the following:

• Falsification of doctors’ letterhead or other related documents
• Making seals in the names of different people
• Copying an expense header multiple time
• Repetition of papers with high numbers
• Membership in two supplementary insurances
• Non-membership of individuals in the insurer’s organization
• Manipulation of a person’s membership date in the insurer’s organization to remove the waiting period limit
• Registration of the insured with another shortcode
• Handling of documents by unrelated experts
• Using equipment labels interchangeably
• Using low-quality material and requesting the code of high-quality material
• Failure to give leaflets to the pharmacy and to provide expensive drugs

Solutions to deal with fraud in insurance

By considering the underlying factors and consequences of fraud, it can be prevented with these methods:

Laws and regulations

• Implementing punitive and incentive plans for doctors and pharmacies
• Insurance representatives and brokers fining in case of fraud
• Establishing strict legal sentences for fraudsters

Processes

• Monitoring medical centers and insured people by insurance company supervisors
• Compilation of comprehensive and complete regulations in the field of medical equipment
• Deduction of tax from doctor’s bills and treatment centers for issuing each document
• Recruiting expert staff to investigate cases with a high cost of medical equipment
• Signing contracts with single-brand medical equipment companies
• Simultaneous use of several fraud detection methods and comparing their results
• Compilation of document handling procedures by experienced insurance experts
• Checking the stamp, date, signature, and header of bills of physiotherapy centers

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Technology

• Launching an integrated and comprehensive system to record information, determine service ceilings, file electronic files, etc.
• Insurance access to the HIS system of hospitals
• Comprehensive software design with the participation of an insurance fraud expert
• Launching a comprehensive site for uploading circulars and notices
• Issuing patient referrals systematically

StrAIberry solutions to prevent health insurance fraud

One of the measures taken by StrAIberry is to enter into exclusive contracts with dental insurance companies. Following the agreement with these companies, all people who are covered by the health insurance of these companies must install the StrAIberry app, perform medical checkups once a week and upload the required images. StrAIberry’s artificial intelligence detects the problems that exist for users by analyzing each tooth of the user.

In the dashboard of insurance companies, the information of all the users they cover is registered, and they can have an electronic record of the problems of all their teeth. As a result, no user can lie about the costs and the treatment he has done. This precise and regular monitoring factor makes insurance companies save money and invest those amounts in more practical areas.