Will Digital Payments Help Reduce Healthcare Fraud?

A timely article in the Guardian discusses a trend toward mobile payments and how it is changing the healthcare industry. Most notable for fraud fighters is what this new development could mean for protecting consumers. At its essence, digital currency helps to simplify the payment process and thus provides fewer opportunities for malfeasance. As the article states:

“...it is becoming increasingly apparent that digital payments in rural, remote areas settings are quicker, easier, and safer. The likelihood of fraud drops as fewer hands are needed to transfer the money. And the transaction costs decline, making it cheaper for providers to reach rural populations.”

The article provides accounts of three different locations where digital payments are making a difference in the delivery and availability of healthcare: Tanzania, Zanzibar and Pakistan. Obviously, the message is that this is positioned to become a worldwide trend. Fraud risk experts have to be hopeful on that point, as healthcare fraud is currently still a massive source of loss and damage to the economy.

No single governmental body collects and compiles information on healthcare fraud. But based on the numbers we do know, the scale of it is staggering. In the U.S., for example, the Justice Department secured $3. 8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013. Knowing that mot fraud still goes undetected, one can only guess at the total losses suffered not only in the West, but also in developing countries where controls are few and far between.

Healthcare fraud is a scourge not only because of its criminal nature. It also raises costs and impacts patients, providers and insurance carriers significantly. Awareness of this type of fraud is crucial, as it often involves collusion between multiple parties and can be more difficult to detect than other types of fraud.

As the Guardian reported, digital payment systems that are properly developed can help limit this type of fraud, at least at that part of the process. Any relief is welcome. However, it will be imperative that anti-fraud experts are consulted and assist with the implementation of such systems. Otherwise, they can carry their own fraud risk, as is the case with any digital system. Hacking, data breaches and other common methods of fraud will target such systems and security personnel will need to be trained and on guard to stop them.

Without a serious focus on isolating and reducing healthcare fraud globally, the problem will continue to spiral out of control.