How BCBS Massachusetts is using AI to fight fraud

Blue Cross Blue Shield of Massachusetts is using artificial intelligence to detect more fraudulent claims, an issue that costs the healthcare system billions of dollars every year and raises costs on health plan members. 

The payers' news service wrote Jan. 9 that the company has developed an algorithm that looks through its claims data and flags any suspicious activity before the claim is paid. While BCBS had a fraud detection program previously, it only reclaimed money after the claim was paid.

Potential fraud cases are detected by the algorithm and then uploaded to a dashboard for review. If there is an issue, the claim is frozen until a BCBS team can investigate. If the review is completed with no further issues found, the claim is paid and BCBS educates the provider on how to avoid the issue in the future. If the claim is fraudulent, the claim is denied and potentially reported to law enforcement. All that information is then provided to the algorithm to improve the overall process for next time.

"What would take the team weeks to do manually, the algorithm can complete in a day." Chief Data and Analytics Officer, Himanshu Arora, said.

To date, 65 to 70 percent of issues flagged by the algorithm end up being confirmed cases of potential fraud or abuse, a figure that is expected to grow.

“Moving forward, we will further enhance the model and share knowledge with our sister Blue plans so we can continue to root out fraud and abuse from the system and save our members and accounts money," Mr. Arora said.

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