Fraud is so common that there isn’t any field that does not have to face some sort of fraudulent activity. The health care industry is no exception to fraud. The result of the frauds we will be discussing is that some person has to face an emotional shock or face the consequences of the fraud and it’s not the person who carried out the fraud. The medical institution itself faces problems due to the type of fraud we’ll be discussing. Afterwards we will discuss fraud prevention solutions. To help elaborate our discussion and to make it easier to understand we will mention a hypothetical situation.

John has medical insurance from medicare. He has a good job and pays his premiums on time. He remains physically fit and has regular checkups done. He has heard of identity theft but never encountered it. Every year his medical insurance provider sends him a report of his yearly usage and premium payments. This year when he opened the report he was shocked to find how much of his allocated insurance amount he had used. He couldn’t believe it since he only went to the doctors office 4 times. He checked the record in detail and found procedures that had been which he had never heard about. He called Medicare and explained the situation, they said the doctors have the required details and there is nothing they can do at the time. John explains to them that the doctor’s visits were carried out in another city. They tell him that it could be a case of identity theft and that they will issue him another card.

Fraud in the health care industry via impersonating a person is one thing some people even go as far as to copy credit cards of another person and make payments using that. The following hypothetical situation will elaborate what we are trying to convey and also lay precedence as to why digital KYC is essential.

Mark is a hardworking individual, he pays his taxes. Like everyone else he uses plastic currency instead of cash for the majority of his purchases and transactions. Little does he know that someone has copied his card and it is being used by another person. Mark doesn’t really check out his statements as he knows he has plenty of cash in his account and knows his expenditures. Yet still his bank’s anti-fraud department picks up on something. They notice that he has made some online payments that coincide with payments he made at a physical outlet. Just to make sure they give him a call and ask him if he made any payments on an online doctor’s site. Mark is concerned at this time he tells them that he doesn’t use any online doctor consultancy. They ask him if he has checked his statements recently. He tells them he hasn’t. They tell him he should as it was dumb luck that the payments coincided, otherwise his account balance would have continued dwindle and he would never have known that he is a victim of identity theft. They cancel his previous card and send him a new one.

As you can see in the hypothetical situation above, the online doctor’s website will get a chargeback and they will get a bad repute for not having a strong enough fraud prevention system.

Fraud Prevention

What is an Effective Fraud Prevention Method/Solution?

Having given two examples of fraud that happen in the health care industry, it is important to discuss how the medical institutions and websites could have prevented fraud. There are many third party identity verification and background check service providers. These digital KYC softwares use advanced AI and HI (Human Intelligence) to pick up such fraudulent attempts. In the 1st case had the hospital in concern implemented such a solution then it would have identified that the credentials presented are fake and that the information does not match with that of the original patient.

In the second case the same software could have intermediated the payment process and have shown that the customer using the card is not the owner and that would have been the end of it; no chargebacks and no bad reputation.

How Do Fraud Prevention Systems Work and Deal with Identity Theft?

As mentioned in the previous part that these 3rd party verifiers rely on AI and some even use HI as a second check to look out for false positives. Using the power of the Internet, a web camera or a smartphone camera they are able to carry out their identity verification tasks. To elaborate this, let us take the scenarios mentioned earlier on in this article.

In the first case, the hospital staff could have asked the patient to come over to a system with a webcam and that software implemented. They system would have informed the patient that the session will be recorded. Then it would have requested the patient to face the camera, show the medicare card and another ID to verify that they all match and are not forged or fake.

In the second case involving the online doctor website. After the website would have taken all the information including the credit/debit card information. The verification software would have taken over and asked the person to face their webcam or if they don’t have one to use their smartphone camera. After telling them that the session is recorded, it would check for excessive make up, a picture instead of a live face. After clearing that it would have asked them to show their credit card and then their ID, focusing on their name, dob, and address. After verifying all information from the already provided one and checking various global watchlists, if everything is all right, it lets them proceed otherwise it halts the registration process. Any person who would be attempting to do fraud via identity theft would be deterred at the moment he would be asked to face the camera.

In conclusion

Fraud can be prevented by us being a little more vigilant and careful with our personal information. At the same time if the various institutions that handle payments be a bit more strict with their KYC processes and use third party verifiers to make an effective fraud prevention system it would do wonders in curbing overall attempts.