IDC Health Insights Assesses U.S. Healthcare Payer Fraud, Waste, and Abuse Solutions

IDC Health Insights Assesses U.S. Healthcare Payer Fraud, Waste, and Abuse Solutions

IDC Health Insights Assesses U.S. Healthcare Payer Fraud, Waste, and Abuse Solutions

The FINANCIAL -- IDC Health Insights announced the availability of a new IDC MarketScape report, IDC Marketscape U.S. Healthcare Payer Fraud, Waste and Abuse Solutions 2014 Vendor Assessment, according to IDC.


Priority for fraud, waste, and abuse is rising quickly on the executive agendas of U.S. healthcare payers and investment in FWA solutions (software and services) will rise rapidly in 2014–2015. As a result, payers are seeking guidance on how to invest in the different types of offerings available and to better understand how the major vendors compete with each other.

This IDC Health Insights study uses the IDC MarketScape methodology to describe and assess the offerings and capabilities of eight FWA solution vendors competing in the U.S. healthcare payer market. This methodology is based on a comprehensive framework and a set of parameters that are used to assess those factors expected to be most important to the success of a given solution in a given market over both the short term and the long term. A detailed profile supports the evaluation of the offerings from each of the eight selected vendors. These include the components of the vendor's offerings, their evolution, strengths, and challenges, according to IDC.


97% of surveyed payers report that they now plan to invest in FWA solutions. IDC Health Insights' annual survey of payer IT and line-of-business leaders indicates that demand for payer FWA solutions will rise steeply in 2014–2015 compared with 2013–2014. For 2014–2015, payers report that they plan additional investment/enhancement to an existing system (47%) or plan to invest in FWA for the first time (47%). Another 3% said they planned to replace a system. In the prior year's survey, far fewer payers reported that they planned additional investment/enhancement to an existing system (18%), new investment (12%) or a replacement system (16%), while the number of payers reporting plans to invest in FWA doubled.


Predictive analytics create a major departure from "pay and chase" industry practices. Predictive analytics create accurate, cost-effective new ways to prevent or deter FWA. Historically, impressive return-on-investment (ROI) rates for FWA solutions have been based on rules engines and labor-intensive recovery efforts. Predictive analytics further enhance payer capabilities to identify and score questionable claims, procedures, and provider behaviors prior to payment, according to IDC.

 

Payers require a more adaptive, cost-effective defense as consumer-based fraud evolves along with the exchanges. Industry participants anticipate that criminal and opportunistic perpetrators will attempt to take advantage of disruption caused by the implementation of consumer-oriented health insurance exchanges (HIXs). To address the increasing frequency of attempts by perpetrators to commit low-dollar, "under the radar" FWA, payers need to invest more in adaptive, cost-effective FWA solutions.


FWA solutions such as those described in this document promise to address evolving threats with increased accuracy, adaptability, and cost-effectiveness. Predictive analytics promise to give payers the opportunity to fend off FWA rather than incur the costs of pursuing perpetrators after they have been paid. Solutions delivered through off-premise delivery models can be more responsive to evolving threats at lower overall price points. Technology solutions (software as a service [SaaS] and cloud) that are complemented by outsourced services (e.g., analytics as a service) are gaining broad acceptance among payers. Smaller payers in particular stand to gain the most by reaping large-payer economies of scale and ROI for their investments in off-premise FWA solutions, according to IDC.