All Engines
Healthcare Economics Engine

Waste, Fraud, and Abuse Detection

Identify fraudulent billing patterns, wasteful care, and abusive practices with AI-powered anomaly detection that protects 1-2% of annual spend

The Silent Theft

FBI estimates healthcare fraud costs $80B annually—about 3% of total spend. Provider bills for services never rendered. Member uses dead relative's insurance card. Pharmacy dispenses brand drugs but bills for expensive specialty meds. Your claims system pays it all because nobody's watching.

Fraud/Waste Rate
1-3%
of healthcare spend
Typical Recovery
$300K-$1M
per 5,000 lives annually
Detection Time
6-18mo
traditional methods

What Fails Without This Engine

  • Provider bills for phantom office visits—pays for 18 months before anyone notices
  • Member lets unemployed sibling use their insurance card—costs you $47K
  • Pharmacy systematically overbills by $8-$12 per claim—adds up to $180K
  • No real-time detection: fraud discovered only during annual audits

AI-Powered Fraud Detection

Our Waste, Fraud, and Abuse Engine runs continuous behavioral analysis across providers, members, and pharmacies. Machine learning models flag statistical outliers, cross-reference claims against clinical plausibility, and prioritize investigations by fraud probability and financial impact.

Fraud Detection Algorithm
// Provider behavioral analysis FOR each provider: pattern_score = ANALYZE( billing_frequency vs peers, diagnosis_code_distribution, upcoding_propensity, service_mix_anomalies, weekend_billing_spikes ) IF pattern_score > FRAUD_THRESHOLD: total_exposure = provider_payments_last_24mo FLAG "High-risk provider - investigate" // Member eligibility verification FOR each high_cost_claim: IF member_age inconsistent_with_diagnosis OR utilization_spike_after_coverage_start OR duplicate_member_id_usage_different_locations: FLAG "Identity fraud - verify eligibility" // Pharmacy abuse detection FOR each pharmacy: dispense_patterns = CHECK( brand_vs_generic_ratio, specialty_drug_concentration, early_refill_frequency, off_label_billing ) IF dispense_patterns indicate_systematic_overbilling: annual_overcharge = ESTIMATE_total_impact FLAG "Pharmacy investigation - recover" // Clinical plausibility check IF procedure NOT medically_necessary_for_diagnosis OR service_frequency exceeds_clinical_guidelines OR anatomically_impossible_claim: FLAG "Wasteful or fraudulent - deny/recover"

Engineering Architecture

Core Components

  • Provider Profiling: Peer comparison, billing pattern analysis, specialty-specific outlier detection
  • Member Identity Verification: Biometric flags, eligibility cross-checks, usage pattern anomalies
  • Clinical Plausibility Engine: Diagnosis-procedure matching, anatomical validation, guideline adherence
  • ML Anomaly Scoring: Supervised learning trained on confirmed fraud cases

Detection Metrics

Detection Rate
1-3%
False Positive
<8%
Avg Time to Detect
7-14d
Recovery Rate
65-85%

Real-World Applications

Phantom Billing Ring

  • Engine flags provider billing 220 office visits/month
  • Peer average: 85 visits/month for same specialty
  • Cross-reference shows 40% of visits lack supporting documentation
  • Investigation reveals $340K in phantom billing over 14 months
  • Full recovery via provider settlement, contract termination

Member Identity Fraud

  • ML flags member with sudden $78K utilization spike
  • Pattern: maternity + NICU claims, member age 53, hysterectomy history
  • Investigation: daughter using mother's insurance card
  • Recovered $78K, terminated coverage, referred to law enforcement
  • Engine identified 6 similar cases same year, $240K total recovery

Stop Paying for Fraud

Upload your claims data. Our AI will flag suspicious patterns in under 24 hours. See exactly where fraud, waste, and abuse are costing you money.

Request Engine Demo