Artifical intelligence for fraud detection is bound to save billions

ZME Science Report –

Fraud mitigation is one of the most sought-after artificial intelligence (AI) services because it can provide an immediate return on investment. Already, many companies are experiencing lucrative profits thanks to AI and machine learning (ML) systems that detect and prevent fraud in real-time.

‘Keeping an AI’ on digital fraud

According to a new report, Highmark Inc.’s Financial Investigations and Provider Review (FIPR) department generated $260 million in savings that would have otherwise been lost to fraud, waste, and abuse in 2019. In the last five years, the company saved $850 million.

“We know the overwhelming majority of providers do the right thing. But we also know year after year millions of health care dollars are lost to fraud, waste and abuse,” said Melissa Anderson, executive vice president and chief audit and compliance officer, Highmark Health. “By using technology and working with other Blue Plans and law enforcement, we have continually evolved our processes and are proud to be among the best nationally.”

FIPR detects fraud across its clients’ services with the help of an internal team made up of investigators, accountants, and programmers, as well as seasoned professionals with an eye for unusual activity such as registered nurses and former law enforcement agents. Human audits performed to detect unusual claims and assess the appropriateness of provider payments are used as training data for AI systems, which can adapt and react more rapidly to suspicious changing consumer behavior.

As fraudulent actors have become increasingly aggressive and cunning with their tactics, organizations are looking to AI to mitigate rising threats.

“We know it is much easier to stop these bad actors before the money goes out the door then pay and have to chase them,” said Kurt Spear, vice president of financial investigations at Highmark Inc.

Elsewhere, Teradata, an AI firm specialized in selling fraud detection solutions to banks, claims in a case study that it helped Danske Bank reduce its false positives by 60% and increased real fraud detection by 50%.

Other service operators are looking to AI fraud detection with a keen eye, especially in the health care sector. A recent survey performed by Optum found that 43% of health industry leaders said they strongly agree that AI will become an integral part of detecting telehealth fraud, waste, or abuse in reimbursement.

In fact, AI spending is growing tremendously with total operating spending set to reach $15 billion by 2024, the most sought-after solutions being network optimization and fraud mitigation. According to the Association of Certified Fraud Examiners (ACFE) inaugural Anti-Fraud Technology Benchmarking Report, the amount organizations are expected to spend on AI and machine learning to reduce online fraud is expected to triple by 2021.

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