Fighting fraud is becoming more meaningful to most insurers, research indicate. The Washington, D.C.-based Coalition Against Insurance Fraud (CAIF), for instance, found that 86% of insurers track the percentage of claims they refer to their SIUs and that 39% refer between one percent to three percent of claims.CAIF found that 80% of insurers track how much money anti-fraud activities save their companies, while 11% of insurers rate their investigators based on how much money they save the company.

James Quigley, CAIF's director of communications, says health insurers have had a tough year dealing with complex fraud schemes, such as "rent a patient" where a fraud perpetrator recruits low-income or minority patients and pays them a substantial sum of money to visit clinics solely for unnecessary diagnostic tests or surgery. The clinics then bill the insurance company an inflated amount for procedures that were done.

Auto insurance fraud has been marked by crime rings where accidents are either staged or are regarded as phantom accidents. For life insurers, the technology to detect fraud is "very splintered," Quigley says. "Property/casualty claims are all supported by ISO's ClaimSearch database, but life insurers don't have one unified solution to rely on."

With their backs against the wall, insurers will have to find the next breakthrough in technology to add to their "mix."

One emerging fraud reduction technology that's garnering acclaim is voice stress analysis (VSA). "When people lie, their voices change. We would be able to hook this module into our existing ClaimCapture application for fraud," says Will Fulton, president of Charlestown, Mass.-based technology solutions provider First Notice Systems.

"British insurers have had success with VSA," Quigley says. "It's new on the horizon. It functions like a lie detector test, registering stress within a person's voice. It suggests that there might be deception occurring. It's one more tool to refer to an SIU for follow up."

But the downside of VSA is that it's very "Big Brotherish," Quigley adds. "People might consider it an invasion of privacy. And it would not bode well if VSA implicated someone for possibly committing fraud, only later to be found innocent. These are all thing that insurers have to think about when they expand their programs."

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