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Fraud Triage Programs

Using triage to review insurance claims can improve the rate of fraud detection while generating considerable savings for both carriers and their policyholders.

By Kirk L. Madsen | Updated on January 31, 2010
Triage plays a critical role in hospital emergency rooms. Ensuring that patients with the most urgent needs are treated first has proven to dramatically improve the rate of lives saved. This same concept holds true for insurance. Using triage to review insurance claims can improve the rate of fraud detection while generating considerable savings for both carriers and their policyholders.

Insurance companies want to pay legitimate claims while at the same time avoid paying suspicious ones. A comprehensive triage program supports this goal by quickly identifying suspicious claims and mapping out a distinct plan for investigation. By deterring the perpetrators who run what law enforcement officials calculate is a multi-billion-dollar “industry,” insurers can protect policyholder assets, which benefits our entire industry. With an established triage program in place, a carrier’s special investigations unit (SIU) can increase referrals by as much as 25 percent, leading to an even larger increase in appropriate claim denial rates. This translates into millions of dollars each year in reduced payouts and indemnity reserves — all while greatly increasing the number of criminal convictions.

We All Pay

The Federal Bureau of Investigation estimates that the total cost of insurance fraud (excluding health care) exceeds $40 billion per year. That means insurance fraud costs the average U.S. family between $400 and $700 annually in the form of increased premiums.

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