Health insurers struggle with fraud, waste and abuse detection methods

More than 80% of insurers reported provider-induced FWA.

Fraud, waste, and abuse (FWA) account for an estimated 30% to 40% of health insurance claims costs in the Asia-Pacific region, according to a survey conducted by the Asian Development Bank (ADB) and Asia Care Group (ACG).

Furthermore, the survey indicated that provider behaviours contribute more to FWA than policyholder actions. 

Over 80% of insurers identified provider-induced demand and inconsistent care pathways as significant issues, whilst more than 90% cited overprescribing as a major concern. 

Despite these challenges, most insurers lack structured data collection systems, with 90% reporting that they do not collect ICD or DRG codes necessary for meaningful FWA analysis.  

The majority suggested enforcing basic electronic record standards for providers, whilst over 70% supported collecting and publishing provider data in a standardised format.

Establishing national data exchange standards was also seen as a key step in transitioning from paper-based to electronic claims processing.  

Whilst insurers are exploring FWA detection strategies, many still rely on labour-intensive methods such as forensic reviews and pre-approvals rather than advanced analytics, big data, or AI.

The survey found that most insurers focus on basic utilisation metrics, such as appointment frequency, rather than more complex indicators like daycase rates or admissions for ambulatory care-sensitive conditions.  

The study identified global technology solutions that could significantly improve FWA detection, but most require structured data as a foundation. 

With 239 health insurance leaders from commercial and social insurers participating, it is the largest survey on FWA in the region to date.