A new survey reveals that fraud, waste, and abuse (FWA) account for up to 40% of health insurance claim costs in the Asia-Pacific region, a significant burden for insurers. Conducted by the Asian Development Bank (ADB) and Asia Care Group (ACG), the study highlights the challenges insurers face in identifying and addressing FWA.
Over 80% of insurers reported that provider-induced issues—such as unnecessary treatments and inconsistent care—are the primary contributors to FWA, with more than 90% pointing to overprescribing as a major concern. In addition, the survey found that provider behaviors, rather than policyholder actions, are driving these issues.
Despite the growing concerns, most insurers are struggling to implement effective fraud detection strategies. Around 90% of insurers reported a lack of structured data collection systems, specifically the absence of essential ICD and DRG codes that are crucial for accurate FWA analysis.
The survey suggests several ways to address these challenges. The majority of insurers advocated for the enforcement of electronic record standards for providers, and over 70% supported the collection and publication of provider data in standardized formats. Additionally, establishing national data exchange standards was highlighted as a critical step toward transitioning from paper-based to electronic claims processing.
Currently, many insurers continue to rely on traditional, labor-intensive methods such as forensic reviews and pre-approvals, rather than leveraging advanced technologies like big data analytics and artificial intelligence (AI). Insurers often focus on basic metrics, such as appointment frequency, rather than more complex indicators like daycase rates or admissions for conditions sensitive to ambulatory care.
The survey also identified global technological solutions that could greatly enhance FWA detection, though most require structured data as a foundation. With 239 health insurance leaders from both commercial and social insurers participating, the survey is the largest of its kind in the region.
As the industry grapples with these challenges, the push for more robust data collection and advanced detection systems grows stronger.
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