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10 Ways Insurance Agents Spot Fraudulent Claims

Use Sophisticated Computer Systems to Detect Suspicious Billing

Fraud often occurs through billing, and quite often for medical claims. Physicians or clinics may bill insurance companies for services never rendered, for example, or for procedures or services that weren't medically necessary. Or they may jack up the cost of certain services, charge more than once for the same service or "unbundle" claims -- billing, say, for three separate surgeries on a patient whose three toes were operated on at the same time. Complex computer systems have been developed to tease out suspicious bills and billing patterns from physicians and medical establishments [source: Barrett].

But billing fraud isn't limited to medical claims. Auto repairs are another area rife with billing fraud. When some insureds discover their car insurance will cover the cost of repairing their dented hood -- after they pay their deductible -- they'll approach their repair shop and see if the cost of their deductible can be added to the bill. Wink, wink, nudge, nudge. Most reputable shops will refuse, of course, but there are plenty willing to comply [source: Insurance]. Or the shops themselves will, say, slap a reconditioned bumper on your car, then bill your insurer for a new one. Again, in these situations, insurance companies' computer systems can pull up claims where repairs appear inflated, or don't square with other claim information.