The Evolving Landscape of Healthcare Fraud, Waste, and Abuse: What's Trending in 2025

Written by: Yoemy Waller, Healthcare Data Scientist

In the ever-changing healthcare ecosystem, fraud, waste, and abuse (FWA) continue to pose significant challenges for insurers, third-party administrators, and healthcare systems. With an estimated $68 billion lost annually to medical FWA out of nearly $4 trillion spent on healthcare nationwide, staying ahead of emerging schemes is crucial for maintaining financial integrity and operational efficiency.

New Patterns in FWA Detection

The healthcare industry is witnessing several notable trends in fraud, waste, and abuse as we move through 2025:

1. Telemedicine Exploitation

The post-pandemic normalization of telemedicine has created new opportunities for exploitation. Fraudsters are increasingly billing for services never rendered, upcoding virtual visits, and creating fictitious telemedicine consultations. Some schemes involve coordinated networks of providers who bill for unnecessary consultations or falsify documentation of virtual visits.

2. AI-Enhanced Coding Manipulation

As providers adopt AI-assisted coding tools, we're seeing sophisticated manipulation of these systems to maximize reimbursement. This includes algorithmic upcoding that stays just below traditional detection thresholds and systematic unbundling of services that appears legitimate at first glance.

3. Complex Network Schemes

Modern FWA increasingly involves coordinated networks of providers, patients, and equipment suppliers working together. These schemes are characterized by subtle patterns of cross-referrals, distributed billing across multiple entities, and coordinated patient steering that's difficult to detect without advanced analytics.

4. RAC Audit Evasion Tactics

With the continued focus on Recovery Audit Contractor (RAC) audits, providers engaging in FWA have developed increasingly sophisticated methods to evade detection. This includes strategic documentation practices designed to justify questionable billing and coordinated responses to audit requests that mask underlying issues.

The Technology Response

The industry is responding with equally sophisticated detection and prevention measures:

Pre-Payment Review Evolution

The shift from post-payment to pre-payment reviews continues to accelerate, powered by advanced analytics and machine learning. These systems can now identify potential FWA before payment occurs, drastically reducing the need for costly recovery efforts.

Naviquis' post-adjudication, pre-pay integrity solution exemplifies this approach, using a combination of algorithms, expert systems, and artificial intelligence to detect and prevent common errors and fraudulent activities in near real-time.

Provider Communication and Education

Modern FWA prevention recognizes that not all billing issues stem from malicious intent. Provider education and transparent communication are proving effective in reducing both intentional and unintentional billing issues.

Systems like Naviquis' Provider Relationship Management System (PRMS) create secure, automated communication channels with providers, allowing for immediate notification of potential issues and educational opportunities that reduce provider abrasion while ensuring future compliance.

The Human Element

While technology plays a crucial role in FWA detection, human expertise remains essential. Clinical reviewers, coding specialists, and fraud investigators provide critical judgment in complex cases where context and intent matter.

The most effective approaches combine automated detection with human review, particularly for clinical validation of complex claims and medical necessity determinations.

Looking Forward

As we navigate the remainder of 2025, healthcare organizations should focus on:

1. Implementing comprehensive pre-payment review systems
2. Developing provider education strategies that reduce abrasion while promoting compliance
3. Investing in technologies that combine algorithmic detection with human expertise
4. Creating cross-functional teams that include clinical, coding, and data science specialists

By staying vigilant and adopting advanced payment integrity solutions, healthcare organizations can significantly reduce their vulnerability to fraud, waste, and abuse while maintaining positive relationships with legitimate providers.

Health Plan Uncovers Significant Savings

A regional health plan serving over 200,000 members was struggling with rising claims costs despite having an established payment integrity program. Despite their best efforts, they suspected they were missing opportunities to identify waste and improper payments within their claims processing system. We must do something, but we are not certain what to do.? The cost of inaction was in millions of dollars

The Challenge

The health plan was experiencing several pain points:

• Their existing claims editing system was catching obvious coding errors but missing more complex patterns of waste
• They lacked visibility into provider-specific billing patterns
• Their post-payment recovery efforts were costly and created provider abrasion
• They had no systematic way to identify potential clinical waste

"We knew we were missing something, but we couldn't pinpoint exactly where the waste was occurring," said the plan's Chief Financial Officer. "Our analytics team was overwhelmed trying to manually identify suspicious patterns."

The Naviquis Solution

The health plan implemented Naviquis' post-adjudication, pre-pay integrity solution to enhance their existing claims review process. The implementation was completed within 60 days with minimal disruption to their workflow.

Naviquis' system immediately began analyzing claims before payment using:

• Advanced algorithms for detecting coding errors and inappropriate billing
• Comparative analytics to identify provider outliers
• Clinical validation rules to flag medically unnecessary services
• Real-time communication tools to notify providers of claim issues

Remarkable Results

Within the first three months of implementation, the Naviquis solution identified over $2.1 million in potential savings that would have otherwise been paid out.

Key areas of waste identification included:

• Unbundled Services: $650,000 in services that should have been bundled together
• Clinical Waste: $720,000 in medically unnecessary procedures and tests
• Coding Errors: $480,000 in upcoding and other coding irregularities
• Provider Pattern Analysis: $250,000 identified through provider-specific outlier analysis

Particularly noteworthy was the identification of a small group of specialty providers whose billing patterns significantly deviated from their peers. One orthopedic practice was billing for an unusually high number of complex shoulder procedures that, upon review, should have been coded as simpler interventions.

Beyond Financial Impact

Beyond the immediate financial savings, the health plan experienced several additional benefits:

• Improved Provider Relationships: The Provider Relationship Management System facilitated clear communication about claim issues before denial
• Enhanced Data Insights: Analytics dashboards provided unprecedented visibility into billing patterns across their network
• Reduced Administrative Burden: The automated system eliminated the need for many manual reviews
• Decreased Recovery Costs: Pre-payment identification eliminated the need for costly post-payment recovery efforts

"Naviquis didn't just find savings—it transformed how we think about payment integrity," noted the plan's Medical Director. "We're now proactively preventing waste rather than chasing it after payment."

Looking Forward

Building on this success, the health plan is now expanding its use of Naviquis to include additional claim types and is integrating the insights gained into their provider education and contracting strategies.

For health plans looking to enhance their payment integrity efforts and reduce waste before payment occurs, Naviquis offers a proven solution that delivers rapid ROI while maintaining positive provider relationships.

To learn how Naviquis can help your organization identify and prevent waste in medical claims, contact us at [email protected] or visit www.naviquis.com.