ABSTRACT

This chapter aims to clarify the impact of electronic claims submission on opportunities for fraud and also on opportunities for fraud control. The general public think about computer crimes, they often imagine hackers gaining access to mainframe computer systems from their own personal computers, taking control, and then manipulating payments to their own advantage. The Internal Revenue Service (IRS), with their electronic filing program, requires a separate signature document for each electronically filed tax return, although they do not wait for it to arrive in the mail before processing the electronic return. The IRS created a very similar situation with their electronic refund program: An electronic signal received by the government triggers an electronic payment, in most cases without human intervention. Both in health care and in tax administration, electronic claims processing offers substantial opportunities for speedier service. The idea is that totally electronic claims-processing systems can be protected from fraud by implementing comprehensive batteries of up-front edits and audits.