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Why The Human Element is Essential for LTCi FWA Program Success

Automated predictive analytics and artificial intelligence are rapidly becoming mainstream and have already been introduced as tools to  better address insurance fraud, waste, and abuse (“FWA").  Naturally, such advancements are welcome as they are making great strides in many industries, including some areas of long-term care insurance (“LTCi”). However, the reality is that to be most effective, FWA mitigation programs should not rely solely on automated tools and data analytics.

Technology is Great But the Human Factor is Essential

According to the American Association for Long-Term Care Insurance, LTC insurers across the United States paid out $14.1 billion in claims during 2023. Studies have shown that 5% to 10% of all insurance claims have a fraud component. This number can double in times of economic uncertainty, such as inflation, and does not include claims with a waste or abuse component. In light of these staggering statistics, it is understandable why insurance companies’ first reaction would be to turn to technologies like AI and predictive analytics in an attempt to mitigate the effects of FWA. However, in this urgency to use the latest, and seemingly greatest, technological tools, it is important to remember that nothing will replace how critical the human element is in the fight against FWA. 


Certainly, humans cannot do everything but neither can technology. One must supplement the other for the greatest impact. The most effective LTCi FWA programs combine automated tools with experienced long-term care professionals who possess the necessary LTCi certifications, experience and deep knowledge to develop technology solutions. Only skilled professionals are able to effectively and efficiently analyze the outputs generated by technology and implement appropriate actions to enhance FWA mitigation controls and oversight.

Where Technology Alone Falls Short in the Fight Against Fraud, Waste, and Abuse

When a long-term care insurance company attempts to manage their own FWA efforts, they typically enlist the assistance of support service providers with monitoring capabilities such as electronic visit verification (“EVV”). EVV allows for the electronic verification of in-home care visits through GPS tracking, geofencing, and time tracking and digitization of records for real-time tracking of homecare services provided. Carriers then rely on a review of the outputs to detect anomalies in the data.


Without a doubt, EVV outputs are a hugely helpful tool for close claim oversight and management, but only when used the right way and by those who are properly trained to interpret the outputs. Carriers frequently do not possess the resources needed to triage and vet the information generated from EVV – and they recognize this. Evidence of FWA may go undetected and the very monitoring tools used to spot anomalies become a tragic waste of valuable resources. This is problematic because even while companies attempt to ramp up their capabilities, opportunities to identify FWA are still silently slipping through the cracks.

When it comes to sophisticated, technological FWA-fighting tools, humans are needed to understand the relevant data points to produce the proper analytic models and algorithms. This is where many carriers find their FWA mitigation programs lacking. In a recent study, respondents from the LTCi industry reported that the primary challenge to effectively addressing fraud, waste, and abuse is the knowledge, training, and technology to do so with many companies feeling they are still in the learning and building phase. [1] Technology is limited in that it can only communicate with carriers in so many ways. Only a qualified person can know the right questions to ask the models to answer or questions to ask caregivers as part of a fact-finding investigation. It is that dialogue that helps Certified Fraud Examiners (“CFE”) further an investigation.

As any CFE will tell you, timing is critical when it comes to FWA cases and a challenging task is developing a timeline of events with each specific case. Investigators, not technology, conduct interviews, compile insightful research, and carefully evaluate EVV and analytical model outputs to determine which discrepancies are suspicious to their well-trained eyes and instincts. Those discrepancies provide investigators with critical information on how best to approach the next steps of an investigation. Computers may be trained to spot patterns in data that humans might miss, but only humans possess the emotional intelligence and critical decision-making that can piece evidence together and propel an investigation forward.


Future LTCI FWA Success Will Be Driven by Technicians Armed with Technology

It is widely recognized that skilled LTCI professionals are the first line of defense against FWA. Technology solutions will continue to evolve. The challenge the industry is facing is how technician knowledge can be captured and transferred. To be sure, LTCi is a small niche with many of its seasoned professionals on the brink of retiring in the next decade and taking their specialized knowledge with them. In fact, since the Covid pandemic, the U.S. still has roughly 2.7 million more retirees than predicted. [2] It is a trend in the wrong direction to see this decrease in expertise at the same time insurance FWA is increasing. Fuzion can help.

As a leading provider of customized LTCi services, Fuzion was among the first to recognize the steady increase in long-term care insurance claims with a corresponding increase in FWA and the negative financial impact on policyholders and carriers. Our early development of strategies and actions to identify, investigate, and mitigate FWA is recognized as a best-in-class solution in the LTCi industry. We have experienced firsthand how use of technology tools combined with the human factor of experienced CFE credentialed LTCi professionals can produce a high level of FWA program success. In just one of many instances, a savings of $11 million was achieved for a client via our customized FWA case management services. 


We can help carriers with the resource challenge of finding long-term care insurance experts. Contact us to learn more about Fuzion’s customized approach that places priority on the human factor in FWA detection and mitigation.


Milliman, Long-Term Care Insurance Fraud, Waste, and Abuse Risk Management: A Survey of Industry Perspectives, July 30, 2019


Alexandre Tanzi, “Millions of Retired Americans Aren’t Coming Back to Work as Predicted ,“ Bloomberg, November 2023.
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