With the emergence of new technologies, nearly all industries have embraced the digital world and moved to online platforms, and the healthcare sector is no exception.
Like other industries, healthcare also contains several risks of fraud such as data breaches or money laundering. As healthcare becomes more complex, it is important to manage the threats to the integrity of the institution.
In 2022, about $1.1 billion was paid to either private individuals or governments in healthcare fraud settlements in the U.S. Thus, healthcare institutions like hospitals or clinics also need to have AML procedures in place to combat this as illicit activities can have adverse effects on both hospitals and patients.
Anti-money laundering procedures are the processes put in place to identify and prevent fraudulent activities. Let’s explore these procedures in the healthcare industry.
AML Monitoring in the Healthcare Industry
Money laundering in hospitals or clinics can occur in several ways and it is important to know what to look out for. Below are some of the most frequently occurring types of money laundering in healthcare.
Sometimes, healthcare providers tend to create forged invoices, services, or claims to charge their patients more. For instance, they may include medicines or tests that are not needed. There may also be cases of insurance fraud.
Oftentimes, there are instances where hospitals accept unauthorized payments for prescriptions, referrals, or medical services that may not be easily permissible. This would impact patient care negatively and increase costs for the hospital.
Some individuals sometimes create fake prescriptions to purchase certain potentially harmful drugs and then proceed to sell them illegally. This can be very harmful to patients and the hospital or clinic’s reputation.
Sometimes, patients might provide false information to make insurance claims. They may use someone else’s data to obtain the claims to avoid their medical expenses. Thus, such insurance fraud also needs to be looked out for.
Like other industries, hospitals are also increasingly becoming reliant on digital platforms. This can open them up towards cyberattacks which can result in huge losses for both hospitals and their patients.
Hence, the healthcare sector is also susceptible to financial fraud due to its increasing complexities. Therefore, hospitals also need to have AML compliance policies in place to ensure that their systems and patient data are safe and all information is accurate.
How can AML Solutions help Improve the Healthcare System?
Anti-money laundering processes are a set of procedures or guidelines that are established to identify, combat, and prevent fraudulent activities. These processes play an exceptional role in ensuring ethical and safer medical practices. The following are a few of the procedures that can help hospitals prevent crime.
AML Risk Evaluation
Healthcare institutions need to perform risk assessments to determine the potential threats associated with their operations or their patients. They can identify situations that could put them in a vulnerable position and can take steps to prevent them. These steps set the tone for established AML screening processes.
Customer Due Diligence
Hospitals and clinics must also perform due diligence procedures when they are forming new business alliances. This means that they must confirm the identities of their partners, stakeholders, suppliers, and patients. They must do this to ensure that neither party is involved in illicit activities and wouldn’t pose threats to the hospital.
Training for Staff
Hospitals should also organize training sessions to educate their employees about their AML systems and help them understand the degree of significance these procedures hold for them, the hospital, and its patients. A well-collaborating team can be very helpful in combating fraud.
Hospitals usually obtain large chunks of data from their patients and partners. To analyze that data, hospitals can deploy advanced data analytics techniques and machine learning to identify suspicious activities that may not otherwise be visible. This would also enable smooth digital onboarding.
Hospitals and clinics can use the methods to ensure trouble-free and efficient AML verification processes and safeguard their interests and those of their patients.
Money laundering is not only a monetary inconvenience, but it also negatively impacts patient healthcare. Hospitals possess large volumes of data, and the lack of proper AML security systems can, thus, make it harder for them to determine whether their partners and patients are legitimate.
Therefore, by complying with anti-money laundering procedures, hospitals can create a safer and more ethical industry. They can, hence, ensure compliance with legal regulations with their prime focus on patient care.