Programmatic Fraud Can Overwhelm Claim Review Budgets
Programmatic fraud can infiltrate claims of all sizes and does not discriminate between cases with small or large class sizes. Today, even small-budget settlements can be flooded with millions of claims, regardless of the anticipated claims rate initially set during case evaluation.
This means it is essential for counsel to negotiate a sufficient budget with the claims administrator to handle the potential influx of fraudulent claims. Failure to account for this possibility can lead to overwhelmed budgets and significant challenges in maintaining the integrity of the claims process.
Fraud Causes a Significant Claims Review Budget Shortfall
Here is one example that highlights the importance of budgeting for large claim volumes. In a recent case, a claims administrator anticipated receiving around 30,000 claims and set a budget of $30,000 for the review. Nearly nine million claims were ultimately submitted. The administrator's budget, while sufficient for the original estimate, fell drastically short of what was needed to review the actual number of claims, including identifying fraudulent submissions. This led to friction between counsel and the administrator, as the agreed-upon payment could not support the necessary work to prevent fraudulent claims from compromising the settlement. The failure to account for such an uptick in claim volume and associated costs caused avoidable financial strain and operational challenges.
This example underscores the importance of negotiating a budget that anticipates the unfortunate reality of fraud and an unexpected surge in claims. Given the rising threat of programmatic fraud, it is critical to incorporate flexibility into the budgetary planning process. When discussing pricing during the bidding or proposal stages, both counsel and administrators should consider the potential for tens of millions of claims, even if a smaller number is initially anticipated. A failure to plan adequately can result in incomplete claim reviews, leaving the settlement vulnerable to fraud and diminishing the overall benefit to legitimate claimants.
The Role of Technology in Mitigating Fraud Efficiently
While adjusting budgets to accommodate the "new normal" of claims fraud is essential, it’s equally important to leverage advanced technology to optimize the claims review process. This is where solutions like ClaimScore can play a pivotal role. ClaimScore’s platform offers sophisticated tools designed to handle large claim volumes efficiently, significantly reducing the time and resources needed to identify and filter out fraudulent submissions. The platform's ability to conduct advanced data analysis and cross-reference claims ensures that fraudulent patterns are caught early, preventing the settlement from being overwhelmed by illegitimate claims.
By utilizing technology that enhances the accuracy and speed of claim reviews, claims administrators can mitigate the need for constant budget increases. Although the risk of fraud and large claim volumes today requires higher budgets, integrating ClaimScore’s advanced review capabilities can help control costs by streamlining the process. Claims administrators and counsel can focus on ensuring fairness and accuracy, rather than getting bogged down in time-consuming manual reviews. Ultimately, balancing a well-negotiated budget with the right technology is key to managing large volumes of claims without compromising on quality or efficiency.
With the right preparation and the use of cutting-edge tools like ClaimScore, administrators can navigate the challenges of high-volume claim fraud, ensuring a smoother and more secure claims review process.
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