Shifty healthcare operations affect an accountable care organization’s path to shared savings
Fraud, waste and abuse remains persistent challenges within the healthcare system. Recent current events and past news coverage have illuminated these practices. And in value-based care environments, specifically where financial incentives are directly tied to care outcomes and efficiency, the stakes are even higher, in the form of make it or break it, shared savings.
For accountable care organizations (ACOs), which operate under shared savings models, fraudulent or inappropriate billing doesn’t just inflate costs, it undermines the very performance metrics used to evaluate success. Whether it’s unnecessary procedures, inflated claims or misuse of durable medical equipment, even isolated incidents of fraud can ripple across benchmarks, skew data analytics and compromise contract integrity.
But the impact isn’t purely financial. When wasteful practices go undetected, they erode the trust foundational to value-based care. Resources that should be allocated toward preventative services or care coordination must be diverted, ultimately affecting patient outcomes. And when ACOs are forced to absorb or explain losses from fraudulent activity, typically well after they’ve taken place, it limits their ability to reinvest in innovations that improve care delivery. The result is a system where savings can be easily offset by inefficiencies, making proactive fraud prevention not just a compliance function, but a strategic imperative.
Based on performance, ACOs can’t afford to rely on retrospective audits and static reporting. To protect shared savings and sustain care quality, they must identify waste in real time, act on anomalies as they emerge and ensure transparency across the care continuum. Without that, every gain in efficiency is vulnerable to being canceled out by the very practices value-based care was designed to eliminate.
Recent Medicare and ACO Fraud
In 2023, the Medicare Shared Savings Program (MSSP) hit a milestone—delivering $2.1 billion in savings. For ACOs, this was a clear signal that value-based care continues to drive measurable cost reductions. But that progress came with a sobering footnote: an almost identical $2 billion fraud scheme in catheter billing revealed vulnerabilities in the system designed to safeguard those very savings.
The scale of the fraud wasn’t just a financial blow, it distorted performance benchmarks, undermined confidence in value-based payment models and exposed a critical gap in fraud detection infrastructure. For ACOs working to balance care quality, cost control and regulatory compliance, the question is clear: how do you stay one step ahead of increasingly sophisticated fraud without slowing down your mission?
The Case: Preventing Fraud with the NY Department of Health
Data agility is the prevailing mechanism for ACOs to combat fraud, waste and abuse. In working with the New York Office of the Medicaid Inspector General (OMIG), Salient Health identified similar challenges as those faced by ACOs today: how to detect fraud early enough to prevent loss, not just recover it.
The solution was simple in concept but transformational in execution: real-time, source-level data directly into the hands of investigators, auditors and care managers. No coding. No IT intervention or analyst requests. No delay. Just immediate, visual insight.
In one particular instance, an OMIG analyst used Salient Health’s data technology platform to uncover an 800% spike in oxycodone claims in a rural county with just a few clicks. That single discovery led to a statewide investigation that not only stopped the abuse but also created a framework to prevent future misuse. The result? Over $1.7 billion in Medicaid recoveries in just three years—the most ever recorded by a state integrity unit.
This approach isn’t just a success story—it’s a model for ACOs seeking to transform fraud detection from a reactive challenge into a proactive advantage.
How to replicate fraud-fighting initiatives in ACOs
The catheter fraud scheme of 2023 doesn’t reveal a new threat. Rather, it exposed the urgency to build infrastructure that detect fraud to promote prevention rather than post-fraud clean up.
Here’s what ACOs should consider for fraud prevention:
Integrate Data Environments for a 360-degree View
Fragmented, siloed data environments create blind spots and don’t tell the entire story. ACOs need visibility to the entirety of their data – not just bits and pieces. Connecting the dots across the EMR, HIE, alert systems, claims and business systems uncovers data inconsistencies otherwise masked.
Detect Anomalies Before They Escalate
Detecting anomalies and outliers within established trends sounds like a given; however, that’s easier said than done. Data must be aggregated across the accountable care organization for the full picture. Then, irregular activity, gaps in data and red flags in high-risk categories such as durable medical equipment and controlled substances must be continually monitored. Automated pattern recognition and anomaly detection can surface issues in the moment, alerting officials before damage occurs.
Democratize Data to Empower Front-line Employees
Fraud prevention and detection isn’t just an IT issue. Empower compliance teams, care manager, and auditors to explore data directly with intuitive tools that provide access to remove technical barriers so instincts can be validated, hypotheses tested and action encouraged.
Encourage a Data-driven Culture
Data is meant to inform and expand – not to burden and suppress. Transparency works. When providers know billing patterns are visible and benchmarked, it creates a deterrent effect. When business and care teams are provided with the entire picture, they can justify decisions and make decisions based on data – not hunches. New York’s experience proves that accountability, when built into the process, drives more favorable behavior system-wide.
ACOs Can’t – and Shouldn’t Play Catch-up on Fraud
The Medicare catheter fraud case was a wake-up call, not just because of the dollar amount, but because of what it exposed: even high-performing ACOs with significant savings can be blindsided by sophisticated fraud schemes. It underscored how fragile progress in value-based care can be when detection capabilities lag behind the threats.
What we’ve seen from national headlines and state-level success stories like New York’s is that proactive, data-driven infrastructure is no longer optional. It’s essential. ACOs that invest in in-the-moment, accessible and comprehensive data environments can catch irregularities before they escalate, reinforce trust across their provider networks and protect the shared savings they work so hard to earn. Fraud, waste and abuse may be persistent, but with the right strategy, they don’t have to be inevitable.
