Healthcare fraud prevention across the care lifecycle

Healthcare fraud is becoming both costlier and harder to detect. In fiscal year 2025, the U.S. Department of Justice recovered a record $6.8 billion in healthcare-related settlements under the False Claims Act, more than double the previous year’s recovery of $2.9 billion. 

The cause of the increase in healthcare fraud is complex. Newer digital enrollment channels, telehealth adoption, and rising payment volumes have all created new opportunities for bad actors. Additionally, fraud schemes can now be executed faster and at greater scale using AI tools, which can overwhelm manual systems. 

Effective healthcare fraud prevention requires more than just reviewing suspicious claims after the fact. Payors, providers, and healthcare platforms need a layered, data-driven approach that helps identify risk early while still providing a seamless experience for patients, members, and legitimate providers.

Healthcare fraud happens across the full care lifecycle

Healthcare fraud isn't limited to false claims or improper billing. As healthcare continues to rely on digital processes, there are a growing number of opportunities for fraudsters to exploit at every stage of the lifecycle, including: 

• Enrollment and onboarding: Synthetic identities can create fraudulent member accounts or fake provider enrollment to siphon off reimbursements, including from Health Savings and Flexible Spending Accounts (HSA/FSA). 

• Income or eligibility misrepresentation: Falsification on Medicaid and ACA exchange applications can lead to ineligible individuals receiving access to benefits. 

• Premium and patient payments: Fraudsters may misuse bank accounts, initiate ACH fraud or credit card fraud, submit payments from invalid or closed accounts, or use fraudulent payment credentials to access and maintain healthcare coverage.

• Claims and reimbursements: Fraudulent activity can include billing schemes such as upcoding, unbundling, and ghost patients, along with claims for medically unnecessary services and telemedicine-related fraud that can bypass traditional clinical oversight.

• Disbursements and payouts: At the payout stage, fraud can show up as misdirected provider reimbursements, diverted capitation payments, HSA/FSA disbursement fraud, or payments intercepted using compromised or fraudulent bank account details.

As fraud opportunities expand, so does the cost–and it extends beyond financial losses.

The real cost of healthcare fraud

The most visible cost of healthcare fraud is financial: fraudulent reimbursements, payment returns, eligibility errors, and the expense of investigating suspicious activity. For large healthcare organizations, even relatively small fraud losses can add up quickly across thousands of transactions.

But the impact extends further. Fraud can also trigger regulatory scrutiny, audits, penalties, and liability under laws such as the False Claims Act. To combat this, organizations often rely on manual verification processes, provider credentialing reviews, and claims investigations that consume resources that could be directed at patient care. 

Patients and members feel the impact as well. Fraud contributes to higher healthcare costs, increased premiums, and delays in benefits or reimbursements. So while the billions recovered by the Department of Justice may capture headlines, the true cost of healthcare fraud runs far deeper.

How to prevent healthcare fraud  

Preventing healthcare fraud starts with identifying risk early in the care lifecycle, but it doesn’t end there. The most effective approach creates a layered strategy that covers the entire system. 

Identity verification at enrollment

The strongest control point is at the start of the lifecycle. Verifying member and provider identities in real time helps prevent synthetic identities, fraudulent enrollments, and impersonation from ever entering the system.

Account verification for payments and disbursements

Failing to verify bank account details on a new account application leaves the door open for payment fraud. Bank-linked identity data provides signals that are difficult to fake. Verifying account ownership before collecting premiums or issuing reimbursements helps reduce ACH fraud, payment interception, and misdirected funds. It also improves reliability by reducing failed payments and returns.

Income and eligibility verification

Eligibility fraud is especially common in Medicaid and ACA programs, where manual reviews or paystub-based verification may rely on incomplete or outdated data. Real-time income verification using bank data helps confirm eligibility more completely and currently, including for gig workers and seasonal employees who may have irregular earning patterns. 

Network-based fraud detection

Fraudsters don’t just launch one attack at a time or quit after a failed attempt. Coordinated fraud rings and synthetic identity clusters often span multiple financial platforms and bank systems. Network-level data gathered from thousands of platforms helps surface patterns that would otherwise be impossible to spot. 

Dynamic risk scoring and step-up verification

Not every interaction carries the same risk. Dynamic risk scoring distinguishes low- from high-risk behavior, allowing seamless experiences for most users while triggering step-up verification when needed.

Effective healthcare fraud solutions need real-time data that integrates into existing healthcare workflows like EHR, RCM, and claims systems—without adding friction for patients, members, or providers. That’s where Plaid can help.

How Plaid helps healthcare organizations fight fraud

Healthcare fraud prevention works best when stronger controls are applied at the exact points where risk enters the system—enrollment, payments, and eligibility. Here is how Plaid strengthens fraud prevention across the healthcare lifecycle: 

• Network advantage: Plaid connects to 12,000+ financial institutions and analyzes data across more than 1 billion devices. This creates visibility into financial behavior patterns that individual payors, providers, or platforms cannot see on their own—making it easier to spot fraud earlier. 

• Strengthen enrollment integrity: At onboarding, Plaid verifies member and provider identities using bank-linked data in as little as 10 seconds. This helps prevent synthetic identities and fraudulent enrollments from entering the system. 

• Secure payments and disbursements: Plaid verifies bank account ownership in real time, helping you to ensure funds are delivered correctly the first time. This reduces exposure to payment diversion and ACH fraud while improving reliability. Pay-by-bank also reduces processing costs by an average of 40% compared to card payments.

Plaid’s healthcare payments and fraud prevention solutions bring identity, account verification, and risk detection into a single, real-time system that integrates directly into existing healthcare workflows, including EHR and RCM platforms. 

Organizations leveraging Plaid have seen meaningful improvements in both fraud reduction and operational efficiency without adding friction for legitimate users.

→ Learn how Health Equity used Plaid to reduce fraud-related service costs by 70% quarter over quarter.

Build a fraud defense that works across the care ecosystem

Healthcare fraud prevention can no longer rely solely on reviewing suspicious claims after payments have already been made. Instead, leading organizations are shifting from reactive detection to proactive prevention that keeps fraudsters from entering the healthcare system and makes it easier to spot system-wide fraud signals. 

The most effective fraud defenses go even further–they limit fraud risk without adding friction for the people who depend on it: patients waiting for reimbursements, members enrolling in coverage, and providers delivering care. 

Learn how Plaid helps healthcare organizations strengthen fraud prevention across enrollment, payments, and disbursements.