Pharma Focus Asia

Combating the FWA Menace

Cutting-Edge strategies for PBMs

Ravi Iyer, Senior Director - IT, Elevance Health

Narasimha Nalamalapu, Solutions Architect, Tetrasoft Inc

In the realm of Pharmacy Benefit Management (PBM), the battle against Fraud, Waste, and Abuse (FWA) and Medicare noncompliance demands innovative strategies. This article delves into cutting-edge techniques for PBMs to combat FWA, emphasizing the pivotal role of data analytics and AI. From electronic prescription systems and vigilant pharmacy network vetting to robust pre-payment reviews and proactive fraud alerts programs, this article outlines comprehensive solutions. By leveraging technology and proactive measures, PBMs can fortify their defenses, ensuring financial integrity and safeguarding patient welfare in an increasingly complex healthcare landscape.


In the complex landscape of Pharmacy Benefit Management (PBM), combatting Fraud, Waste, and Abuse (FWA) has emerged as a critical challenge. This article explores innovative, real-time techniques for PBMs to navigate the intricacies of FWA and Medicare noncompliance. As the healthcare industry faces staggering losses, estimated at billions annually due to FWA, the need for proactive measures has never been more urgent.

Understanding the FWA Menace:

FWA infiltrates the healthcare system, causing substantial financial losses and jeopardizing patient welfare. The scope of FWA is vast, ranging from forged prescriptions to identity fraud and billing for non-existent medications. Medicare Part D, a significant component of the Medicare program, has been particularly susceptible, with fraud costs exceeding $121 billion. The need for vigilance against FWA is paramount, given the 7.29% of total global healthcare spending it accounts for, according to the World Health Organization.

Key Solutions:

1. Electronic Prescription Systems: Implementing e-prescribing systems enhances safety, efficacy, and quality, curbing fraud at the point of sale.

2. Vetting Pharmacy Networks: PBMs must verify pharmacy legitimacy and scrutinize providers' histories to identify potential fraud, shifting from a reactive 'pay and chase' model to a preventive approach.

3. Addressing Pharmaceutical Waste: PBMs can reduce waste by implementing drug therapy management plans and trial periods for maintenance drugs.

4. Managing Abuse: Balancing patient access and abuse prevention is crucial. Programs collecting drug distribution data and early refill alerts empower pharmacists and prescribers.

Leveraging Data Analytics and AI:

Data analytics serve as a powerful ally in the fight against FWA. PBMs can employ advanced analytics to verify provider credentials, obtain risk scores, and detect FWA indicators before claims are processed. Integrating AI-powered solutions bolsters fraud detection models, replacing traditional strategies and ensuring accuracy in investigations.

Preventing and Detecting Fraud:

a. Pre-Payment Review: Shifting to a pre-payment review model enhances claim accuracy and reduces administrative burdens. Automation, coupled with specific billing policies, ensures thorough claim reviews in near real-time.

b. Pharmacy Audits: PBMs conduct onsite and desktop audits, investigating claims submitted by pharmacies. Notably, OptumRx recovered $300 million in FWA spend in 2020, highlighting the effectiveness of such audits in detecting discrepancies.

c. Fraud Alerts Program: Collaborative efforts between PBMs and plan sponsors, aided by data analytics, create a robust fraud alerts program. Customized corrective actions and meticulous investigations address FWA issues comprehensively.

d. Pharmacy, Patient, and Prescriber Investigations: Vigilant investigations, akin to audits, delve deep into pharmacy practices. PBMs must adopt assertive approaches, ensuring pharmacies adhere to stringent response timelines and transparent processes.


In the battle against FWA, data, technology, and proactive strategies form the linchpin of success. PBMs equipped with cutting-edge tools, backed by robust data analytics and AI, can mitigate risks, safeguard finances, and, most importantly, ensure the well-being of beneficiaries. Embracing innovative technology and fostering collaborations can fortify the PBM industry against the ever-evolving schemes of fraud, waste, and abuse. As the industry marches forward, these strategies pave the way for a more secure, transparent, and efficient healthcare ecosystem.\


Ravi Iyer

Ravi Iyer is a visionary and innovative executive with diverse experience in leading and managing product delivery, client implementation, customer service, and operations with direct responsibility for multimillion-dollar budgets. He has extensive experience delivering across multiple disciplines, including Data Management, Data Governance, Cloud Architecture, Advanced Analytics, Master Data Management, Digital Products, and Digital Transformation. Excellent communicator who works collaboratively to deliver technology strategies and value added solutions that meet the needs of all business functions. Ravi is currently the technology executive and Senior Director at Elevance Health Inc.

Narasimha Nalamalapu

Narasimha is result driven leader with vast experience in executing various PBM, Health care, Financial, and securities trading applications. Technical expertise in Big data, Cloud, Analytics, Mainframe, BPM, testing, and Data warehouse projects at esteemed organizations like Anthem, Tetrasoft, DST, HCL, Deutsche bank, and Atos Origin. He currently works as Solution Architect at Tetrasoft Inc. Narasimha has vast experience in Pre-sales, Project management, effective customer communication, Architect, Technical Lead, On-site coordinator, and business Analyst roles for various complex assignments across the globe.

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