Blockchain‐Driven Solutions for Healthcare Insurance Fraud Detection and Prevention

ABSTRACT Healthcare insurance fraud is a growing global issue that undermines the integrity of healthcare systems and imposes significant financial losses on governments, insurers, and consumers. Fraudulent activities, including false claims, overbilling, and identity theft, inflate healthcare costs and reduce the efficiency of insurance systems. Traditional fraud detection systems rely on centralized databases and intermediaries, which are prone to inefficiencies, security vulnerabilities, and manipulation. In response to these challenges, this article proposed a decentralized blockchain‐based solution to detect and prevent healthcare insurance fraud more effectively. In healthcare insurance, blockchain can create a trusted, real‐time system for recording insurance claims and transactions. By securely sharing data between healthcare providers, insurance companies, and regulatory bodies, blockchain enables greater transparency and auditability. Smart contracts, self‐executing contracts coded on the blockchain, can automate claim processes, reducing the potential for fraudulent claims by ensuring that all predefined conditions are met before payments are processed. Furthermore, blockchain can track every healthcare and insurance process step, from patient records and treatments to billing and reimbursement, allowing for real‐time detection of irregularities. The proposed decentralized blockchain approach offers a secure and efficient solution for detecting and preventing healthcare insurance fraud. It minimizes reliance on centralized authorities, reduces operational costs, and builds a more transparent and trustworthy system (For 10 patients, the total execution time includes 0.007 ms for hashing, 0.065 ms for encryption, and 0.060 ms for decryption). The proposed system's smart contracts obtained results (Ether cost) show that submitting a claim costs 0.01677963 ETH, flagging a claim costs 0.002234 ETH, approving a claim costs 0.00385737 ETH, and the fraud detection constructor incurs the highest cost of 0.11428872 ETH. By leveraging blockchain's strengths, the healthcare industry can proactively combat fraud, protect sensitive data, and improve overall efficiency.