AI Solutions for Healthcare

Here’s what to expect for AI, FWA, payment integrity, cloud data security, and more over the next 12 months

In 2021, Americans spent $4.3 trillion on healthcare, or $12,914 per person. Breaking this down, that’s $1,076 spent every month by American citizens and healthcare organizations. According to experts, approximately 3-10% – anywhere from $129 billion to $430 billion – of this total healthcare spend is attributed to fraud, waste, and abuse (FWA).

Despite the perfect storm of factors precipitated by reduced telehealth regulations during the COVID-19 pandemic and the increasing digitization of healthcare records and systems, not to mention more opportunistic fraudsters, there are promising signs of change in how healthcare, security and legal experts are waging the battle against FWA. In July 2022, the U.S. Justice Department announced criminal charges against dozens of defendants allegedly responsible for $1.2 billion in healthcare fraud, another proof point that bad actors are likely to be caught (and prosecuted) given growing adoption of new tools and tech.

This is good news. In recent years, the industry has been making measurable progress by sharply focusing on root causes of FWA and applying new technologies for detection. Since 2017, the total number of U.S. healthcare fraud cases are down 28.7%.

Just as encouraging, healthcare organizations are moving more aggressively to improve payment operations and provider collaboration by adopting cloud-based payment integrity solutions that deliver new levels of accuracy, transparency and ROI. Digital transformation leveraging new tech such as artificial intelligence (AI) and machine learning (ML) are enabling faster, more powerful ways to detect FWA and automate claims and payment processes, driving greater efficiency, reduced provider abrasion, and enhanced health plan member experience.

This second annual trends roundup highlights key themes and emerging trends over the past 12 months that will continue to shift the lines in the battle against FWA and affect better payment integrity in the years ahead. These insights crystalize how Codoxo experts perceive the current market and aim to serve as a north star to healthcare executives and leaders by informing their strategic imperatives in 2023 and beyond.

Five Trends & Predictions for Healthcare Cost Containment in 2023

1. The Consumerization of Healthcare Leads to Payment Reforms

Recent survey data shows that 89% of Americans used some form of digital payment in 2021, continuing the quantum leap towards digitization that began with the global pandemic in 2020. One expert even suggests that 110 million Americans switched to digital-first payments during the COVID-19 crisis. These impacts are being felt throughout the healthcare industry as more patients expect quicker, more seamless payment options – especially in response to outdated billing methods and siloed data systems. As emerging technologies like telehealth, cloud, and health-telematics grow in adoption, healthcare systems must continue to find ways to balance the growing demands for payment integrity with increased healthcare services, higher volume of claims data, faster integration with third-party systems, and more vigilant cybersecurity.

But the quest for easy, affordable, high quality healthcare can never be reduced to quick fixes and facile remedies. Rena Bielinski, Codoxo’s Vice President of Customer Success, reminds us that while we’ve made significant progress, overhauling the system is an ongoing challenge: “Despite this nation’s great healthcare, the costs have risen sharply while the quality has not really changed. People are living longer, but at what cost?”

The trends toward increasing healthcare consumerization also highlights the need to address FWA and reinforce payment integrity much earlier in the billing cycle. Rajesh Razdan, Vice President of Products for Codoxo, sees this as part of a broader focus on provider education. “Pre-submission is about how to make sure you have an effective strategy for providers to not submit suspect claims in the first place,” he says. “How do we educate the providers about their policies, what the historical record has been, and how to detect patterns based on what the SIUs and peer groups are seeing in the billing data?” This focus on provider education can go a long way towards preempting erroneous charges before the damage is done.

As healthcare consumerization continues to ramp up, organizations will face increasing pressure to provide easier, faster, and better experiences. Patients are expressing frustration and impatience with outdated systems because they are now expecting the same retail-like customer experience they get from Amazon or Apple. According to Musheer Ahmed, CEO and Founder at Codoxo, “Healthcare billing is probably one of the most archaic payment systems in existence today. However, like all things in healthcare, change takes time but there is certainly pressure in the industry to make things simpler for patients.”

Expect these healthcare consumerization trends to intensify. For example, Amazon announced in July 2022 its acquisition for $3.9 billion of One Medical, a membership-based primary care practice, as a play to disrupt the way U.S. healthcare is delivered. And CVS Health’s planned purchase of home healthcare company Signify Health for $8 billion is part of the retail healthcare giant’s larger plan to transform how medical services are delivered. Imagine if ordering and paying for a home doctor visit was as seamless as opening an app. As Rena Bielinski points out, “The disruptions in healthcare by big tech companies like Apple and Amazon are pretty significant and will no doubt continue to have an impact in this space.”

2. Healthcare Price Volatility Continues – But Relief Is on the Horizon

Few would disagree that healthcare costs are out of control. U.S. healthcare spending is expected to reach 19.7% of GDP by 2028, and average employer healthcare related costs will increase by 6.5% in 2023 to more than $13,800 per employee. But this trend is not only a domestic phenomenon. As one report summarizes, “Rampant inflation and increased healthcare utilization coming out of the pandemic are contributing to the highest projected increase in global medical costs in nearly 15 years.”

Many healthcare organizations feel the pinch in their bottom line and are struggling to keep their doors open. As Mark Riendeau, Senior Vice President of Sales at Codoxo, reflects, “We’ve seen a real impact of price volatility on newer healthcare plans, where there’s a high degree of membership attrition especially, and it is really hitting their bottom line hard. Providers are increasingly under pressure to not only fight fraud but keep costs under control and provide the best care for their patients and members.”

For Razdan, Codoxo’s VP of Products, the issue of price volatility must be addressed in terms of a broader “shift-left” approach to healthcare cost containment, implying the need to work with providers on improving their coding and billing practices and intervene much earlier in the healthcare payment lifecycle to identify bad actors and erroneous claims. “With a shift left approach, we focus on provider education and detecting issues from the onset of a potentially false claim, rather than the old ‘pay and chase’ approach of trying to recover money that was misapplied to a false claim,” says Razdan.

But even as pockets within the healthcare industry begin to shift-left and adopt AI solutions like Codoxo, Codoxo CEO Ahmed reminds us that moving even further left has tradeoffs, “Technology adoption requires more resources, which adds to organizational and health plan costs, which ultimately drives higher price volatility.” But Ahmed is optimistic about the long-term systemic changes that these new approaches and technologies will bring to the industry. And broader macroeconomic trends suggest that U.S. economic growth is expected to outpace health spending growth through 2024, and that the pace of healthcare spending will stabilize from 2025-2030.

3. Heavy AI Adoption Creates Big Wins in Healthcare Fraud Fight

As the national healthcare system bent under the weight of the COVID-19 pandemic, opportunistic bad actors used this crisis to devise clever schemes to extract money from the system through various forms of fraud, waste, and abuse. But fortunately, healthcare organizations have become keenly aware of the urgent need for AI and predictive analytics that can detect fraudulent schemes such as excessive upcoding, unbundling of services, and other COVID-19 bypasses. The results are already paying off with increasing reports of U.S. Department of Justice fraud takedowns and recoveries of exploited payments. In its Spring 2022 semi-annual report, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) was expected to recoup nearly $3 billion as a result of OIG audits and investigations.

Codoxo is an example of a newer market entrant applying innovative technology to reduce FWA and enhance payment integrity. Its Forensic AI Platform analyzes data, detects problems, and builds connections across all data points. However, many healthcare organizations encounter challenges such as legacy systems and siloed data when deciding to adopt AI. Codoxo’s solution was to create a unified all-in-one platform where forensic analysis happens and actionable insights are accessible across cost containment teams, aligning departments while revealing trends and outliers that are typically missed.

According to Prasoon Saurabh, Vice President of Engineering at Codoxo, “The concept of a common unified platform is of big interest to payers since it provides one single source of truth and eliminates silos – which is why our product is resonating in the market right now.”

Sales leader Riendeau also affirms Codoxo’s unique value proposition: “Our AI is built specifically for healthcare and designed to focus on fraud, waste, and abuse. As a result, we are better suited to reduce false positives and produce better results, faster.” Industry analysts are also drawing more attention to this distinct advantage. Aite-Novarica Group and CB Insights, among other research firms, are publishing roundup reports featuring leading AI vendors in the FWA and payment integrity space due to growing interest among healthcare payers, agencies and PBMs for guidance.

Given its clear and proven value, AI and augmented intelligence (AI + human intelligence) will be rapidly adopted in 2023 and beyond as a way to detect recurring trends and patterns in the healthcare system. In fact, the global healthcare fraud analytics market is expected to reach $6.33 billion in 2026 at a compound annual growth rate (CAGR) of 27.06%. And as digitization continues to advance across the industry, healthcare organizations will also roll out next-generation business models focused on innovation and integration across the value chain. A critical part of this paradigm shift will involve AI and deep learning systems specifically designed to address healthcare FWA and extend payment integrity across the billing lifecycle. We anticipate exciting changes over the next several years as more healthcare systems bring AI online.

4. The Biggest Changes in Healthcare Will Be Data-Driven

The consumerization and digitization of healthcare is making data a huge imperative across the industry for increased savings, streamlined payments, and accelerated ROI. The impacts extend everywhere from improved remote communications to back-office automation to using wearables for improved patient quality care. This heavy data infusion will also result in increasing interoperability between payment systems, digital health technologies, and infrastructures.

Despite big aspirations, the healthcare industry is beset by many challenges when it comes to big data; high volumes of legacy equipment and siloed systems, and traditionally slower rates of innovation, have made it difficult to transform healthcare information into actionable insights. As Musheer Ahmed readily points out, “One of the biggest challenges we face in healthcare is data integrity – incomplete or inaccurate data fields. The sources of healthcare data are also very disparate, produced not just by doctors but patients and consumers. So the very large opportunity for healthcare organizations is becoming adept at breaking down the data silos, increasing the accuracy of their information, and using it to run their business more efficiently.”

Prasoon Saurabh confirms the critical role that data and innovation play across the healthcare spectrum. “Big data is king, whether it’s from a cost containment standpoint, fraud standpoint, or patient health improvement standpoint. Data is always going to play a big role. Today we see this in the way that iPhone and Apple Watch, for instance, have become like personal IoT devices, which create enormous volumes of unstructured data that doctors can now use to improve the health of their patients.”

A related trend in this category – albeit emerging – are new technology applications, such as the metaverse and Web3, which could well signal a transformation of the entire healthcare payer/patient experience lifecycle sooner than imagined. Accenture discusses potential impacts in its 2022 Metaverse Continuum report, in which the metaverse is described as “a spectrum of digitally enhanced worlds, realities and business models poised to revolutionize life and enterprise in the next decade – [even as] the impact on healthcare begins today.”

5. Healthcare Cloud Adoption Requires Systemic Changes in Cybersecurity Standards

As healthcare continues to embrace digital transformation, organizations must adapt to a new set of standards around cybersecurity awareness, training, and data protection. For example, increasing interoperability between organizational data, consumer wearables, and IoT devices will require a higher level of security vigilance. Sadly, despite new forms of healthcare digitization, bad actors have become more opportunistic than ever and have found ways to exploit the system due to factors like understaffed IT departments, legacy equipment, and lack of security training. One survey, in fact, found that 61% of healthcare executives expressed little to no confidence in their organizational capability to mitigate ransomware risks.

“Healthcare data is more valuable than financial data because unlike credit cards, where you can cancel an unauthorized transaction, healthcare data has no central authority,” states Ahmed. “This also explains why healthcare has become the most targeted industry for several years in a row. Because of more frequent ransomware attacks and breaches, the industry is starting to prioritize cybersecurity measures.”

Promising signs towards the emergence of a more uniform set of standards for healthcare cloud and cybersecurity have emerged in recent years through the HITRUST CSF standard. Since its inception in 2007, this set of compliance benchmarks has steadily become the gold standard for securing the future of healthcare in everything from infrastructure and protected health information (PHI) to wearables and medical devices.

Codoxo engineering leader Suarabh sees the path to healthcare cloud migration and cybersecurity standards as part of a larger journey which, like any good and worthwhile initiative, will take time. “A year ago, I saw that customers were very skeptical about migrating to the cloud and concerned how vendors would handle electronic records and PHI. But now, the conversation has shifted, and customers are very comfortable with cloud migration and will even ask if we follow the National Institute of Standards and Technology (NIST) 800 standard,” notes Saurabh. However, as Bielinski points out, onboarding healthcare organizations to the cloud takes time, especially for bigger players. “The appetite is definitely in favor of cloud migration, but the challenges are how to wrangle the newer technologies. Then there’s the talent gap, not to mention a general lack of trained individuals who understand cloud cybersecurity.”

Increasing education along with new interoperability standards, multi-factor authentication, and mobile device security are all critical measures to ensure that healthcare organizations stay vigilant and informed about the latest cybersecurity best practices.

Key Takeaway: A Promising Year for Improved Payment Processes and Reduced FWA

This broad look at the latest healthcare organizational trends, including consumerization and payment reforms, AI fraud detection and cost containment, the role of big data, and healthcare cloud and cybersecurity, serves a dual purpose. By detailing how and why fraud continues to negatively affect healthcare organizations and Americans alike by distracting from real patient care and raising the cost of health premiums, we also can take stock of market forces and innovative solutions that are helping organizations to offset spiraling healthcare costs due to FWA and deliver better consumer experiences in a rapidly evolving healthcare landscape.

Bernard Marr, a data futurist and Forbes contributing author, offers a fitting summary of where the industry is at and where it’s heading: “The healthcare organizations that will be the most successful are the ones that will be able to fundamentally rethink and reimagine their workflows and processes and use machine learning and AI to create a truly intelligent health system.”

Interested to learn how Codoxo is a part of, and impacting these trends seen across the industry? Contact us at to learn more.

Codoxo Experts

The following Codoxo executives contributed to this trends report:

Dr. Musheer Ahmed is the CEO and Founder at Codoxo. Codoxo’s patented AI technology was developed as a part of his PhD dissertation at Georgia Institute of Technology. The JASON advisory group, a prestigious scientific advisory panel to the US government, reinforced that Musheer’s doctoral research tackled some of the biggest challenges within the emerging health data infrastructure in the United States.

Rena Bielinski is Vice President of Customer Success at Codoxo. Responsible for customer onboarding, satisfaction and success, Rena brings extensive experience that enables her to position customers for strategic growth in their fraud, waste, and abuse endeavors. She has a Doctor of Pharmacy degree from the University of Illinois College of Pharmacy in Chicago (UIC) and she is an Accredited Healthcare Fraud Investigator (AHFI).

Rajesh Razdan is Vice President of Products for Codoxo. Rajesh collaborates with Codoxo’s data science team, executive leadership, and industry partners to find and create new ways to solve pressing cost containment challenges facing healthcare payer and agency customers. He holds a Bachelor’s in Computer Science and Engineering from the University of Mysore, India.

Prasoon Saurabh is Vice President of Engineering at Codoxo.  Prasoon oversees development efforts for Codoxo’s Forensic AI Platform, which uses a patented algorithm to identify problems and suspicious behavior earlier than traditional techniques. He holds a BS in Computer Engineering from Amravati University and holds multiple patents.

Mark Riendeau is Vice President of Sales at Codoxo. Mark’s focus at Codoxo is building a high-velocity enterprise sales team that drives growth and market share by aligning Codoxo’s innovative offerings with customer needs in an evolving healthcare market. He holds a business degree from Bentley University in Waltham, Mass.