Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology
ABSTRACT In developed countries, around 90% of the population is covered by health insurance through public or private providers. However, fraudulent activities account for an estimated 3%–10% of total healthcare expenditures, resulting in financial losses exceeding $300 billion annually. These frau...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2025-08-01
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| Series: | Engineering Reports |
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| Online Access: | https://doi.org/10.1002/eng2.70315 |
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| author | Md. Mazharul Islam Mubasshir Ahmed Rajesh Palit Mohammad Shahriar Rahman Salekul Islam |
| author_facet | Md. Mazharul Islam Mubasshir Ahmed Rajesh Palit Mohammad Shahriar Rahman Salekul Islam |
| author_sort | Md. Mazharul Islam |
| collection | DOAJ |
| description | ABSTRACT In developed countries, around 90% of the population is covered by health insurance through public or private providers. However, fraudulent activities account for an estimated 3%–10% of total healthcare expenditures, resulting in financial losses exceeding $300 billion annually. These fraudulent practices erode trust among patients, healthcare providers, and insurers, further complicating the insurance claim process. Additionally, claim rejection rates due to fraudulent activities are estimated to range between 25% and 35%, which impacts its efficiency and trustworthiness and weakens the industry's reliability. The digitization of healthcare and the health insurance industry has amplified the need for robust and trustworthy systems that ensure data security and optimize the insurance claim process. To address these issues, this paper proposes a system that ensures patient anonymity through secure credentials and advanced fraud detection mechanisms. Privacy is preserved using cryptographic techniques such as secure hashing and anonymous credentials, which ensure that sensitive patient information remains confidential throughout the claim process. Smart contract algorithms are utilized in two scenarios: patient‐submitted claims and healthcare provider‐submitted claims, ensuring accurate processing and validation while detecting fraudulent activities such as duplicate claims, inflated medical bills, billing for unprovided services, falsifying patient records, and submitting claims for nonexistent treatments. The proposed system has been implemented and tested on a blockchain platform, demonstrating its effectiveness in preserving privacy and detecting fraud. Performance evaluations reveal its scalability and efficiency in managing increased user loads, offering a robust solution to modern health insurance challenges while fostering trust and operational efficiency among participants. |
| format | Article |
| id | doaj-art-9ca4524f971440559b3dae181763fe61 |
| institution | Kabale University |
| issn | 2577-8196 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Wiley |
| record_format | Article |
| series | Engineering Reports |
| spelling | doaj-art-9ca4524f971440559b3dae181763fe612025-08-20T03:48:22ZengWileyEngineering Reports2577-81962025-08-0178n/an/a10.1002/eng2.70315Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain TechnologyMd. Mazharul Islam0Mubasshir Ahmed1Rajesh Palit2Mohammad Shahriar Rahman3Salekul Islam4Department of Electrical and Computer Engineering North South University Dhaka BangladeshDepartment of Electrical and Computer Engineering North South University Dhaka BangladeshDepartment of Electrical and Computer Engineering North South University Dhaka BangladeshDepartment of Computer Science and Engineering United International University Dhaka BangladeshDepartment of Electrical and Computer Engineering North South University Dhaka BangladeshABSTRACT In developed countries, around 90% of the population is covered by health insurance through public or private providers. However, fraudulent activities account for an estimated 3%–10% of total healthcare expenditures, resulting in financial losses exceeding $300 billion annually. These fraudulent practices erode trust among patients, healthcare providers, and insurers, further complicating the insurance claim process. Additionally, claim rejection rates due to fraudulent activities are estimated to range between 25% and 35%, which impacts its efficiency and trustworthiness and weakens the industry's reliability. The digitization of healthcare and the health insurance industry has amplified the need for robust and trustworthy systems that ensure data security and optimize the insurance claim process. To address these issues, this paper proposes a system that ensures patient anonymity through secure credentials and advanced fraud detection mechanisms. Privacy is preserved using cryptographic techniques such as secure hashing and anonymous credentials, which ensure that sensitive patient information remains confidential throughout the claim process. Smart contract algorithms are utilized in two scenarios: patient‐submitted claims and healthcare provider‐submitted claims, ensuring accurate processing and validation while detecting fraudulent activities such as duplicate claims, inflated medical bills, billing for unprovided services, falsifying patient records, and submitting claims for nonexistent treatments. The proposed system has been implemented and tested on a blockchain platform, demonstrating its effectiveness in preserving privacy and detecting fraud. Performance evaluations reveal its scalability and efficiency in managing increased user loads, offering a robust solution to modern health insurance challenges while fostering trust and operational efficiency among participants.https://doi.org/10.1002/eng2.70315anonymityblockchainfraud detectionhealth insurance claimprivacy preservationsmart contracts |
| spellingShingle | Md. Mazharul Islam Mubasshir Ahmed Rajesh Palit Mohammad Shahriar Rahman Salekul Islam Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology Engineering Reports anonymity blockchain fraud detection health insurance claim privacy preservation smart contracts |
| title | Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology |
| title_full | Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology |
| title_fullStr | Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology |
| title_full_unstemmed | Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology |
| title_short | Fraud Detection in Privacy Preserving Health Insurance System Using Blockchain Technology |
| title_sort | fraud detection in privacy preserving health insurance system using blockchain technology |
| topic | anonymity blockchain fraud detection health insurance claim privacy preservation smart contracts |
| url | https://doi.org/10.1002/eng2.70315 |
| work_keys_str_mv | AT mdmazharulislam frauddetectioninprivacypreservinghealthinsurancesystemusingblockchaintechnology AT mubasshirahmed frauddetectioninprivacypreservinghealthinsurancesystemusingblockchaintechnology AT rajeshpalit frauddetectioninprivacypreservinghealthinsurancesystemusingblockchaintechnology AT mohammadshahriarrahman frauddetectioninprivacypreservinghealthinsurancesystemusingblockchaintechnology AT salekulislam frauddetectioninprivacypreservinghealthinsurancesystemusingblockchaintechnology |