What Baseball Just Taught Us About Fixing Fraud in Healthcare

Starting this season, Major League Baseball implemented a subtle but powerful change: the Automated Ball-Strike (ABS) Challenge System, allowing players to immediately challenge a ball or strike call. A player taps their helmet, the system reviews the pitch, and within seconds the call is corrected or upheld. It’s fast, bounded, and forces precision into the game without slowing it down.

Now imagine bringing a similar concept to Medicare.

Today, fraud, waste, and abuse in healthcare represents an estimated 3%-15% of spend or ~$60B a year.¹ It often slips through because the system lacks real-time accountability. Claims are paid quickly, audited later, and clawbacks, if they happen, come slowly and inconsistently. Meanwhile, organizations such as ACOs, who are responsible for 53% of the Traditional Medicare population, have no direct mechanism to intervene in the moment.

What if they did?

Introducing the “ACO Challenge”

As in baseball, ACOs would have a limited number of challenges: say, three per year. When an ACO identifies a provider with a set of high volume claims towards one code that appears fraudulent or highly suspect, it can “challenge” that set of claims realtime.

Here’s how it could work:

• The set of claims (or an equivalent dollar amount of future claims) is immediately pended for expedited review.
• A rapid adjudication process is triggered.
• If fraud is confirmed → the claims are denied, and the ACO retains its challenge.
• If the claims are valid → the claims hold is lifted, the provider is paid, and the ACO loses one of its challenges.

Let ACOs Help CMS

ACOs already have the ability to challenge financial reconciliation results at year end. However, this approach will introduce targeted, high-signal intervention from the actors who are closest to the patient and the data, and who have a financial incentive to achieve real-time, accurate calls.

ACOs already see patterns that CMS and others may not:

• Sudden spikes in utilization from specific providers
• Billing that doesn’t align with clinical reality
• Repeated high-cost interventions with low evidence of necessity

Yet today, they can do little more than document and hope the system catches up.

A challenge system would flip that dynamic - creating a real-time check on bad actors, while preserving speed for the vast majority of legitimate claims and creating a real deterrent for those who have lived off of bilking Medicare for far too long. 

Why this works:

• Scarcity drives discipline (only a few challenges per year)
• Skin in the game (ACOs lose challenges if wrong)
• Speed matters (expedited review prevents payment leakage)
• Signal over noise (only the most egregious cases get flagged)

And importantly, it aligns incentives: ACOs bearing financial risk become active partners in fraud detection, not passive observers.

Some real world examples we would have challenged:

• 83 claims for skin membrane grafts in 36 days (averaging more than 2 applications per day) delivered by a pediatrician for one single Medicare patient, totaling $6.4M in direct violation of established clinical guidelines, standard of care best practices, and Medicare Local Coverage Determinations. 
• 110 claims of urinary catheter supplies to separate patients from a single DME supplier. All 110 claims were missing required diagnosis code documentation, raising questions of medical necessity (and if they even received it). 

Baseball didn’t overhaul its entire system to improve accuracy; it added a simple, high-leverage tool at the point of decision.

Healthcare doesn’t need more bureaucracy to fight fraud. It needs more real-time accountability.