Consider a common scenario: a check issued to a member in Denver never arrives, only to be cashed days later in Orlando for an entirely different amount. What looks like simple mail theft is often something far more coordinated. Fraudsters intercept the check, extract sensitive information, alter the amount and deposit it elsewhere. The vulnerability isn’t the payment method itself— it’s the infrastructure that allows fraud to succeed.
Incidents like this are not isolated. They are symptoms of a deeper structural issue. When payment systems operate in silos, fraud doesn’t need to break through defenses because it simply moves around them. Controls designed to validate payments confirm whether a check is legitimate but don’t validate identity or behavior across disconnected systems. Early warning signals go unconnected, and by the time they tell a complete story, the funds are already gone.
When legacy payment systems fall short, fraud scales
Most healthcare payment environments were built for an era defined by slower transactions and more predictable threats. Today, fraud is faster, more coordinated and increasingly focused on identity rather than documents alone. The challenge isn’t just outdated technology; it’s the siloed infrastructure that was never designed to share signals across the payment lifecycle.
Payment workflows often span multiple systems across onboarding, payment issuance and reconciliation. Each system may perform its function well, but without shared visibility, the warning signs fail to converge. The consequence is measurable: checks are targeted at 31 times the rate of real-time payment rails, and nearly half of financial institutions report that fraud complexity is increasing due to coordinated, identity-based attacks that adapt quickly to new controls.
Prevention requires more than faster detection. Organizations need payment programs with end-to-end visibility and controls that intervene before losses occur.
What would have stopped this?
If any one of these four protections had been in place, the situation for the member in Denver would have looked very different. A fraud-resilient payment program is not built on a single safeguard, but on protections that work together across the entire payment lifecycle.
1. Unified payment infrastructure with end-to-end visibility – In many organizations, fraud controls exist but are scattered across disconnected platforms. Address updates, payment reroutes, entity validation and payment execution often occur in separate environments, making it difficult to identify patterns that span multiple touch-points.
A unified payment infrastructure brings these processes together into a single, governed environment. When onboarding, validation, execution and communication are connected, organizations gain a complete view of each transaction and anomalies can surface before payments are finalized.
2. Continuous identity and account verification – Modern fraud increasingly targets identity. Confirming that a payment method is real doesn’t verify that the person or organization receiving it is who they claim to be. Strong onboarding practices, such as verifying identity against authoritative databases and confirming bank account ownership, reduce initial exposure. But risk can evolve over time as credentials are compromised or account details change.
Continuous verification helps organizations stay ahead of that change by monitoring shifts in credentials, banking details or access behavior so threats surface before they escalate. Adaptive authentication informed by behavior rather than fixed rules ensures payments continue going to the right entity long after enrollment.
3. Real-time monitoring and early-signal detection– Even well-designed systems need ongoing vigilance. Fraud schemes can shift tactics midstream, making after-the-fact alerts insufficient.
Real-time monitoring surfaces anomalies such as sudden payment reroutes, geographic inconsistencies or duplicate entity activity as they develop, not after the fact. When combined with behavioral risk scoring and automated transaction monitoring, these warnings allow teams to intervene before funds are released.
4. Secure digital payment options – Paper checks remain one of the most exploited payment methods, particularly in healthcare. In fact, 58% of organizations reported checks as the most frequently targeted payment method for fraud in 2025. Yet 87% of organizations still use checks, and nearly three-quarters have no plans to stop. Physical transit creates opportunities for interception, sensitive account information is visible in plain view and manual handling introduces risk at every step. Digital payment environments are more controlled and traceable, meaning authentication applies consistently, static account data is protected and every transaction leaves a clear audit trail. While digital rails are not without risk, they are defensible in ways paper isn’t.
Why this is urgent for healthcare
Each of these capabilities matters in any industry, but in healthcare, the stakes are compounded. Payment accuracy directly affects provider relationships, operational stability and the member experience. Delayed or misdirected payments disrupt workflows, strain provider networks and create unnecessary administrative burden. A $449 million cost-savings opportunity also exists in healthcare simply from eliminating paper-based payments, meaning inaction carries both a security cost and a financial one.
The question is no longer whether fraud will occur. It’s whether healthcare payment programs are designed to withstand it — and whether the organizations running them can afford to wait any longer and find out.
Photo: Viorika, Getty Images
Tom Davis has more than 20 years of experience in the healthcare sector where he has held a variety of positions in sales and marketing. Tom has led teams in product development and e-commerce initiatives and performing senior management roles in Fortune 500 companies that include General Electric, Genworth Financial, and Sun Life Financial.
Since 2008, Tom has participated in two successful start-ups and helped ECHO to become an industry leader in electronic healthcare benefit payment solutions.
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