Today, health care fraud is all over the news. There undoubtedly is fraud in health care. The same is true for every business or endeavor touched by human hands, e.g., banking, credit, insurance, politics, etc. There is no question that health care providers who abuse their position and our trust to steal are a problem. So are those from other professions who do the same. Today, health care fraud is all over the news. There undoubtedly is fraud in health care. The same is true for every business or endeavor touched by human hands, e.g., banking, credit, insurance, politics, etc. There is no question that health care providers who abuse their position and our trust to steal are a problem. So are those from other professions who do the same.
Why does health care fraud appear to get the ‘lion’s share of attention? Could it be that it is the perfect vehicle to drive agendas for divergent groups where taxpayers, health care consumers, and health care providers are dupes in a health care fraud shell-game operated with ‘sleight-of-hand’ precision? Please take a closer look, and one finds this is no game-of-chance. Taxpayers, consumers, and providers always lose because the problem with health care fraud is not just the fraud. Still, it is that our government and insurers use the fraud problem to further agendas. At the same time fail to be accountable and take responsibility for a fraud problem they facilitate and allow to flourish.
1. Astronomical Cost Estimates
What better way to report on fraud than to tout fraud cost estimates, e.g., “Fraud perpetrated against both public and private health plans costs between $72 and $220 billion annually, increasing the cost of medical care and health insurance and undermining public trust in our health care system… It is no longer a secret that fraud represents one of the fastest-growing and most costly forms of crime in America today… We pay these costs as taxpayers and through higher health insurance premiums… We must be proactive in combating health care fraud and abuse… We must also ensure that law enforcement has the tools that it needs to deter, detect, and punish health care fraud.” [Senator Ted Kaufman (D-DE), 10/28/09 press release] – The General Accounting Office (GAO) estimates that fraud in healthcare ranges from $60 billion to $600 billion per year – or anywhere between 3% and 10% of the $2 trillion health care budget. [Health Care Finance News reports, 10/2/09] The GAO is the investigative arm of Congress.
READ MORE :
- All About Affordable Health Insurance Plans
- The Rapidly Changing Landscape of Mobile HTML5
- Computer Viruses and How to Deal With Them
- Occupational Health
- A Prescription For the Healthcare Crisis
– The National Health Care Anti-Fraud Association (NHCAA) reports over $54 billion is stolen every year in scams designed to stick our insurance companies and us with fraudulent and illegal medical charges. [NHCAA, website] NHCAA was created and is funded by health insurance companies. Unfortunately, the reliability of the purported estimates is dubious at best. Insurers, state and federal agencies, and others may gather fraud data related to their own missions, where the kind, quality, and volume of data compiled varies widely. David Hyman, professor of Law, University of Maryland, tells us that the widely-disseminated estimates of the incidence of health care fraud and abuse (assumed to be 10% of total spending) lacks any empirical foundation at all, the little we do know about health care fraud and abuse is dwarfed by what we don’t know and what we know that is not so. [The Cato Journal, 3/22/02]
2. Health Care Standards
The laws & rules governing health care – vary from state to state and from a payor to payor – are extensive and confusing for providers and others to understand as they are written in legalese and not plain speak.
Providers use specific codes to report conditions treated (ICD-9) and services rendered (CPT-4 and HCPCS). These codes are used when seeking compensation from payors for services rendered to patients. Although created universally to facilitate accurate reporting to reflect providers’ services, many insurers instruct providers to report codes based on what the insurer’s computer editing programs recognize – not on what the provider rendered. Further, practice building consultants instruct providers on what codes to report to get paid – in some cases, codes that do not accurately reflect the provider’s service. Consumers know what services they receive from their doctor or another provider. Still, they may not know what those billing codes or service descriptors mean in explaining benefits received from insurers. This lack of understanding may result in consumers moving on without understanding what the codes mean or may result in some believing they were improperly billed. The multitude of insurance plans available today, with varying levels of coverage, ad a wild card to the equation when services are denied for non-coverage – especially if it is Medicare that denotes non-covered services as not medically necessary.
3. Proactively addressing the health care fraud problem
The government and insurers do very little to proactively address the problem with tangible activities that detect inappropriate claims before they are paid. Indeed, payors of health care claims proclaim to operate a payment system based on trust that providers bill accurately for services rendered. They can not review every claim before payment is made because the reimbursement system would shut down. They claim to use sophisticated computer programs to look for errors and patterns in claims, have increased pre-and post-payment audits of selected providers to detect fraud, and have created consortiums and task forces consisting of law enforcers and insurance investigators to study the problem and share fraud information. However, for the most part, this activity deals with activity after the claim is paid and has little bearing on the proactive detection of fraud.
4. Exorcise health care fraud with the creation of new laws
The government’s reports on the fraud problem are published in earnest in conjunction with efforts to reform our health care system. Our experience shows us that it ultimately results in the government introducing and enacting new laws – presuming new laws will result in more fraud detected, investigated, and prosecuted – without establishing how new laws will accomplish this more effectively than existing laws not used to their full potential. With such efforts in 1996, we got the Health Insurance Portability and Accountability Act (HIPAA). Congress enacted it to address insurance portability and accountability for patient privacy and health care fraud and abuse. HIPAA purportedly was to equip federal law enforcers and prosecutors with the tools to attack fraud and resulted in the creation of several new health care fraud statutes, including Health Care Fraud, Theft or Embezzlement in Health Care, Obstructing Criminal Investigation of Health Care, and False Statements Relating to Health Care Fraud Matters.
In 2009, the Health Care Fraud Enforcement Act appeared on the scene. Congress has recently introduced this act with promises that it will build on fraud prevention efforts and strengthen the governments’ capacity to investigate and prosecute waste, fraud, and abuse in both government and private health insurance by sentencing increases; redefining health care fraud offense; improving whistleblower claims; creating common-sense mental state requirement for health care fraud offenses, and increasing funding in federal antifraud spending. Undoubtedly, law enforcers and prosecutors MUST have the tools to do their jobs effectively. However, these actions alone, without the inclusion of some tangible and significant before-the-claim-is-paid actions, will have little impact on reducing the occurrence of the problem.
What’s one person’s fraud (insurer alleging medically unnecessary services) is another person’s savior (provider administering tests to defend against potential lawsuits from legal sharks). Is tort reform a possibility for those pushing for health care reform? Unfortunately, it is not! However, supporting legislation placing new and onerous requirements on providers in the name of fighting fraud does not appear to be a problem. If Congress really wants to use its legislative powers to make a difference on the fraud problem, it must think outside the box of what has already been done in some form or fashion. Focus on some front-end activity that deals with addressing the fraud before it happens. The following are illustrative of steps that could be taken to stem-the-tide on fraud and abuse:
– DEMAND all payors and providers, suppliers, and others only use approved coding systems, where the codes are clearly defined for ALL to know and understand what the specific code means. Prohibit any one from deviating from the defined meaning when reporting services rendered (providers, suppliers) and adjudicating claims for payment (payors and others). Make violations a strict liability issue. – REQUIRE that all submitted claims to public and private insurers be signed or annotated in some fashion by the patient (or appropriate representative) affirming they received the reported and billed services. If such affirmation is not present, the claim isn’t paid. If the claim is later determined to be problematic, investigators have the ability to talk with both the provider and the patient… – REQUIRE that all claims-handlers (especially if they have authority to pay claims), consultants retained by insurers to assist on adjudicating claims, and fraud investigators be certified by a national accrediting company under the purview of the government to exhibit that they have the requisite understanding for recognizing health care fraud, and the knowledge to detect and investigate the fraud in health care claims. If such accreditation is not obtained, neither the employee nor the consultant would be permitted to touch a health care claim or investigate suspected health care fraud.
And, in those cases where fraud is established in paid claims, any monies collected from providers and suppliers for overpayments be deposited into a national account to fund various fraud and abuse education programs for consumers, insurers, law enforcers, prosecutors, legislators, and others; fund front-line investigators for state health care regulatory boards to investigate fraud in their respective jurisdictions; as well as funding other healthcare-related activity.- PROHIBIT public and private payors from asserting fraud on claims previously paid where it is established that the payor knew or should have known the claim was improper and should not have been paid. – PROHIBIT insurers from raising premiums of policyholders based on estimates of the occurrence of fraud. Require insurers to establish a factual basis for purported losses attributed to fraud coupled with showing tangible proof of their efforts to detect and investigate fraud, as well as not paying fraudulent claims.
5. Insurers are victims of health care fraud
As a regular course of business, Insurers offer fraud reports to present themselves as victims of fraud by deviant providers and suppliers. It is disingenuous for insurers to proclaim victim status when they can review claims before they are paid but choose not to because it would impact the flow of the under-staffed reimbursement system. Further, for years, insurers have operated within a culture where fraudulent claims were just a part of the cost of doing business. Then, because they were victims of the putative fraud, they pass these losses on to policyholders in the form of higher premiums (despite the duty and ability to review claims before they are paid). Do your premiums continue to rise? Insurers make a ton of money, and under the cloak of fraud-fighting, are now keeping more of it by alleging fraud in claims to avoid paying legitimate claims, as well as going after monies paid on claims for services performed many years prior from providers too petrified to fight-back. Additionally, many insurers believe a lack of responsiveness by law enforcers and file civil suits against providers and entities alleging fraud.
6. Increased investigations and prosecutions of health care fraud
Purportedly, the government (and insurers) have assigned more people to investigate fraud, conduct more investigations, and prosecute more fraud offenders. With the increase in the numbers of investigators, it is not uncommon for law enforcers assigned to work fraud cases to lack the knowledge and understanding for working these cases. It is also not uncommon for law enforcers from multiple agencies to expend their investigative efforts and numerous person-hours by working on the same fraud case. Law enforcers, especially at the federal level, may not actively investigate fraud cases unless they have the tacit approval of a prosecutor. Some law enforcers who do not want to work a case, no matter how good it may be, seek out a prosecutor for declination on cases presented in the most negative light. Health Care Regulatory Boards are often not seen as viable members of the investigative team. Boards regularly investigate complaints of inappropriate conduct by licensees under their purview. The major consistency of these boards is licensed providers, typically in active practice, that has the pulse of what is going on in their state.
At the insistence of state insurance regulators, insurers created special investigative units to address suspicious claims to facilitate the payment of legitimate claims. Many insurers have recruited ex-law enforcers who have little or no experience in health care matters and/or nurses with no investigative experience to comprise these units.
Reliance is critical for establishing fraud and often a major hindrance for law enforcers and prosecutors on moving fraud cases forward. Reliance refers to payors relying on information received from providers to be an accurate representation of what was provided in their determination to pay claims. Fraud issues arise when providers misrepresent material facts in submitted claims, e.g., services not rendered, misrepresenting the service provider, etc. Increased fraud prosecutions and financial recoveries? In the various (federal) prosecutorial jurisdictions in the United States, differing loss thresholds must be exceeded before the (illegal) activity will be considered for prosecution, e.g., $200,000.00, $1 million. What does this tell fraudsters – steal up to a certain amount, stop and change jurisdictions? In the end, the health care frashell-game game is perfect for fringe caregivers and deviant providers and suppliers who jockey for unfettered access to health care dollars from a payment system incapable or unwilling to employ necessary mechanisms to address fraud appropriately – on the front-end before the claims are paid! These deviant providers and suppliers know that every claim is not looked at before it is paid and operate knowing that it is impossible to detect, investigate and prosecute everyone committing fraud!