With health-care insurance fraud on the rise, consumers, insurance providers and physicians are facing bigger headaches.
Though conservative estimates such as that of the National Health Care Anti-Fraud Association, NHCAA, put the problem at $60 billion a year, questionable medical procedures and identity theft are proving that the fraud issue is no longer just a financial one.
“The genesis of the problem is based on the fact the health-care system is so large and complex, it makes it so easy for those who want to commit fraud to get away with it,” says Joel Portice, president of Verisk Health, which specializes in health-care analytics and risk-management solutions.
Portice says even though the incidence of fraud in the industry has remained the same, the gross amount has risen with overall spending.
“The United States spends $2.7 trillion on health care, with between three and 10 percent of that amount lost to fraud,” he says. “That makes it a $70 billion dollar problem—and that’s on the short end—and over $234 billion on the high end.”
This loss directly impacts patients, taxpayers, and the government through higher health-care costs, insurance premiums, and taxes, according to the NCHAA, with individuals paying an additional $235 annually due to fraud.
Bad Medicine
But patients aren’t just feeling it in the pocketbook, says Calvin Sneed, senior anti-fraud consultant for the Blue Cross and Blue Shield Association (BCBSA).
“Some really bad actors are causing patients harm,” says Sneed. “It’s become much more prevalent in the last 10 years, especially when it comes to things like performing invasive procedures.”
Lou Saccoccio, executive director of the NCHAA, suggests that all patients ask questions and consider getting second opinions, especially if a recommended procedure seems unnecessary or unsafe.
“For individual patients and consumers, I think the most important thing is really recognizing that health-care fraud exists, and that it is a significant problem, and that whenever they’re in the health-care system just to be aware of that,” Saccoccio says.
“It’s OK to question doctors,” Verisk Health's Portice agrees. “The vast majority is in it for humanitarian reasons, but there’s a small subset that are questionable.”
Sneed of BCBSA says another form of health-care fraud that is on the rise is medical identity theft. In “a down economy like we’ve had for the past couple of years," people who can’t afford health-care benefits are resorting to fraudulent measures, he says. While some individuals trade off their medical identity, others participate in identity sharing.
The NCHAA's Saccoccio says one way to circumvent this type of fraud is by asking to see a second form of identification at the time the card is presented.
“Also, in the technologically ubiquitous world we live in, you have bad guys who are looking to get their hands on a long list [of insureds] and submit claims for large sums of money,” Sneed explains.
Saccoccio of the NCHAA urges consumers to protect their health-care information or Medicare card just like they would a Social Securitynumber or a credit card. He also advises individuals to not disclose any information over the telephone unless they have no doubt about the identity of the person to whom they are speaking.
“Every time you get an explanation of benefits , EOB, take a look at it. Make sure the information on them is accurate and that the date of service is actually the date of service and that the service was the one provided to you,” Saccoccio says. “If you find something that is incorrect, call your insurance company.”
Following a thorough review of the EOB, dispose of it properly to avoid potential identity theft, the BCBSA recommends.
Raising Your Fraud IQ
BCBSA's Sneed says patients should be informed, keep good records, and use common sense. Anything that comes across as a free service in exchange for insurance information should be a red flag, he says.
“There have been cases where the patients actually have been part of the fraud,” Saccoccio says. “They’ve actually undergone procedures in order for the physician to generate billing for that procedure but either in return for a cash payment or free cosmetic surgery. If someone is offering you free health-care services if you give us your insurance number or your Medicare number, you have to be very wary of that because they could be trying to collect information to file false claims.”
If a co-pay or deductible gets waived, that’s another red flag, Sneed says. BCBSA recommends reporting instances where co-payment or deductibles are waived, as it is a common indicator that a provider is obtaining inflated payments, which result in insurance premium increases for everyone. A patient should never sign blank insurance claims either, he advises.
What Providers Can Do
In addition to the BCBSA National Anti-Fraud Department(NAFD), Sneed says, each independent Blue Plan has its own anti-fraud unit. One of the most successful components of an investigative team is having a diverse staff, he says.
Years ago, a large number of those doing the “gumshoe” work were retired from the police force. Today, Sneed says, having people who have a clinical and medical background can recognize when a diagnosis doesn’t match the services provided. Another asset is using technology to analyze emerging trends and schemes, he says.
Portice of Verisk Health says with health-care reform becoming a national dialogue, there is a greater awareness among consumers of where money is being spent and an escalated awareness of the tremendous amount being lost.
“The more we can educate folks, the better,” he says.
Saccoccio advises doctors and other health-care providers to be mindful when considering who they work with and employ.
“Doctors should be careful about who they hire to do their billing, where they’re sending their patients for laboratory services, what kind of arrangements do they have with other people that they may want to look out for,” he says. “Any health-care provider wants to make sure they’re always employing people who are on the up and up.”
While there is no magic elixir to cure fraud of bilking billions from the health-care system, being aware of it, in all forms, can be the first step to finding a remedy.