The Fight against Healthcare Fraud Is Everyone's Fight
By Barry Johnson
Are your healthcare claims unusually high? Are a large number of your employees getting cosmetic dentistry? Is a small percentage of employees responsible for a majority of pharmacy claims? Do most of the claims come from the same provider or pharmacy? If the answer to any of those questions is yes, you may have a healthcare fraud problem.
If you're a business head, you need to look out for red flags and use common sense when overseeing your employees, vendors, and providers — and make sure your contracted health insurance companies are doing the same.
Although many issues surrounding healthcare are uncertain, one fact is indisputable: There will always be those looking to defraud the system.
Another constant of healthcare fraud is its expense. It affects patients, insureds, providers, governments, and any business with employee health coverage. The United States spends nearly $3 trillion on healthcare annually, with estimated losses of up to $235 billion.
Billions of dollars are wasted each year on payments made as a result of falsified medical claims. Not only does this affect the property/casualty and healthcare insurance industries, but it also exploits state and government healthcare programs.
It's a common misconception among consumers that the insurance industry bears the brunt of losses from this ongoing abuse. Instead, it is consumers who are suffering, because the cost of fraud is one of the primary reasons behind constantly increasing health insurance rates. Governmental agencies, regulators, and politicians are issuing antifraud and waste messages to consumers, intending to change their attitudes and clear up any confusion about fraud.
The exact impact of healthcare fraud on businesses is difficult to measure, but this much we do know: The problem is more common than most people think, and it comes in many shapes and sizes.
Medical identity theft occurs when an insurance card is lost or stolen or when an insured employee willingly gives his or her card to an uninsured friend or relative. In one instance, a health plan member gave a drug dealer his insurance card in exchange for drugs. Over time, the drug dealer became terminally ill. Knowing he was going to die and wanting to be buried under his own name, he confessed to his nurse. The hospital then informed the member, who later admitted to the scheme. As a result, the member was terminated from his job, and the hospital claims were denied.
Medical identify theft creates risks and causes harm at many levels. The medical record of the insured can be compromised and reflect care not received, creating future patient safety issues. The medical team is often caring for the uninsured using the insured's medical history, which is also dangerous. And the payer is funding healthcare for an ineligible imposter.
Payers can detect this type of fraud by looking for patterns and red flags in claims and records. Red flags may include births with no prenatal care, several single live births by the same mother within an illogical time frame (e.g., seven months), or numerous births where the newborns do not become dependents. Special investigation units (SIU) might also discover such cases after reviewing employment records that show the patient was at work during the birth.
Medical identity theft can and does occur in costly situations such as childbirth and even more expensive circumstances, including ER trauma and organ transplant. Because of these fraud risks, health plans need to demonstrate diligent fraud control. Such a program would include data-mining software to detect and prevent fraud and effective photo identification to ensure only claims-eligible employees receive care.
Fraudulent medical schemes are a growing problem in the health and property/casualty insurance sectors. Businesses can help prevent healthcare fraud by making sure the entity reviewing and paying healthcare claims has a robust fraud control program and by forwarding concerns to the insurance company's SIU. It's up to all of us to battle healthcare fraud.
Dr. Barry L. Johnson, D.D.S., is president of HealthCare Insight (HCI).