A recent Insurance Thought Leadership article challenged our industry by asking, “Are We Serious About Health Insurance Fraud?”
Millions in false medical billing through fake NPIs
The piece referenced a recent case in which an unscrupulous personal trainer engaged in years of billing insurers for fake care. In reality, he was providing personal training services that weren’t covered by health insurance. But the bills—which were heavily padded as well as full of false treatments—told another story. That’s because the trainer had acquired several National Provider Identifier (NPI) numbers that allowed him to submit invoices as a sports medicine doctor. In the scam, he billed more than $25 million and netted about $4 million from some of the nation’s top healthcare insurers. A tip from his ex-wife finally reigned in his fake billing spree, which had lasted more than four years.
Why it’s so hard to find provider fraud in medical bills
Complex medical bills can make it difficult for adjusters—already overloaded with cases—to find potential fraudulent or excessive billing. Regulations in PIP states like New York that demand insurers pay claims within 30 days compress the time in which fraud can be uncovered. In addition, unscrupulous or fake doctors like the personal trainer referenced in the Insurance Thought Leadership article often play a “numbers game.” They submit large quantities of bills knowing that at least some of them will be paid—and rightly understanding that even when payment is refused, the abuse is often not pursued.
Single insurers can’t see the scope of fraud
No one insurer can likely see the scope of a fraudster’s efforts, because fake doctors cast a wide net, targeting many carriers in their schemes. But when these fake bills across many health insurers are tallied, the true cost of their crimes becomes clearer.
Using broad industry data to uncover provider fraud
The solution to this problem—estimated to cost between $30 billion and $50 billion a year—is to aggregate provider billing data and then analyze the data to find fraud, waste, and abuse. Such a medical provider billing database has already been built, and now an analytic solution that taps broad medical provider billing data is ready to uncover more fraud for more insurers than was possible in the past.
United we stand against provider fraud, waste, and abuse
Insurers can now access insights from billing information that spans many carriers, rather than depending on the information solely in their own claim histories. The critical difference of drawing on bigger pools of data enables the application of a robust fraud and abuse detection system that uses predictive analytics. With rich data sources and advanced analytics, insurers can sometimes catch unscrupulous providers on their first attempts at scamming.
Insurers can do more about the complex problem of provider fraud when they use the right tools.