Experts predict that close to $3 trillion
will be spent annually within the
health care industry over the next few years, says William Gedman, vice president, Quality Audit, Fraud & Abuse with
UPMC Health Plan. That much money is
sure to attract a criminal element. Certainly, the vast majority of both physicians and
members would never seek to defraud.
Nonetheless, the industry estimate is that 3
to 10 percent of all health care claims are
fraudulent.
The health care claims billing and reimbursement process, medical billing and
coding convention, and compliance requirements in particular are so complex it
almost fosters abuse, says Gedman. It can
be extremely difficult to detect fraud or
abuse in this system because of the volume
of transactions, billing and coding complexities and ‘creative’ abusers.
Smart Business spoke to Gedman about
how employers and employees can protect
their health care assets.
What are examples of fraud and abuse?
There are numerous types of health care
fraud and abuse. Fraud can include identity theft resulting from stolen insurance
cards, drug-seeking behavior on the part of
the member or drug diversions on the part
of health care providers. Other types of
fraud or abuse include medical providers
billing for services not rendered or billing
for more complex services than were actually performed. Fraud can also occur at
pharmacies. For example, they may substitute generic drugs for brand-name drugs or
charge an insurance company for drugs
never picked up by its members.
In the health care business, there are so
many transactions being processed it is
often difficult to detect fraud prior to payment being sent to a provider. Once a reimbursement is made, it can be more difficult
for an insurance company to recover inappropriate payments.
How can managed care organizations crack
down on fraud?
It is important to establish strong internal
controls around the claims payment process. There should also be a Special Investigations Unit, which is actually a requirement for many insurance carriers. An SIU
should conduct data mining and analysis.
Considerations should be given to installing and monitoring fraud detection software, which can identify trends or red flags
that require further investigation. Cooperation with regulators and law enforcement
entities that fight fraud is also essential.
Health care providers should be routinely educated on industry medical record
and coding requirements, as well as trends
and potential fraud and abuse, and how it
can be detected. Managed care organizations should also work to educate members about types of fraud and ways to identify potential fraud and abuse.
What steps can an employer take to protect
employees from health care fraud?
Education is a must. People need to
understand what types of potential fraud
or abuse are possible. Employers should
be very selective and demanding when
they choose an insurance carrier. They
should make sure their insurer has strong
controls in place to detect fraud and the
infrastructure in place to investigate and
prevent fraud and abuse.
How can an employee detect and prevent
potential fraud or abuse?
Awareness is essential for protection
against fraud. Employees must educate
themselves about potential types of fraud and abuse and play an active role in their
health care. They must review their Explanation of Benefits and understand all
services rendered. This is the only way to
determine if you and your insurance company are being appropriately charged for
services or supplies/equipment.
In many instances, people do not question medical providers because they are
regarded as authority figures. Employees
should never be afraid to ask physicians
about treatment options and prescription
choices. Those receiving services should
fully understand their treatments. This will
help them get the best possible care and
understand the services for which they and
their insurance company are paying.
What should members do if their insurance
information is stolen or they feel they are
being charged incorrectly?
Employees need to treat their insurance
information like they treat their credit card
information. They should not share their
member identification numbers with others or use their information on unsecure
Web sites. If this information falls into the
wrong hands, billing fraud could occur, and
it is possible that inappropriate information could subsequently appear on their
medical records. Future treatment or insurance coverage could be affected by this
inaccurate medical record information.
Members should contact the insurance
company immediately if information is
stolen or if they disagree with what has
been billed. In addition to customer service
lines, insurers should have a fraud and
abuse hotline where people can call in with
issues regarding suspected fraud and
abuse. The information should be kept
confidential and tips can be anonymous.
How does fraud and abuse affect health care
costs?
The obvious answer is increased premiums. Someone has to pay for fraudulent
claims. However, increased costs also
occur because of the administrative
expense required to detect and investigate
suspected fraud and abuse. This causes
increased health care costs for everyone.
WILLIAM GEDMAN is vice president of Quality Audit, Fraud &
Abuse with UPMC Health Plan. Reach him at (412) 454-5675 or
[email protected].
