Fraud, waste and abuse in the health care system are rampant, with 4 to 7 percent of health care expenses attributed to these actions.
“The vast majority are errors, waste and abuse such as improperly coding a medical claim submitted to an insurer, while a small minority is fraud committed with the intent to receive improper payment,” says Kurt Spear, vice president of Financial Investigation and Provider Review at Highmark Blue Cross Blue Shield. “This is costly to the entire system and to consumers, and everyone needs to work together to reduce unnecessary costs.”
Smart Business spoke with Spear about how health plan payers, medical providers, employers and consumers can help reduce fraud, waste and abuse in health care.
What are some examples of waste, fraud and abuse?
Examples include providing unnecessary services, such as X-raying every patient, not following medical best practices and not using resources wisely. Excessive charges can also result from mistakes in coding or taking advantage of the system in the form of upcoding or unbundling of services.
Although waste and abuse are more prevalent, fraud does exist across the health care landscape. Fraud occurs when bad actors have intent to knowingly obtain improper payment or something of value. As fraudsters become more sophisticated, it is critical for health payers to innovate and cooperate with organizations nationally to identify and root out issues before they become full-blown fraud schemes.
How is technology helping to identify patterns of misuse?
Technology is critical. Historically, health plans have looked for patterns of unusual activity in data, such as providers billing for unusual services outside of their practice areas, or members receiving services that don’t make sense from a medical treatment standpoint. When an aberrancy was identified, health plans investigated.
With the help of technology, including artificial intelligence, health plans no longer need to wait to identify suspect activity in the data. This allows fraud schemes to be mitigated faster, with less financial impact.
Although technology is vital to identifying potential fraud, waste and abuse, it takes a team of trained professionals to investigate and resolve these schemes. Health plans commonly work with a wide range of professionals, including former law enforcement, physicians, hospital revenue cycle administrators, coders, pharmacists and nurses who can identify where there might be unnecessary procedures or medications, or billing and coding anomalies.
How can a health plan help self-funded companies monitor for errant billing?
Coordination is key. It takes all of us working together, health plans, employer groups and members, to have an impact. Self-funded customers continue to develop advanced tools to report on treatment and medical claims patterns. Health plans often work with customers to communicate unusual trends and look out for fraud.
Health plans can also conduct educational activities with customers to aid in understanding the red flags of fraud, waste and abuse. Sometimes the best tips come from our customers. If a member sees something unusual on their explanation of benefits — services billed that they didn’t receive, for example — they should call the anti-fraud unit listed on the EOB.
Members should also be aware of schemes that include unusual phone calls regarding their benefits, or someone reaching out on social media. These contacts can seem legitimate, but if someone asks for your Social Security number or health insurance ID number, or makes an offer that seems too good to be true in terms of rewards, gift cards or free vacations, question that. If you have suspicions, reach out to your health plan.
Ultimately, health care fraud, waste and abuse drive up the cost of health care for everyone, raising the cost of premiums, out-of-pocket expenses, deductibles and co-pays. It impacts all of us, both individually and as taxpayers, as fraud, waste and abuse in federal programs such as Medicare and Medicaid increase costs across the board.
Learning to identify unusual activity on billing statements and ads on social media, for example, are good ways to help drive better outcomes for members and patients and lower costs for all.
INSIGHTS Health Care is brought to you by Highmark Blue Cross Blue Shield.