Today, health care fraud is all over the news. There undoubtedly
is fraud in health care. The same is true for every business or endeavor
touched by human hands, e.g. banking, credit, insurance, politics, etc.
There is no question that health care providers who abuse their
position and our trust to steal are a problem. So are those from other
professions who do the same.
Why does health care fraud appear to
get the ‘lions-share’ of attention? Could it be that it is the perfect
vehicle to drive agendas for divergent groups where taxpayers, health
care consumers and health care providers are dupes in a health care
fraud shell-game operated with ‘sleight-of-hand’ precision?
Take a
closer look and one finds this is no game-of-chance. Taxpayers,
consumers and providers always lose because the problem with health care
fraud is not just the fraud, but it is that our government and insurers
use the fraud problem to further agendas while at the same time fail to
be accountable and take responsibility for a fraud problem they
facilitate and allow to flourish.
1. Astronomical Cost Estimates
What better way to report on fraud then to tout fraud cost estimates, e.g.
-
“Fraud perpetrated against both public and private health plans costs
between $72 and $220 billion annually, increasing the cost of medical
care and health insurance and undermining public trust in our health
care system… It is no longer a secret that fraud represents one of the
fastest growing and most costly forms of crime in America today… We
pay these costs as taxpayers and through higher health insurance
premiums… We must be proactive in combating health care fraud and
abuse… We must also ensure that law enforcement has the tools that it
needs to deter, detect, and punish health care fraud.” [Senator Ted
Kaufman (D-DE), 10/28/09 press release]
- The General Accounting
Office (GAO) estimates that fraud in healthcare ranges from $60 billion
to $600 billion per year – or anywhere between 3% and 10% of the $2
trillion health care budget. [Health Care Finance News reports, 10/2/09]
The GAO is the investigative arm of Congress.
- The National
Health Care Anti-Fraud Association (NHCAA) reports over $54 billion is
stolen every year in scams designed to stick us and our insurance
companies with fraudulent and illegal medical charges. [NHCAA, web-site]
NHCAA was created and is funded by health insurance companies.
Unfortunately,
the reliability of the purported estimates is dubious at best.
Insurers, state and federal agencies, and others may gather fraud data
related to their own missions, where the kind, quality and volume of
data compiled varies widely. David Hyman, professor of Law, University
of Maryland, tells us that the widely-disseminated estimates of the
incidence of health care fraud and abuse (assumed to be 10% of total
spending) lacks any empirical foundation at all, the little we do know
about health care fraud and abuse is dwarfed by what we don’t know and
what we know that is not so. [The Cato Journal, 3/22/02]
2. Health Care Standards
The
laws & rules governing health care – vary from state to state and
from payor to payor – are extensive and very confusing for providers and
others to understand as they are written in legalese and not plain
speak.
Providers use specific codes to report conditions treated
(ICD-9) and services rendered (CPT-4 and HCPCS). These codes are used
when seeking compensation from payors for services rendered to patients.
Although created to universally apply to facilitate accurate reporting
to reflect providers’ services, many insurers instruct providers to
report codes based on what the insurer’s computer editing programs
recognize – not on what the provider rendered. Further, practice
building consultants instruct providers on what codes to report to get
paid – in some cases codes that do not accurately reflect the provider’s
service.
Consumers know what services they receive from their
doctor or other provider but may not have a clue as to what those
billing codes or service descriptors mean on explanation of benefits
received from insurers. This lack of understanding may result in
consumers moving on without gaining clarification of what the codes
mean, or may result in some believing they were improperly billed. The
multitude of insurance plans available today, with varying levels of
coverage, ad a wild card to the equation when services are denied for
non-coverage – especially if it is Medicare that denotes non-covered
services as not medically necessary.
3. Proactively addressing the health care fraud problem
The
government and insurers do very little to proactively address the
problem with tangible activities that will result in detecting
inappropriate claims before they are paid. Indeed, payors of health care
claims proclaim to operate a payment system based on trust that
providers bill accurately for services rendered, as they can not review
every claim before payment is made because the reimbursement system
would shut down.
They claim to use sophisticated computer programs
to look for errors and patterns in claims, have increased pre- and
post-payment audits of selected providers to detect fraud, and have
created consortiums and task forces consisting of law enforcers and
insurance investigators to study the problem and share fraud
information. However, this activity, for the most part, is dealing with
activity after the claim is paid and has little bearing on the proactive
detection of fraud.
4. Exorcise health care fraud with the creation of new laws
The
government’s reports on the fraud problem are published in earnest in
conjunction with efforts to reform our health care system, and our
experience shows us that it ultimately results in the government
introducing and enacting new laws – presuming new laws will result in
more fraud detected, investigated and prosecuted – without establishing
how new laws will accomplish this more effectively than existing laws
that were not used to their full potential.
With such efforts in
1996, we got the Health Insurance Portability and Accountability Act
(HIPAA). It was enacted by Congress to address insurance portability and
accountability for patient privacy and health care fraud and abuse.
HIPAA purportedly was to equip federal law enforcers and prosecutors
with the tools to attack fraud, and resulted in the creation of a number
of new health care fraud statutes, including: Health Care Fraud, Theft
or Embezzlement in Health Care, Obstructing Criminal Investigation of
Health Care, and False Statements Relating to Health Care Fraud Matters.
In
2009, the Health Care Fraud Enforcement Act appeared on the scene. This
act has recently been introduced by Congress with promises that it will
build on fraud prevention efforts and strengthen the governments’
capacity to investigate and prosecute waste, fraud and abuse in both
government and private health insurance by sentencing increases;
redefining health care fraud offense; improving whistleblower claims;
creating common-sense mental state requirement for health care fraud
offenses; and increasing funding in federal antifraud spending.
Undoubtedly,
law enforcers and prosecutors MUST have the tools to effectively do
their jobs. However, these actions alone, without inclusion of some
tangible and significant before-the-claim-is-paid actions, will have
little impact on reducing the occurrence of the problem.
What’s
one person’s fraud (insurer alleging medically unnecessary services) is
another person’s savior (provider administering tests to defend against
potential lawsuits from legal sharks). Is tort reform a possibility from
those pushing for health care reform? Unfortunately, it is not! Support
for legislation placing new and onerous requirements on providers in
the name of fighting fraud, however, does not appear to be a problem.
If Congress really wants to use its legislative powers
to make a difference on the fraud problem they must think
outside-the-box of what has already been done in some form or fashion.
Focus on some front-end activity that deals with addressing the fraud
before it happens. The following are illustrative of steps that could be
taken in an effort to stem-the-tide on fraud and abuse:
- DEMAND
all payors and providers, suppliers and others only use approved coding
systems, where the codes are clearly defined for ALL to know and
understand what the specific code means. Prohibit anyone from deviating
from the defined meaning when reporting services rendered (providers,
suppliers) and adjudicating claims for payment (payors and others). Make
violations a strict liability issue.
- REQUIRE that all submitted
claims to public and private insurers be signed or annotated in some
fashion by the patient (or appropriate representative) affirming they
received the reported and billed services. If such affirmation is not
present claim isn’t paid. If the claim is later determined to be
problematic investigators have the ability to talk with both the
provider and the patient…
- REQUIRE that all claims-handlers
(especially if they have authority to pay claims), consultants retained
by insurers to assist on adjudicating claims, and fraud investigators be
certified by a national accrediting company under the purview of the
government to exhibit that they have the requisite understanding for
recognizing health care fraud, and the knowledge to detect and
investigate the fraud in health care claims. If such accreditation is
not obtained, then neither the employee nor the consultant would be
permitted to touch a health care claim or investigate suspected health
care fraud.
- PROHIBIT public and private payors from asserting
fraud on claims previously paid where it is established that the payor
knew or should have known the claim was improper and should not have
been paid. And, in those cases where fraud is established in paid claims
any monies collected from providers and suppliers for overpayments be
deposited into a national account to fund various fraud and abuse
education programs for consumers, insurers, law enforcers, prosecutors,
legislators and others; fund front-line investigators for state health
care regulatory boards to investigate fraud in their respective
jurisdictions; as well as funding other health care related activity.
-
PROHIBIT insurers from raising premiums of policyholders based on
estimates of the occurrence of fraud. Require insurers to establish a
factual basis for purported losses attributed to fraud coupled with
showing tangible proof of their efforts to detect and investigate fraud,
as well as not paying fraudulent claims.
5. Insurers are victims of health care fraud
Insurers,
as a regular course of business, offer reports on fraud to present
themselves as victims of fraud by deviant providers and suppliers.
It
is disingenuous for insurers to proclaim victim-status when they have
the ability to review claims before they are paid, but choose not to
because it would impact the flow of the reimbursement system that is
under-staffed. Further, for years, insurers have operated within a
culture where fraudulent claims were just a part of the cost of doing
business. Then, because they were victims of the putative fraud, they
pass these losses on to policyholders in the form of higher premiums
(despite the duty and ability to review claims before they are paid). Do
your premiums continue to rise?
Insurers make a ton of money, and
under the cloak of fraud-fighting, are now keeping more of it by
alleging fraud in claims to avoid paying legitimate claims, as well as
going after monies paid on claims for services performed many years
prior from providers too petrified to fight-back. Additionally, many
insurers, believing a lack of responsiveness by law enforcers, file
civil suits against providers and entities alleging fraud.
6. Increased investigations and prosecutions of health care fraud
Purportedly,
the government (and insurers) have assigned more people to investigate
fraud, are conducting more investigations, and are prosecuting more
fraud offenders.
With the increase in the numbers of
investigators, it is not uncommon for law enforcers assigned to work
fraud cases to lack the knowledge and understanding for working these
types of cases. It is also not uncommon that law enforcers from multiple
agencies expend their investigative efforts and numerous man-hours by
working on the same fraud case.
Law enforcers, especially at the
federal level, may not actively investigate fraud cases unless they have
the tacit approval of a prosecutor. Some law enforcers who do not want
to work a case, no matter how good it may be, seek out a prosecutor for a
declination on cases presented in the most negative light.
Health
Care Regulatory Boards are often not seen as a viable member of the
investigative team. Boards regularly investigate complaints of
inappropriate conduct by licensees under their purview. The major
consistency of these boards are licensed providers, typically in active
practice, that have the pulse of what is going on in their state.
Insurers,
at the insistence of state insurance regulators, created special
investigative units to address suspicious claims to facilitate the
payment of legitimate claims. Many insurers have recruited ex-law
enforcers who have little or no experience on health care matters and/or
nurses with no investigative experience to comprise these units.
Reliance
is critical for establishing fraud, and often a major hindrance for law
enforcers and prosecutors on moving fraud cases forward. Reliance
refers to payors relying on information received from providers to be an
accurate representation of what was provided in their determination to
pay claims. Fraud issues arise when providers misrepresent material
facts in submitted claims, e.g. services not rendered, misrepresenting
the service provider, etc.
Increased fraud prosecutions and
financial recoveries? In the various (federal) prosecutorial
jurisdictions in the United States, there are differing loss- thresholds
that must be exceeded before the (illegal) activity will be considered
for prosecution, e.g. $200,000.00, $1 million. What does this tell
fraudsters – steal up to a certain amount, stop and change
jurisdictions?
In the end, the health care fraud shell-game is
perfect for fringe care-givers and deviant providers and suppliers who
jockey for unfettered-access to health care dollars from a payment
system incapable or unwilling to employ necessary mechanisms to
appropriately address fraud – on the front-end before the claims are
paid! These deviant providers and suppliers know that every claim is not
looked at before it is paid, and operate knowing that it is then
impossible to detect, investigate and prosecute everyone who is
committing fraud!
Lucky for us, there are countless experienced
and dedicated professionals working in the trenches to combat fraud that
persevere in the face of adversity, making a difference one claim/case
at a time! These professionals include, but are not limited to:
Providers of all disciplines; Regulatory Boards (Insurance and Health
Care); Insurance Company Claims Handlers and Special Investigators;
Local, State and Federal Law Enforcers; State and Federal Prosecutors;
and others.