What is Being Done About Medical Billing Fraud?

November 19, 2012 in health care costs, Health Insurance, Insurance Bills, Medical Care, Member Stories

Over the last few years, healthcare insurers have been focusing on fraud detection. Their efforts have been undertaken with the cooperation of the National Health Care Anti-Fraud Association (NHCAA). The increasing numbers of suspected fraudulent medical claims are related to the economy, legislative attempts to help the consumer and general changes in ethical behavior. Also, a real danger exists because when medical service providers and attorneys are working in cahoots with fraudsters, prescribed treatment can be unnecessary and may even cause harm to patients.

The property and casualty insurance industry is also stepping up to implement fraud control. That’s because a significant amount of healthcare fraud starts with an incident related to property casualty insurance. For example, in the New York City area, about one in five no-fault auto insurance claims appear to contain elements of fraud. In addition, as much as one in three claims appear to be inflated.

Recently the National Insurance Crime Bureau (NCIB) asked leading property/casualty insurers to participate in a project to analyze medical billing data and place it in a single database. It is hoped that the ongoing participation of these insurers on supplying data for this project will enable the industry to be aware of emerging trends regarding potential fraud around medical billing.

This data has already flushed out some suspicious patterns. For example, in one case, a provider billed more than $1.4 million over a 19-month period while peers of the provider during the same period billed an average of $11,135. The peers saw an average of 9.25 patients while the main provider saw 7,195 in the nineteen month period. In addition, the main provider billed $20,591 per day for 104 patients, while the peers billed an average of $1,689 for three daily patients.

Minus the ability to see this data across different carriers, this pattern would not have been spotted. It makes it easier for the NCIB to build cases against the most egregious offenders.  That’s because after the data is analyzed and reviewed, the NCIB is provided with a list of suspected fraudulent providers.  After an internal investigation, NCIB issues alerts to member carriers about the data. It’s a summary of concerns so that the carrier’s SIUs (Special Investigations Unit) can take the best action to address any concerns.

The hope is that this effort (which has met with overwhelming support from carriers) will help reduce the 3 to 10 percent of physician and clinical care expense fraud, waste and abuse. The goal is to prosecute and put the true fraudsters out of business while protecting honest providers.

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