Public/private databases could identify bad apples
HEALTHCARE FRAUD costs Americans between 3% and 10% of each dollar spent, which sounds like a rounding error until one realizes that $2.34 trillion in spent on healthcare annually. At the high end of the scale, that translates to $234 billion, equivalent to the economic impact of the oil, tourism, fishing and shipping industries on the Gulf of Mexico.
A white paper from The National Health Care Anti-Fraud Assn. (NHCAA), 'Combating Health Care Fraud in a Post-Reform World: Seven Guiding Principles for Policymakers,' outlines proposals the group believes will curb the problem. Of particular interest is the idea that anti-fraud information should be passed freely among private and public insurers and that health plans should have more leeway to bar providers suspected of fraud.
NHCAA's Special Investigation Resource and Intelligence System (SIRIS) database, where health plans can report fraudulent providers, has been underutilized because of a reluctance to input the data, says Barry Johnson, president of HealthCare Insight, which provides payment integrity solutions.
Carriers 'look information up, but they don't put information in,' says Johnson. 'I'm not aware of any sharing across health plans.'
Participating Blue Cross Blue Shield companies have collaborated on Blue Health Intelligence, which allows mining of claims data to uncover trends, including those regarding fraud and abuse.
T. Markus Funk, who leads the investigations and white collar defense group at Perkins Coie, believes the healthcare industry needs a common database, much like the informationsharing partnership between the Federal Bureau of Investigation and the private sector tracking cyberterrorism.
'Fraud schemes don't discriminate between public and private troughs of money,' says Funk, who prosecuted a number of healthcare fraud cases while serving as an assistant U.S. attorney. 'A highly fortified private/public partnership could help staunch the redistribution of wealth from law-abiding citizens to the criminal class.'
Funk acknowledges that private plans likely are reluctant to share information due to concerns about patient confidentiality and proprietary data, but he says those concerns are groundless.
Funk says. 'It's a false dichotomy to think you have to throw your books open,' he says.
The Patient Protection and Affordable Care Act (PPACA) calls for expansion of the CMS Integrated Data Repository that incorporates federal healthcare programs, but NHCAA suggests including private payer data so trends across both public and private plans can be identified.
'Deeper data results in more accurate analytics and an elimination of unnecessary inquiry,' says Willis Gee, vice president of claims integrity at Med Assurant. 'That is, all systems have some degree of 'false positive' rates. Greater access to data decreases this rate, allowing the legitimate provider to stand free and clear of any level of concern, while also allowing the system to pay more comprehensively once they know that fraud, waste and abuse have been eliminated from the system.'
Carrie Valiant, a partner at EpsteinBeckerGreen who specializes in healthcare fraud and abuse, appreciates the need to crack down on fraud. She's the co-author of 'Legal Issues in Healthcare Fraud and Abuse.'
'But there needs to be balance and established rules so good providers are not dissuaded from participating in various programs that are essential to the success of healthcare reform,' she says.
The possibility of disgruntled employees lodging specious complaints against a former employer is one concern. Another is how to determine whether shared data are reliable and what agency or authority will make those determinations. The fear of a provider being suspended without due process is another reason to be cautious, Valiant advises.
While the idea of expanding the federal database to include private payers has its appeal, Valiant says that government rules on eligibility and payment don't mirror those of private plans, which can create its own issues.
A shared database of non-proprietary information between public and private health plans would allow payers to weed out those who are abusing the system, another recommendation in the NHCAA whitepaper. However, policy guidelines from Medicare and many states require payers to accept any willing provider into their networks, with the belief that licensing boards will weed out the bad apples.
PPACA creates a screening process for providers that takes into account the potential risk of fraud, waste and abuse.
'I've had clients thrown out of the federal healthcare system because they forgot to file a piece of paper that they moved,' Valiant says. 'It used to be easy to get reinstated, but not any more.'
She notes that the enforcement climate has gotten more stringent, with overpayments now becoming civil fraud claims and what were once civil cases being pursued as criminal actions. The potential for overreach can chill the desire of providers to participate in certain insurance plans.
While there's always a possibility that providers might be removed because of a rudimentary mistake, 99% of healthcare fraud cases are just that ? fraud, says Funk.
'It's odd that the forms are filled out the same way and in a way that always benefits [the providers],' he says.
Gee says that data systems should encompass comprehensive case identification and validation. Insight from these processes can bring about changes in preauthorization, contracting and documentation requirements that can aid legitimate providers while thwarting those trying to game the system.
'I wholeheartedly agree with the Government Accountability Office's new mandate to shift from a payand-chase' mindset to 'preventionand-detection' for fighting long-term healthcare fraud,' says Jonathan Marks, partner-in-charge at Crowe Howarth LLP's fraud, ethics and anti-corruption services. 'A national database of questionable providers, for example, could be used to monitor swings in accounts payable and accounts receivable.'
Other fraud detection tactics he suggests include random audits and mandatory IT upgrades for practices with significant Medicare revenue, enhanced background checks on new hires and the creation of a national hotline audited annually. Mandatory coding certification administered by one national organization also could stem instances of fraud, Marks says.
PROVIDER NETWORK WINS OUT
In areas of the country where physician or hospital coverage is sparse, private payers sometimes look the other way when dealing with fraudulent claims, says Johnson.
'In certain instances where providers were clearly abusing the system, organizations weighed the cost of penalties [for gaps in coverage] versus losses due to fraud,' he says. 'We have to fix this somehow.'
Laws penalizing payers for failing to settle claims within a certain time window exacerbate the chance for fraud, as do low reimbursement rates for Medicare and Medicaid. But the status quo definitely is not working, Johnson says.
'If 95 out of 100 are playing by the rules, we can't let the other five get away with it,' he says.
[Sidebar]
MHE EXECUTIVE VIEW
* Sharing data on fraudulent providers can prevent losses.
* Balance protective measures with the needs of legitimate providers.
* Don't be reluctant to report possible fraud.
[Author Affiliation]
Matt Bolch is an Atlanta-based freelance writer.
