Good results in curbing Medicare fraud — so far
Don’t like Obama? Hate Obamacare? Fine.
But even the President’s harshest detractors should recognize that this administration is on the verge of accomplishing something no other President has done — effectively combat medical fraud.
Fraud by medical providers is the most costliest form of insurance fraud and a huge drain on federal taxpayers, at least $60 billion a year.
So the latest statistics on the success of the government’s attack on Medicare fraud are welcome news. In just two years, arrests have spiked 75 percent. More than $4 billion has been recovered from fraudsters. And nearly 5,000 medical providers have been kicked out Medicare. And it looks like the 2012 stats will be even better.
Healthcare reform legislation gave federal fraud fighters a bevy of new tools — and gobs of money for new anti-fraud programs. And while some initiatives are slow out of the starting gate, others are quickly gaining traction and are producing solid results in just two years.
Medicare now can stop the flow of bad claims before real money goes out the door. Like many others, I was leery that Medicare would really abandon its pay-and-chase model of fraud fighting for more proactive initiatives. But the federal government seems to have an honest commitment to do just that, starting with better screening of medical providers and embracing predictive modeling technology.
All the new anti-fraud tools are great, but they won’t have much impact without a willingness to use them effectively, plus a conducive and lasting anti-fraud culture in the federal government.
One sign the culture is changing is the new level of cooperation among federal agencies. Enhanced collaboration among Health & Human Services, the Office of Inspector General and the Department of Justice already is paying dividends — as evidenced by the recent nationwide fraud sweep of 107 suspect medical providers.
But collaborative efforts are going even farther. Federal agencies are now beginning to reach out to state fraud bureaus and private insurers to even better leverage their new anti-fraud tools.
The U.S. Government Accountability Office and several members of Congress have been critical that some anti-fraud programs are too slow off the mark or are not producing good enough results. That’s legitimate criticism, but major structural and cultural deficiencies that took 50 years to create aren’t going to improve in just two or three.
Still, the progress of the last two years will need to continue ― and then some ― for many years before taxpayers finally get relief from this enormous fraud tax.
If the Supreme Court tosses out Obamacare, it’ll be a shame if anti-fraud efforts are lost as well, because this is one area in healthcare that has the most promise to succeed.
About the author: Dennis Jay is executive director for the Coalition Against Insurance Fraud.
A brief history of analgesic’s holy grail
75 Americans will die today from a prescription drug overdose. In fact, prescription drug overdose is rated as the second most frequent cause of accidental death. It’s not just a problem for adults — every hour a baby is born in the U.S. with symptoms of withdrawal from opiates — meaning 13,500 babies a year.
How did we get here?
Nowadays, almost all prescription drugs that are misused come from doctors’ prescriptions, and end up in the wrong hands through theft or sale. Insurance companies often pay for prescriptions.
But painkillers have existed long before prescriptions or insurance companies have. In 5000 B.C., Sumerian tablets named opium poppies HulGil, or “joy plant”. Egyptian Papyrus from 1550 B.C, archives instructions on using grains of poppy plant as medicine.
With pain relief came the drug’s euphoric feelings, and an onset of steady addiction. Non-addictive painkillers became the holy grail of chemists, who set about toying with molecular structures of opioids to get the perfect combination of maximum benefit with minimum risk. In time, they developed several close calls.
Codeine (1830), heroin (1874), and oxycodone (1916) were all advertised immediately after their discoveries as the perfect painkillers, noted for their ‘non-addictive’ properties, and ability to replace their antecedents in the painkiller world.
Morphine, developed in the early 1800s, remains the gold standard for treating severe pain, and is given to cancer patients to this day. The first civil war (1861 – 1865) in America largely depended on the availability of morphine, with one general quoted saying “You can’t fight wars without morphine.”
As the problem of addiction became a growing concern, the Bureau of Social Hygiene created a Committee on Drug Addiction. In 1929, the committee decided upon a research plan that involved three components — chemical, pharmacological, and clinical. After the first decade of research, 500 compounds were ready for testing in animals. Three were tested on humans for pain relief and dependence liability.
Seeking to help existing addicts and understand the root of the problem, the narcotic farm (U.S. Public Health Service Hospital) in Lexington, Ky. was opened in 1935. Prisons that had been flooded with addicts now sent drug-addicted criminals to Lexington for treatment. The Addiction Research Center (ARC) inside the farm was open until 1970 and is today known for accomplishing many of the landmark studies in the field of drug abuse.
Hundreds of prisoners were recruited to volunteer in the ARC as guinea pigs for groundbreaking drug experiments. Scientists would administer heroin, morphine, and other drugs, and take note of what effects it had on the addict. In other experiments, they abruptly stopped dispensing heroin to cause withdrawal symptoms, and then introduce dan experimental drug to see if it would effectively relieve withdrawal symptoms.
Then, Analgesic Clinical Trial Translations, Innovations, Opportunities, and Networks (ACTTION) was established as a “public-private partnership with the United States Food and Drug Administration (FDA) to identify, prioritize, sponsor, coordinate, and promote innovative activities — with a special interest in optimizing clinical trials — that will expedite the discovery and development of improved analgesic treatments for the benefit of the public health.”
In the 1940s, the opiate program at the National Institutes of Health (NIH) began, and has resulted in more than 750 research papers and patents. Some 59 drugs identified as painkillers were introduced from 1960 to 2009, and remain in use today. From 1960 to 2009, pain-related publications grew exponentially: The number of articles almost tripled during the first and second decades, and then doubled during each of the next three decades until 2009. Intensive research has produced thousands of publications, but none of these efforts has yielded new painkillers that can significantly change the scope of the opioid addiction problem.
Today, various laboratories are synthesizing different molecules in hope of finding the perfect cure. Though progress has been made, the answer has not yet been found. It will take a national database where researchers can share their results, more funding, and certainly more time before we may ever reach painkillers’ holy grail.
About the author: Jennifer Tchinnosian is communications specialist for the Coalition Against Insurance Fraud.
JIFA reveals no-holds insight about fraud fight
An angry child calls his convicted fraudster dad a liar…An executive dismisses a job applicant after learning she has a fraud record…A wife is outraged that her hubby lied to their auto insurer that someone stole their car.
Sounds like the fraud version of a daytime soap ― “As the Stomach Turns.” But these are TV ads by an astute Pennsylvania anti-fraud agency. It uses science to create the ads, and measure results.
In fact, the ads show that public outreach can measurably convince people not to commit fraud. We need more science like this to get all of our anti-fraud messages right.
How measurably? Why is shame and humiliation such a good fraud deterrent? The secrets are amply detailed in lead article of the newest issue of the Journal of Insurance Fraud in America, or JIFA for short.
JIFA is the Coalition’s leadership quarterly. It’s a compelling read ― a no-holds arena with articles by many of the best minds in the anti-fraud business. JIFA doesn’t aim to please. It aims to enlighten and sharpen our grasp of trends and issues that affect the fraud fight for better or worse.
There’s better and worse for state fraud bureaus, another article reveals. Some budgets are taking their lumps. Many of these agencies must work harder to stay on top of schemes. But fraud bureaus still are churning out solid fraud-busting numbers. This shows a great deal of resilience despite dollar-squeezing pressure ― true pros at work.
Many forms of fraud still appear on the rise, these agencies also told the Coalition in a survey. Agent scams such as stealing client premiums are especially big, the fraud bureaus say. Fake health plans also may still be spreading, creating more victims who must pay hospital bills from their own pockets.
One possible upshot: The stagnant economy still may be hard at work, creating more fraud cheaters and victims.
In another trend…staged-crash gangs and medical mills increasingly are trying to recruit real crash victims into fake-injury scams. Recruiters are scarfing police crash reports and hounding often-bewildered crash victims to get treatment at shady clinics.
But fraud fighters are firing back with clever legislation in the latest rounds of cat-and-mouse, JIFA reveals. Even so, some very surprising opponents are trying to keep crash reports flowing despite their high value to swindlers.
There’s a lot of engaging reading in JIFA…because there’s a lot of fraud.
About the author: James Quiggle is director of communications for the Coalition Against Insurance Fraud.
Let’s Put a Lid on Shady Roofers
Hurricane season is fast approaching and we’re in the midst of tornado season. Let’s also remember that with warmer weather we tend to have other storms that could wreck havoc on homes and properties.
Homeowners and property owners can be victimized by these storms yet a second time by shady contractors. These storm chasers tend to be unlicensed and incompetent. They perform shoddy repairs, disappear before finishing the job, and sometimes even causing more damage to a home to inflate their fees.
States, insurers and consumer groups are clamoring to crack down on these storm chasers. And, recent legislative action shows that growing numbers of state lawmakers are getting the message.
States vary widely in how they regulate and license contractors such as roofers to repair homes. But even the most stringent rules may not protect a homeowner from being required to pay for substandard repair, because a contract is a contract. Unless state laws explicitly allow homeowners to rescind or cancel a contract, homeowners may be on the hook for the payment whether the insurer is willing to pay for the repair or denies the claim.
So, how do we help victimized homeowners whose property is damaged by a tornado, hurricane or hail storm?
First, let’s agree that most contractors are upright and honest. But we need partnerships among organizations to get the message out to consumers about the bad apples. And those messages must get out before storms hit. It’s basic consumer advice: how to recognize the warning signs of a shady contractor, and how to properly vet the contractor before signing on the dotted line.
After a storm hits, homeowners are in shock and want to put their live back to normal as quickly as possible. They can be vulnerable a shady contractors who seem helpful and decent, and offer a safe lifeline during a highly stressful time. It’s usually too late to try to educate consumers in these chaotic conditions.
These homeowners might easily buy into a shady contractor’s sales pitch without checking whether he’s properly licensed or has a history of complaints. The contractor may not even have a business card or company name.
So consumer groups, insurers, state insurance regulators, attorneys general, Better Business Bureaus and other viable groups must work on PR campaigns with local and state media to get a message out early and often before storms hit.
State insurance regulators, AGs and insurance organizations in numerous states do send out consumer alerts. Facebook, Twitter and other social outlets also are deployed. But, that is only part of our job.
We also need enact state laws that protect consumers from dishonest contractors.
More lawmakers have decided this is the year to send the message that the crooks must go.
The Coalition has identified several states that have bills, with varying degrees of promise. Most measures have two things in common: First, consumers can cancel a signed contract if their insurer denies the claim for fraud or unneeded repairs. Second, contracts also must clearly display the cancelation right. Here’s the action so far:
- Indiana, Nebraska, South Dakota and Kentucky have enacted laws;
- An Iowa bill has passed both chambers. Consumers could cancel a contract if the contractor uses inducements to convince the consumer to sign, or acts as an intermediary with the consumer’s insurer (i.e., illegally acting as an adjuster). The latest version also would protect the AG’s right to prosecute shady contractors,
- Tennessee is debating bills in both chambers;
- A Colorado bill has passed the Senate and awaits action in the House.
We applaud states that have enacted laws, and encourage legislators in states with active bills to pass them as soon as possible. Consumers shouldn’t pay a potentially terrible price for a contract that a shady contractor tricked them into signing.
For consumers, this is protection. For insurers, this is good business sense.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.
The novel idea of a non-addictive painkiller
More than 600 people gathered in Orlando last week for an inaugural summit on prescription drug abuse. There were high-level government officials (including the surgeon general, congressmen and administration officials). There also were lots of medical types with impressive credentials, a bevy of vendors selling anti-drug wares, and a few stoic parents who had lost sons and daughters to drug overdoses.
Only a couple of insurers attended, even though the general consensus of attendees was that much of the illicit use of painkillers is insurer-paid.
What was evident from the week-long conference is that prescription drug abuse and fraud in the U.S. is a huge, complex problem with many facets. And the problem likely is still growing. It touches the urban core, suburban bedroom communities and rural America. Drug diversion is an equal opportunity scam perpetrated by druggies, honor society high schoolers, soccer moms, celebrities, physicians, pharmacists, and increasingly, organized criminal enterprises. The power of addiction plus high profit makes this incarnation of drug abuse perhaps the most sweeping ever.
I was asked to speak about the high cost of drug diversion — specifically painkillers — on employers and insurers. There’s a strong need for more anti-fraud measures, including prescription monitoring programs (PMPs) in states and general awareness all around, I noted. Organizations attending the conference also must get more involved in the political process to enact stronger anti-drug diversion legislation.
Then I threw out perhaps a not-novel and even naive idea: The government, medical community and insurance industry should launch a Manhattan Project to develop an effective non-addictive painkiller. It would take the profit motive out of drug diversion — yet still help those who are in pain obtain relief. Plus it might save a lot of lives.
I asked the audience, which numbered in the hundreds, if anyone was working on such an effort. One person raised her hand. Others shrugged. Perhaps it’s not such a naive idea after all.
6 mobile apps with fraud-fighting potential
A suspect vehicle suddenly swoops in front of you and jams on the brakes, causing a rear-end collision. Funny, you were going slow, and that car appeared out of nowhere. You think you’re being scammed, but what can you do? Having a smartphone may help. Not only do these devices make calls, track to-do lists, and help you find the nearest restaurant, a few recent apps may even help fight fraud. Some have been created for other purposes, but have fraud-fighting potential. Here we’ve chosen a few of our favorites.
1. iCarBlackBox
What it is: This app turns your phone into a virtual black box. Using GPS, video, audio, and an impact sensor, iCar Black Box can record all the details of a crash as it takes place. Using the phoneʼs accelerometer, the app can tell when thereʼs been a sudden stop, and will verbally ask the user if they wish to save the footage of the incident. It only saves footage when instructed to do so, thereby conserving space. Users can check the speed of the moving vehicle, date and time, location, road conditions and more through audio/video.
Why it’s a fraud-buster: If you can show what really happened, you might have a better case of proving fraud.details of a crash as it takes place. Using the phone’s accelerometer, the app can tell when there’s been a sudden stop, and will verbally ask the user if they wish to save the footage of the incident. It only saves footage when instructed to do so, thereby conserving space. Users can check the speed of the moving vehicle, date and time, location, road conditions and more through audio/video.
2. iWrecked
What it is: iWrecked allows users to log all the details of a crash, including unlimited pictures, other driver’s insurance information, police information, even witness data and weather conditions. It allows users to create crash diagrams. The app can then generate a pdf report detailing the accident, and send directly from the app to the user’s insurance company.
Why it’s a fraud-buster: Knowledge is power. The app’s reminder to get witnesses’ contact info, capture photos, and take down all the details of a crash may help provide a more comprehensive report.
What it is: Reporting fraud just got way easier. This app allows users to anonymously report fraud from the convenience of their phones, on the go. Users can have a chat-style conversation to explain their circumstances, or send an anonymous email-like message including pictures and descriptions.
Why it’s a fraud-buster: Convenience is key, and users are can now snap pictures on their phones, or discuss a fraud tip without making a sound.
4. DBPR Mobile
What it is: Floridians who are approached by shady contractors after storms now have an instant licensing check on their phone. Consumers can verify whether businesses and professionals are licensed, searching by name or license number.
Why it’s a fraud-buster: It’s the first step in determining who to work with. Consumers are still advised to contact their insurer to get referrals on trusted contractors, but turning to this app can give an instant read on what contractors are being honest about licensing.
5. Oklahoma Insurance Department app
What it is: An Android-based app, this allows users to carry important insurance information with them. Consumers can report fraud, search for seasonal insurance topics, check licensing, nominate an insurance professional of the month, and contact the department directly.
Why it’s a fraud-buster: Users can check key fraud info, and can report fraud if they catch it.
6. Scam Detector
What it is: An app that allows users to verify telltale signs of scams to protect themselves from being defrauded. Detailing more than 525 scams, organized by industry, it’s updated in real time. The search function also lets users browse based on their circumstances. Auto scams, internet scams, financial scams, property scams and more.
Why it’s a fraud-buster: Knowing about a fraud can stop the crime in its tracks, and allow users to take action.
Are there any similar apps you are using that should be on this list?
Let us know in the comments.
The science of saying ‘no’ to fraud
There’s a question about whether well-aimed doses of public outreach can persuade people that insurance fraud is a dead-end street.
We have little to go on, because almost nobody applies true science. First you need enough juice ― the money to launch a steady blitz of TV ads, radio spots and other tactics. Then you test your messages and commercials before they’re launched. Will people think the spots effectively gnaw at your sense of right and wrong? Next you measure if people’s attitudes have shifted after the campaign is over. Researchers swing back into action, polling consumers about the ads.
It’s a tall order, but that’s how you know if you moved the needle.
One state agency uses just this science. The promising result: Public outreach can make people decide they don’t want to commit fraud. Look to the Pennsylvania Insurance Fraud Prevention Agency (IFPA) for a glimpse at what’s possible.
IFPA recently finished an 18-month outreach campaign. The effort was aimed at everyday people who commit smalltime scams that add up to bigtime dollars. The commercials avoided bully pulpits and preaching against fraud. They took a subtle but hard-nosed approach called Know the Risks ― Know the Penalties. Several spots simply showed average people who did a dumb thing, got caught and paid a price they came to regret.
One woman, for example, lost a job she was applying for. The spot was called Permanent Record. The effort built on an earlier campaign. In one emotional spot, an angry kid called his busted father a liar.
The agency carefully measured the latest campaign results. More people realized fraud was a felony and one of the most serious crimes. So far so good.
But another telling stat showed up. People who said they’d likely commit fraud decreased two percent. That seems like a small number, but generalize that sample to the whole state: 160,000 Pennsylvanians aren’t likely to inflate or invent a claim.
How many millions of insurance dollars not stolen could that add up to? How many lives and families could be spared wreckage and ruin because of one stupid act? IFPA’s campaigns, cumulatively, are building results. Most state agencies can’t afford the kind of money IFPA spends, nor do results in one state necessarily speak for everyone else. But there’s some promise, here.
Public outreach, if done right, could be a profitable investment and steer people down the right path of life. Insurers and government budget directors, take note.
Promising steps in fighting NY no-fault fraud
The last several weeks have seen palpable progress in efforts to strengthen New York’s auto-insurance fraud laws.
First, with a push from Gov. Cuomo, a new regulation is being finalized to give the Department of Financial Services the authority to boot sleazy medical providers from the no-fault system if they’re convicted of auto-insurance crimes. The reg implements an earlier law giving the department this authority.
Then the state Senate gave legislative efforts a trifecta. That chamber passed three bills that have been on the docket for several years.
First is the so-called Alice Ross Law. The proposal would make it a specific crime to stage auto crashes. The bill memorializes Alice, a grandmother who was killed in Queens when she was targeted by a botched staged crash.
Second is a bill making it a crime to be a runner (or recruiter) for staged-crash rings. Hiring a runner to solicit motorists for fake crash-injury claims against auto insurers also would be a specific crime.
Third is a bill allowing insurers to rescind an auto policy if the premium check bounces. Crash rings often buy a policy with checks from empty bank accounts, then quickly stage crashes before the bounced check has time to return to the auto insurer.
These bills all target staged-crash rings that are prevalent throughout the Empire State. The proposed decertifying reg and three bills create a strong, coordinated effort to take down these crime rings that are raising premiums for honest New Yorkers.
The Coalition strongly supports these measures. “Providers who are ripping off the auto insurance system tend to make their living from the system. So, decertification will have a solid effect on fighting fraud in New York,” the Coalition wrote in a Letter to the Editor published in the Legislative Gazette this week.
We need the governor and superintendent of financial services to get four-square behind these bills and work to push them through the Assembly this year. That will be a great coup if these three bills become law after several years of persistent, sometimes frustrating but always committed efforts by the anti-fraud community.
Deja Vu in the Sunshine State
Some PIP medical clinics in Florida aren’t waiting for the governor to sign the reform bill the legislature enacted two weeks ago. They see the writing on the wall and are putting their clinics up for sale.
The for-sale signs likely have been spurred by one of the most effective provisions of the new law — a limit on the $10,000 per-patient slush fund chiropractors and attorneys have used to bilk the PIP system. Now, only $2,500 of the $10,000 benefit can be used for chiropractic care unless the patient has a specific referral from a physician. That should put a huge dent in the profits of PIP mills that over-treat or don’t treat at all. Yet, it allows for a patient who is legitimately injured and in need of chiropractic care to receive adequate treatment.
The final bill that emerged from starkly different versions offered by the Florida House and Senate seems like a good compromise. Insurers didn’t get all they wanted, such as a requirement that claimants seek treatment exclusively from hospital emergency rooms or caps on attorney fees. Consumer groups and plaintiff attorneys pushed a provision to require a 25-percent reduction in PIP premiums. But that didn’t make into the final bill either.
What did make it in the final bill — tighter clinic licensing, fraud warnings on clinic applications, ability for insurers to conduct EUOs and expanded crash reports — should help to curb fraud and put downward pressure on auto premiums. It’s also interesting that these same provisions all were included in a bill last year that was initiated by the broad-based coalition Sunshine Alliance to Erase Fraud (SAEF). But that initiative ultimately was squeezed out by a more-aggressive proposal insurers championed to cap attorney fees, which the trial bar killed in the last week of the 2011 session.
The failure in 2011 left many pessimistic about chances for this year. However, the momentum from 2011 carried over. Legislators faced more pressure to act this time around, plus the governor wisely chose to make auto reform a signature initiative. Worthwhile legislation rarely gets enacted in a single legislative session.
So while the players in the legislative arena — insurers, consumer leaders, lawyers, docs and law enforcement — all started from different positions in 2012, they basically ended up in the same place from 2011. And that’s a good path. Everyone should feel good that the legislative process worked. Well, perhaps not everyone. Legitimate clinic owners and workers who relied exclusively on PIP business have to shift to a new business model. And as for the shady clinics, hopefully they are looking for a totally new line of work.
Fraud, Inc.
The recent bust of 36 alleged fraud members in New York has been called the largest no-fault fraud in history by prosecutors. In recent weeks, record-breaking fraud rings have been dismantled in several key states across the country.
What is alarming is the growing size of these alleged operations. The ambulance-chasing crash ring in New York is charged with seeking $279 million. Texas doctor Jacques Roy is charged with orchestrating a $375-million operation. In February, an assistant administrator of another hospital pled guilty to cooperating in a $116 million scheme.
These cases are of an entirely different nature from what was common immediately after the economic downturn. Namely, individual consumers driven by financial stress making bad decisions to torch a car to use insurance money as a bailout.
More of the cases we are seeing of late involve fraud as a way of life. Masterminded rings, run much like businesses, are seeking to bilk insurers and consumers as large corporate entities.
The NICB reports a 19-percent rise in questionable claims since 2009. How much money are each of these questionable claims raking in? The Coalition estimates that fraud costs $80 billion a year. If insurance fraud was a company, it would rank number 25 among the Fortune 500, above Apple, Google, Costco, and Pfizer. Either fraud is becoming more corporatized, or investigators are busting large rings that have been developing these tactics for some time now.
Regardless, insurance fraud can be a lucrative business, as these recent cases show… And it’s a business that does harm, especially to law-abiding citizens. Consumers must learn the signs of fraud to protect themselves from getting fleeced on the road and at home.
The author is communications specialist for the Coalition Against Insurance Fraud.
