Humble and brazen health claims

$100,000 for ear wax removal? $46,000 to remove a bunion? Those are some of the outrageous charges cited this week by a judge who awarded Aetna $51.4 million from a Houston surgical hospital.

In a two-year period, Humble Surgical Hospital in Houston, Tex. billed the insurer more than $68 million. Humble billings these are not.

The five-bed surgical center, created by 10 doctors in 2010, charged patients in-network rates but billed the insurer at out-of-network rates. Some bills were as high as ten times what other hospitals charge.

Why did the insurer paid $41 million before challenging Humble’s bills? Aetna isn’t known for throwing money at medical providers, and it sponsors a good SIU team. (Full disclosure: Aetna provides health insurance for Coalition staff.)

Perhaps part of the problem is prompt-pay laws in many states that encourage insurers to “pay and chase” suspect claims. Some states grant delays in paying claims when fraud is suspected. Others do not.

The Humble claims spanned 2010 to 2012. Since then, new technologies such as predictive modeling have been developed to help insurers detect claim anomalies quicker and better. Another new development is the sharing of suspect claims information through the Healthcare Fraud Prevention Partnership.

As someone who pays a hefty monthly premium for health insurance, I hope Aetna and other health insurers use all the anti-fraud tools at their disposal to keep such brazen claims practices in check.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Unwise Wise Guys purloin insurance money?

Reputed mobsters from the Luchese, Bonnano and Genovese crime families were busted up and down the East Coast last week.

The epic lasso roped nearly 50 suspected hoods, including high-ranking capos who called the shots.

Extortion, gambling, loansharking, muggings and other standard Mafia schemes were alleged in the federal indictments.

Unwise wiseguys?

What stood out was health-insurance fraud. The gangsters allegedly convinced docs to write “unnecessary and excessive” prescriptions for expensive compound creams. Allied docs overbilled insurers and received kickbacks, the feds say.

Street hoods turning to respectable white-collar crime?

“Many of the Italian mafia families across the nation have sought to diversify their interests into more high-tech, white-collar crimes for a while now, dating back, really, to the 1980s,” mob expert Scott Burnstein tells Vice. “Smart mobsters in this day and age no longer just line their pockets with traditional rackets (gambling, loansharking, extortion) — and some try to stay away all together. When you compare prison sentences, it makes the most sense.”

Organized crime sinking its grubby paws into insurance fraud is a known phenomenon. The Coalition has tracked the trend for years. Complex rings, and ethnic gangs such as Russians and Armenians, have gotten rich from staged crashes, inflated health-insurance claims, medical ID theft and other insurance rackets.

The latest busts add new insights into how the Mafia itself may be larding family ledgers with insurance crime.

Drug dealers and other street types are branching into insurance crime. It’s safer, more-profitable and less likely to earn you a bullet to the head in a dark alley, they reason. Same often holds true for larger crime rings.

All this is hardly surprising. Corporations inevitably follow a good money-making idea. They add efficiencies and scale, thus magnifying profits. This is as true of insurance fraud as honest entrepreneurial ventures such as coffee, copier and hamburger franchises.

There always will be a generous niche for mom-and-pop fraudsters — average consumers who inflate claims for “lost” engagement rings or “stolen” sound systems.

It’s the corporate fraud players who may be the most dangerous. In addition to size and organization, many complex rings could have resources to bring in tech-savvy players who can hack and breach insurers.

Sensor-driven devices such as telematics also may be hackable, thus allowing hi-tech crash rings to alter data and seemingly legitimize setup car wrecks. Shifting alliances among fraud rings with differing skill sets likely will surface. Align medical providers with breach techies and the theft potential is great.

The Mafia may not be the unstoppable octopus of yore. Yet the upcoming Mafia trials still will give fraud fighters useful field intel on the threat they’re up against. They’d be smart to watch closely and mine for actionable insights. Whether the Mafia is a bit fraud player or serious actor, they’re another reminder that size does matter with insurance fraud.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Limiting Medicare billing may weed out cheaters

What to make of the federal government extending its moratorium on allowing new medical providers to bill Medicare and Medicaid in six states?

Does CMS still need to get a handle on pre-screening providers before allowing them to bill?

Or is fraud is so rampant in those areas that CMS must weed out existing bad actors before allowing new providers to enter?

Probably both.

Shutting down enrollment is a drastic move that can hurt honest providers. It also can limit patient access to needed care. But it’s a necessary step for the federal government to  effectively manage fraud in its programs.

The areas affected by the extension include home-healthcare and medical transport — two that are rife with fraud.

Congress gave CMS the power to shut down enrollments a few years ago, but CMS hesitated at first. Nudged by Congress, CMS started restricting enrollments in limited areas where fraud was most out of control.

The enrollments seem to be a qualified success, but it will take a few years to fully know if provider fraud has started moving downward.

In the meantime, CMS is taking a smart approach to using its power to restrict enrollments. Moratoria are targeted. The latest extensions, for example, impose home-health enrollment limits in Florida on just three of the worst counties. Plus, CMS now allows exceptions to the moratoria if providers pass heightened screening.

Taking action before crooked providers can bill is the best answer to the old “pay-and-chase” model. It should also deter many would-be cheaters, especially organized fraud rings looking to soak federal programs.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

$1 billion (in savings) or bust

When the ground-breaking anti-fraud partnership between the federal government and the private sector was launched in 2012, there were grand expectations that they could jointly combat fraud much more forcefully that going it alone.

More than 60 organizations have teamed up to share strategy and exchange data. They include federal and state agencies, health plans and p-c insurers. Billions of bits of information have been pooled through a trusted third party.The results are encouraging.More than $260 million has been been saved in recoveries and fraudulent claims not paid.

The HFPP executive board met two weeks ago. It set a goal to expand savings to $1 billion by this time next year. It’s an ambitious goal, yet achievable given the early success of this collaborative effort.

The potential success in future years could far surpass $1 billion as more data is shared and more partners sign up., And it should, seeing that healthcare fraud totals tens of billions of stolen dollars each year in the U.S..

The ultimate goal is to get so effective in combating healthcare scams that fraudsters will view the risks too high to even try. We’re a long way from that day, but collaborative efforts and advanced technology offer the best chance of getting us there.

About the author: Dennis is executive director of the Coalition Against Insurance Fraud and serves as co-chair of the Healthcare Fraud Prevention Partnership. 

Surprise medical bills

A patient goes to a medical facility for a surgery. Maybe a hospital or outpatient clinic. He checks to ensure the facility is part of his health-insurance network, and that it will cover his bills.

Then after the surgery … a surprise: A whopping bill from an out-of-network anesthesiologist who doesn’t take the patient’s insurance. The stunned patient has to pay several thousand dollars from his own pocket.

The facility is in-network, the primary medical provider is in-network. Then a consulting provider is brought in to treat the patient, and that person is out-of-network.

Many such charges could be unfair and abusive. Some could be fraudulent.

Uninsured billings are occurring more often. Consumers and insurers both are surprised. Yet the finger of public opinion typically points at insurers for supposedly having too few providers the patient could turn to. Or for simply not paying bills in general.

One insurer has sued hospitals and other facilities, alleging fraudulent out-of-network billing and kickbacks. Fraudsters may have discovered a large loophole in the healthcare billing system.

More states are stepping up to the plate and working to control this practice.

At least a dozen states restrict surprise billing. They should go farther.

New York, for example, requires insurers and health facilities to notify patients of expected out-of-network billings. New York also has a dispute- resolution procedure requiring providers to bill only for in-network cost sharing.

The National Conference of Insurance Legislators is developing a model bill based on New York’s law. NCOIL is working to complete the model in 2016.

California requires contracts between the network providers and insurers to disclose up-front to patients out-of-network providers who may provide care — and the estimated cost of that uninsured care.

Many health plans also are doing away with annual caps for policyholders’ out-of-network costs, leaving consumers facing unlimited financial exposure.

Patients shouldn’t be forced to pay high, surprise bills from in-network facilities. And insurers should be protected from billing and kickback scams disguised as routine out-of-network billings. There’s nothing routine about these charges.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Medicare strike force a high-value investment

Last week’s busts of 243 people suspected of collective mastodon Medicare ripoffs was good news.

The suspects pilfered $712 million of your taxpayer dollars with a cavalcade of phony claims for medical treatments and equipment such as power wheelchairs, the feds charged at a news conference in Washington.

The accused fraudsters were a disparate bunch, hailing from 17 hotspot areas beset with Medicare thievery. They were snagged by a strike force specially set up for such jobs.

The Affordable Care Act added $350 million to chase down Medicare and Medicaid thieves. The feds hired more prosecutors and expanded the strike force. Last week’s busts were just the latest high-visibility results in a long string of successes.

Yet vast amounts of Medicare-Medicaid fraud likely remain to be discovered and broken up. Arrests and convictions for eight-figure theft plots seem in endless supply. Just one suspect — Dr. Jacques Roy — allegedly tried to steal $375 million in dodgy home-healthcare claims in Texas. That case helped impel the feds to halt home-health payments in the Dallas and Houston areas for six months.

HHS says its anti-fraud investigations recovered nearly $8 for every $1 invested over the last three years. Such returns would be the envy of the for-profit sector. They also should remind us that the strike force — and Medicare-Medicaid fraud fighting in general — are high-value investments during a time of federal budget austerity.

If the national goal is more rational federal budget spending, it’s hard to imagine much better use of federal dollars. The fraud fight will be better served if the day comes when funding of strike-force efforts expands to where busts like last week’s become routine news instead of headline grabbers.

 About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Let’s yank licenses of crooked docs

The Coalition has a longstanding position that medical providers who earn most of their income from insurance should have their state license yanked or suspended for committing insurance fraud. That’s a key provision of our model insurance fraud law.

A license is a privilege the state bestows, and not a right.

Why should states act so decisively? Because medical boards rarely act on their own. We surveyed medical boards several years ago and very few actively punished providers who commit insurance fraud. Some only discipline providers for violating their medicine practice, and that insurance fraud isn’t constitute such a violation.

There are enough honest docs practicing ethically that we can afford to get rid of crooks.

Medicare can now impose stiff sanctions. Docs who bilk Medicare can be kicked out of the system. They still can practice but can’t receive Medicare reimbursements. Many cheaters who specialize in fleecing Medicare thus are put out of business.

Minnesota is debating a similar move: Medical providers convicted of insurance fraud can be denied payments by the state’s auto-insurance system under a bill being considered in the statehouse.

The cheaters still can keep their medical license. They’re just out of the no-fault business. And like Medicare swindlers, the no-fault fraud specialists face potential ruin if their main source of income is shut off.

New York started booting dishonest medical providers from the state’s no-fault system several years ago. The state is showing success; more than 18 providers have been removed.

The Coalition holds up New York as a model that other no-fault states should emulate.

Crooked medical providers risk their patients’ health and wellbeing, and steal brazenly from insurers. They shouldn’t be tolerated. No-fault states should follow New York’s lead and weed out crooked docs.

The Coalition strongly believes that dishonest providers who abuse their state license to commit insurance fraud should face strict license review to determine if their license should be suspended or permanently revoked.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

“Out-of-network” scams hitting insurers and consumer wallets

Leave it to creative docs and hospital administrators to drum up new and devious schemes to sink their fingers in your wallet.

out of network imageThe latest scam cropping up across the U.S. is leaving patients and their insurers aghast at outrageous medical bills. The scheme involves the use of “out-of-network” medical providers who basically can charge whatever they damn well please. They aren’t constrained by negotiated fees between in-network providers and insurers.

The scam works like this: You go in for a treatment or surgery — or maybe go to the emergency room after an accident or heart attack. You’re asked to sign the usual paperwork. Most people don’t read or understand much of the fine print that says you’re responsible for all charges — even those by out-of-network providers.

You get the treatment, get well, pay your deductible and bam! You get a bill for thousands or tens of thousands from some doctor you didn’t even know had worked on you.

That doctor might’ve been brought in by your doctor as a “consultant” to watch your operation or review your records.

The New York Times blew the cover on this scam last year. The news outlet found in-network docs who were hiring high-priced physician-consultants out of network and taking kickbacks from them. Since then, similar stories have been appearing across the country.

Legislation has been introduced in Florida to outlaw the practice and bring out-of-network fees more in line with in-network charges. The sponsors of SB516/HB681 likely have a uphill battle because the medical lobby in the state is powerful. But let’s hope the bill sponsors succeed and other states follow their lead to protect consumers from this sleazy practice.

In the meantime, be sure to carefully read all medical paperwork and question the use of out-of-network providers brought in supposedly on your behalf. It could save you a ton of money.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Give health insurers a break from loss ratios

A columnist for the Los Angeles Times recently skewered UnitedHealth for what he says was aiding and abetting a $43-million medical scam involving bogus weight-loss surgeries.

The health plan failed to scrutinize bad claims, the columnist says, until long after money was out the door.

Whether or not the harsh criticism is justified, we’ll leave to others to debate. But if UnitedHealth and others are not investing in expanded anti-fraud efforts, there’s likely a good reason:

Federal law discourages it.

One of the least publicized provisions of the Affordable Care Act is intended to make health insurance more affordable. Health reform governs the percentage of premiums health plans can dedicate to non-claims business expenses, such as marketing, salaries, administration, profit and yes — anti-fraud activities.

The so-called Medical Loss Ratio requires health plans to spend 80 to 85 percent of premiums they collect on claims.

In essence, anti-fraud expenses must be paid out of profit. That’s enough to discourage most health-insurance companies from growing their anti-fraud programs.

In some instances where insurer expenses are out of balance, paying suspect claims could boost profits — or at least not affect them. Now most health insurers wouldn’t intentionally pay suspect claims, but bad claims can be harder to detect when the anti-fraud efforts haven’t grown commensurate with the growth in policies and claims.

And thanks to Obamacare, policies and claims are growing. But anti-fraud efforts are not.

The Medical Loss Ratio is a good idea in theory. It prevents insurers from spending all the new-found premium money on frivolous expenses, such as corporate bonuses.

But good legislation also has unintended consequences — such as discouraging investment in fraud.

If fraud is allowed to increase — such as the $43 million that reportedly was spent on unnecessary and phantom stomach lap-band surgery — then upward pressure will continue on premiums, and everyone loses — except the fraudsters.

The time has come to rethink how the MLR is calculated.

About the authors: Dennis Jay is executive director of the Coalition Against Insurance Fraud. Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

More eyeballs can probe for Medicare Plan D cheaters

Feel the fresh breeze? That’s from the Medicare database opening up and being exposed to public scrutiny.

A digital dumpster dive is in fast motion. We’re seeing a rush to dig into the federal government’s massive repository of medical provider data ever since Medicare announced it would make its provider database publicly available earlier this month.

A new era of transparency and accountability, the likes of which may have never been seen, is being opened up with surprising speed. Two more events happened this week to notch up the heat on suspect medical provides yet another notch.

First, CMS says it’s opening up non-encrypted Plan D data for easier outside scrutiny. That’s the prescription-drug arm of Medicare. CMS will expand access of unencrypted prescriber, plan and pharmacy identifiers to “researchers and other external entities.” Just who falls into these categories need clarifying, but the rub is that more people will gain more insights on docs who are spooning out suspiciously large quantities of prescriptions.

The latest move affects a large medical enterprise. Part D covers 37.5 million seniors and disabled patients. It pays for roughly 1 of every four prescriptions dolled out in the U.S., and costs taxpayers $62 billion in 2012, the journalist watchdog ProPublica says.

Then a second event happened just a week ago. ProPublica announced a new dive of its own into Medicare’s main database. More than 1,800 docs and other providers billed Medicare for the most expensive types of office visits at least 90 percent of the time in 2012, says ProPublica.

A Michigan doc allegedly charged the most complex and expensive office visits for virtually all of his 201 Medicare patients that year. He billed for an average of eight visits per patient.

Reporters around the U.S. have been prying open the database and writing about high-billing providers nationally or their regional circulation areas ever since Medicare’s original rule went public in early April. We welcome the added scrutiny that the Plan D database opening will bring.

The almost-giddy rush of exposing possible wrongdoing is all well and good. It’s a fresh news story, a new chance to make headlines. Let’s hope this is more than just another news cycle that disappears as soon as the next big news story rumbles into town.

Journalists and watchdogs will be challenged to keep the story alive, to keep mining Medicare for fresh insights that can expose and help weed out the dishonest actors who are gouging taxpayers. Consumers also need to know how their tax dollars are being spent.

And as I wrote in this space earlier, auto and homeowner insurers should dig into the data, including Plan D prescriptions. The same docs who are bilking Medicare may be milking these insurers as well. Insurers of all stripes might find useful fraud-related insights about specific docs and larger fraud trends that affect them.

So let’s work to keep this story alive and visible for a long time to come. And encourage insurers from public and private sectors to share findings that will increase the squeeze on cheating providers.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.