Could health care reform passed earlier this year unwittingly discourage insurers from tackling fraud? That’s a question that crossed our minds recently when we saw regulations being crafted that will dictate the percentage of premiums insurers must pay out for medical care.
Under a section of the new law, health insurers must pay out at least 80 to 85 percent of premiums on “reimbursement for clinical services” and “activities that improve health care quality.”
The remainder can be used for such things as overhead, administrative costs, marketing — and combating fraud. For some insurers, the margin of that 20 to 25 percent of the premium dollar is rather slim. Costs will be shaved, and you can bet that anti-fraud activities won’t be spared
We argue that combating fraud speaks to health care quality because it helps to keep insurance affordable, thus more people receive coverage. And just as important, It is through fraud investigations that it is often found that medical providers are cutting corners on health services, including performing treatment and services that are medically unnecessary and harmful to the patient. Anti-fraud efforts often are efficient ways to quickly identify and remove bad doctors and clinics from providing health services, whereas regulatory and licensing remedies sometimes take years.
The National Association of Insurance Commissioners (NAIC) is working with the federal government to draft the regulations for this provision. The Coalition and the National Insurance Crime Bureau has recommended that anti-fraud programs should be included in the definition of activities that improve health care quality. This way, health insurers won’t be pressured in cutting back on their anti-fraud programs — activities that address some of the core issues of health care reform.