Fraud fight will continue beyond SCOTUS

fraudoscopeTomorrow’s Supreme Court decision on health care reform likely will have an effect far and wide across how we and generations that follow buy and use health insurance. But no matter how the Supremes rule — whether they uphold the law, toss it completely or something in between — there’s one aspect of health care that likely won’t change much, and that’s the enhanced levels of fraud fighting.

The Affordable Care Act has had a positive impact on anti-fraud efforts in the private and public sectors. And that’s not just because the law contains a few good anti-fraud provisions. But mostly, the law thrusted health care fraud into the spotlight like never before. During the last two years, the focus by payers, law enforcement, legislators, regulators and regular citizens has been intense in understanding health care fraud schemes and applying new tools to effectively prevent, detect and prosecute fraud.

Additionally, collaboration between federal agencies has never been better — and even cooperation with private insurers and state agencies is gaining ground

Much of the good work that has been started by Medicare and other payers will continue no matter what because fraud is now deemed as one of the cost drivers of health care and consensus is  anti-fraud efforts must continue to help put downward pressure on rising costs. Simply put, there’s no turning back.

That said, there is a potential loss of momentum in some areas if health care reform is thrown out in its entirety because the law does contain some effective provisions, such as:

• allowing Medicare to pre-screen providers and ban those that likely are fraudulent,

• allowing Medicare to declare on moratorium on specific areas of providers and suppliers if fraud is found to get out of hand,

• ending the current “pay and chase” model by stopping payments to suspected fraudulent providers,

• requiring federal agencies to share claims data, and

• enhancing civil and criminal penalties for fraud.

CARTOON_dennisThe law also provides $350 million in new anti-fraud funds, but most of that has already been spent on enhanced technology such as predictive modeling and other analytics.

But still, many of these can and will continue either through regulation, administrative action or a new law, if need be. Combatting fraud is too important. There is no turning back.

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

N.J. fraud bill seems born to run

howard_bill_signing At the beginning of this week, I had the pleasure of testifying at a hearing on a comprehensive anti-fraud bill before the New Jersey Assembly’s insurance committee. It has been introduced for the past several years, so this wasn’t my first time supporting the measure in Trenton.

The three main provisions would:

  • Limit access to police crash reports for 30 days, except for parties to the crash. This will prevent undue badgering of crash victims to get bogus “injury treatment” at shady clinics;
  • Target auto rate evasion by setting penalties for New Jersey drivers who illicitly register their autos in other states with lower premiums; and
  • Expand the ability of insurers, law enforcement, the state AG and NICB to exchange case information.

Seems fairly straight-forward.

The intent is to benefit insurers and honest New Jersey residents by reigning in those who defraud insurers and fellow residents. That was the main message we supporters of the bill gave during our testimony.

But the state trial bar seemed to come from a totally different universe. The attorneys argued the bill is anti-consumer because it lacks consumer protections against insurers that, they contend, deny or delay paying fair claims.

The immunity/information exchange language is nearly identical to Maryland’s new law. No one spoke in opposition of the provision at the Annapolis hearing, or did any committee member raised doubts. Yet, just up the road in New Jersey, doubts were being raised.

One attorney even said with a straight face that restricting access to crash reports would stop attorneys from soliciting passengers. Duh. That’s exactly a key purpose of the provision.

But the former argument is the most troublesome. It inaccurately equates fraud with a good-faith claim dispute between an insurer and the insured. The Coalition has long argued that claim disputes are just that — disputes. They’re not fraud and should not be inaccurately evoked to oppose an anti-fraud bill. Insurers that low-ball claimants or unnecessarily delay payments should be dealt with surely and swiftly — and there are existing remedies to correct those actions.

I told that committee that the bill indeed is pro-consumer because it clearly targets cons that help raise premiums for honest consumers, and prevents some consumers from being victimized by fraud rings. I avoided the “bad-faith” argument, not wanting to connect that view with the legitimate need for greater exchange of case information to identify fraud.

The committee chair seems interested in getting a full consensus on a bill before taking it to the full Assembly. Even though the committee approved the bill, he urged the sponsor to work with the disparate groups to gain a consensus measure.

But is that even possible?

The trial bar clearly will confuse good-faith claim disputes and anti-fraud efforts. The anti-fraud community insists there should be no linkage because it only muddies the real issues at stake, and risks derailing a bill that is good for honest New Jersey residents.

So full consensus might be too deep and wide a chasm to cross. Then what?

CARTOON_howardSometimes a legislature simply has to let the majority decide on a floor vote. We shall see if that happens in New Jersey.

The bill makes sense and should be passed. Fraud fighters may need considerable effort despite its obvious benefits for all New Jersey consumers — except swindlers.

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

Note to world: Learn from U.S. mistakes

indiaStopwatchStep into your wayback machine. Set the dial to 1970 — a much simpler time when there were few insurance frauds and almost no organized rings bilking the healthcare system. Medicare and Medicaid were only five years old. Both programs had just begun to take off and enjoy growing enrollments.

Imagine back then if the federal government — and private insurers — had had the foresight to install anti-fraud measures in health insurance. Think about how many billions of dollars might’ve been saved.

Well, that’s exactly the position India finds itself in today. The country created a Medicaid-type program five years ago that’s now being implemented in many of its 28 states to provide in-patient coverage for millions of poor. The potential market for both the private and public health programs is huge in this developing economy that has grown rapidly in recent years. One state health plan says it already covers 60 million people.

With a population of 1.2 billion and a goal of broad healthcare coverage, it’s only a matter of time before crooks start focusing on this new revenue stream. With this potential nightmare scenario in mind, the World Bank last month hosted an anti-fraud conference for the managers of the state insurance programs. I was invited to keynote the event.

My mission was to help them learn from the mistakes made in the U.S. I shared horror stories about how fraud was allowed to get out of control, and implored them to set up programs early to prevent, detect and investigate fraud. Early and aggressive action should serve as a deterrent to help minimize fraud losses.

The U.S. experience seemed to make an impression. They were fascinated by a ABC News news clip about a raid of a fraudulent Medicare clinic that uncovered dozens of automatic weapons and little medical equipment.

As India and other developing countries continue to build insurance systems, the need for anti-fraud programs will become self-evident. The U.S. leads the world in insurance fraud. We have trained thousands of fraudsters from around the world how to exploit insurance systems. The least we can do is help other countries so they don’t suffer the same fate we’ve created for ourselves in the U.S.

Then perhaps we can look back in 10 or 20 years and see how we’ve finally gotten a handle on fraud in the U.S., and helped control this crime around the world.

India_Jay05-12

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

Stopping fraud with fun?

BLOG_viralvideoMost YouTube videographers dream of making videos that go viral. Advertisers strive to create spots that people remember and relate to.

In the anti-fraud world, the goal of advertising is to help consumers make more ethical decisions. A few successes attest to the viability of this endeavor. In a recent article in the Journal of Insurance Fraud in America, Ralph Burnham showed how advertising is key to prevention. Making people aware of fraud and its consequences led to a measured decline in fraud approval by some Pennsylvania consumers. In California, the District Attorney’s office in San Diego has found a direct link between anti-fraud outreach and decreasing workers comp fraud.

So advertising has had measured success in local markets, but what would it take to create a national campaign that sticks? A look at successful campaigns gives us some clues.

1. Get their attention. In this information-saturated era, the first challenge is for space. Creating a video that spreads by word of mouth is key. In online video, every second counts, an element of mystery can keep viewers watching through to the end.

2. Entertain. The difference between an ad that is spam, and one that gets shared by friends starts with entertainment.

3. Offer a new take on something personal. There are some things everyone can relate to. Father and sonsMothers and childrenunusual wedding proposals. What does insurance fraud have to do with normal citizens? We all pay for it. Our anti-fraud story could begin with tight finances.

4. Use Emotion. Try humor. Emotions guide many of our actions, joy, fear, hope, stress, excitement, inspiration. And humor? Pages and pages have been dedicated to to making people laugh. Some of the most-viewed YouTube videos just make people laugh. Can we present a serious topic with an element of humor and still have the desired impact?

Most ads that are broadcast on TV are posted on YouTube as well. Unlike TV ads that are in some way forced on viewers, ads on YouTube can be found by an audience that actually chooses to watch. So looking at what has been successful on YouTube can shed light on consumers’ interests.

Successful public service announcements, such as anti-drug campaigns or anti-smoking campaigns often deliver a serious message with shocking or memorable graphics. Though the point gets across, they seldom get shared or go viral as the more amusing ones do (Kony being one notable exception, successfully using emotion).

So we have a challenge in the fraud fight, if we are able to reach consumers to stop insurance fraud, how can we create a message everyone will want to watch and share?

CARTOON_jenny

About the author: Jennifer Tchinnosian is communications specialist for the Coalition Against Insurance Fraud.

Sick health plans sell junk coverage

howard_bill_signingImagine you go to the hospital for an urgently needed operation. But afterward you’re handed a $15,000 bill because your health policy refuses to pay up.

Or your child desperately needs a life-saving procedure, but you discover your health policy is useless.

Fake health policies are being peddled by unlicensed crooks around the U.S. The junk comes in several flavors. To simplify matters:

  • Totally worthless policy; and
  • Supposedly full benefit coverage that’s actually a stripped-down policy or a discount medical plan (which isn’t insurance).

The shysters typically create fake trade associations you must join (for a fee). This creates the illusion of discounted group coverage.

People are especially vulnerable in this lousy economy. More cash-strapped consumers are anxious to find lower health premiums, or any coverage if they’ve been laid off. Pushy telemarketers working in phone banks in boiler rooms are brazenly promising consumers full coverage, even though they’re dishonestly hawking junk.

Bogus plans ran amok in 2010. It was an epidemic. Dozens of crooked outfits prowled for victims. Tens of thousands of Americans bought useless policies, losing millions of dollars. Many people were on the hook for thousands of dollars in medical bills when their supposed health provider wouldn’t pay up.

Regulators and the feds resolutely shut down many plans. The Coalition also spotted the trend early on, and gained coast-to-coast news coverage alerting consumers to the epidemic.

Last weekend I did a quick Google search to see if we still have a problem. And guess what? We do.

Despite the solid progress, dodgy health plans are still ripping off consumers around the U.S. Here’s a partial list of actions by state regulators this year and 2011.

An outfit called National Better Living Association was shut down by Montana and Georgia. Kansas went after an agent who sold for United Health and Life Corporation. Connecticut hosed down the National Association of Business Leadership.

In Massachusetts, it was the National Alliance of Associations and Professional Benefit Consultants. Connecticut took on the National Association of Business Leadership. Illinois hunted down ReAssurance Health Insurance.

California nailed United States Contractors Trust. Michigan took on American Medical Life. Another fellow sold garbage insurance to trusting churches.

Now my dander is up. I’m going to dig further. I suspect there are more crooked operators trying to separate consumers from their money, even if it endangers their health or lives.

Do we still have an epidemic? That’s hard to tell, but we do have a problem.

How can consumers protect themselves from scammers? Here are several important tips. Visit the Coalition’s alert for the full story.

  • Back off, go slow and learn more about the plan before buying. Be especially wary of pushy telemarketers who try to sign you up right away. Some peddlers also will flat-out lie that you’re getting full coverage even though you aren’t.
  • Call your state insurance department to see if the plan is licensed in your state, or has a history of consumer complaints. Check out your local Better Business Bureau as well.
  • Insist on receiving the complete policy before buying. Have a trusted advisor review it. Walk away if the peddler resists sending the policy or brushes you off with an excuse such as, “Don’t worry. Everything you need to know is in the marketing literature.”
  • Be wary if the deal seems too good to be true: Low premiums, great benefits and easy signup without medical exams.
  • Don’t be fooled by that official-sounding association. Check its website. Does it only list a PO box for an address? Does it have a magazine, convention, schedule of events and other things a normal association has?
  • Call your insurance department if you suspect a con. Regulators welcome tips from consumers to help identify scammers.

When you get ill, the last thing you want is health coverage that’s sicker than you are.

 

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