Using Fraud Detection Software to Review Medical Claims

MDs May be Slow HIT Adopters – CMS and Insurers are Not!

Staff WritersShadows

Did you know that Medicare and private health plans increasingly have been “mining” medical claims data for potential fraud – for some time now – and with the help of sophisticated computer technology? 

Yes, it seems true – and such IT may be needed more than ever in 2008!

How Much Fraud? 

Fraud accounts for an estimated 3% to 10% of the $2 trillion spent annually on healthcare in the U.S. Within the past few years, companies including Fair Isaac, IBM, ViPS and Ingenix, a subsidiary of UnitedHealth Group, have developed software that detects suspicious patterns in claims data.  

“Spider-Web” Technology

According to the CMS, their technique is called “spider-webbing. 

IOW: Find one common denominator and follow the thread. 

“Red flags” indicating possible fraud include medical providers charging more than peers; providers who administer more tests or procedures per patient than peers; providers who conduct medically “unlikely” procedures; providers who bill for more expensive procedures and equipment when there are cheaper options; and patients who travel long distances for treatment. 

Private Insurers to Follow CMS

For example, Aetna reported its fraud-detection software helped the insurer prevent more than $89 million in fraudulent reimbursements from being paid last year, compared with $15 million it was able to recover after fraudulent payments were already made.

Companies are able to save far more money by detecting fraud before claims are paid than recovering the money after the fact. 

Conclusion 

And so, what are your thoughts on this HIT initiative? Are the private insurance companies and CMS taking advantage of the slow HIT adoption of medical providers? Who is to blame, if anyone? 

Please comment: 

More info: www.HealthcareFinancials.com

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Original source: USA Today 11/07/06

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2 Responses

  1. Medicare Fraud Audits

    Did you know that the Centers for Medicare and Medicaid Services [CMS] will fight to preserve its audit programs? Why? Because they work!

    For example, over the last year, contractors collected $371.5 million in allegedly improper Medicare payments from medical providers in California, Florida and New York. And, CMS may soon be rolling the audit program to more than a dozen additional states.

    Of course, the programs have upset more than a few stakeholders, worried that contractors may be unfairly targeting legitimate claims to collect their 20 percent commission. They’re also furious that contractors get to collect the money immediately, then force hospitals to go through appeals if they want it back.

    Not only have hospitals complained bitterly, at least one federal legislator isn’t happy with the arrangement. Rep. Lois Capps (D-CA) has filed a bill calling for a one-year moratorium on the program.

    CMS, for its part, is retooling the program to address critics’ concerns. Perhaps most importantly, the agency is working on regulations that would allow providers to defer repayment of contested claims until the appeals process is completed. It will also require contractors to have a medical director on staff, limiting how far back auditors can delve into claims (three years), and barring audits of claims before Oct. 1, 2007.

    Whether these proposals will help keep the program alive is anyone’s guess; according to Fierce Healthcare.

    -Ann

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  2. HealthCare Fraud Prevention and Enforcement Efforts Recover Record $4 Billion

    U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and U.S. Associate Attorney General Thomas J. Perrelli today announced a new report showing that the government’s health care fraud prevention and enforcement efforts recovered more than $4 billion in taxpayer dollars in Fiscal Year (FY) 2010. This is the highest annual amount ever recovered from people who attempted to defraud seniors and taxpayers.

    Federal prosecutors opened 1,116 criminal healthcare fraud investigations as of the end of FY 2010, and filed criminal charges in 488 cases involving 931 defendants. A total of 726 defendants were convicted for health care fraud-related crimes during the year. In addition, HHS today announced new rules authorized by the Affordable Care Act that will help the department work proactively to prevent and fight fraud, waste and abuse in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

    Source: CMS [1/24/11]

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