Consortium Takes New Approach to Combat Healthcare Fraud

Healthcare fraud has been one of the hot topics when discussing solutions to the national healthcare crisis. According to the National Health Care Anti-Fraud Association (NHCAA), losses from health insurance fraud accounted for approximately 3 percent (or about $68 billion) of all healthcare expenditures in 2007. In addition, the National Insurance Crime Bureau (NICB) estimates that fraud annually accounts for the loss of about 10 percent of premiums paid by customers to insurers. This is why the NHCAA and the NICB are joining forces with the Coalition Against Insurance Fraud to aggressively pursue fraud perpetrators and minimize their affect on our healthcare system.

A New Partnership
Under the guise of the newly-formed Consortium to Combat Medical Fraud, these three organizations will come together for the first time to seek new ways to prevent healthcare fraud across the U.S. The consortium, which represents a landmark partnership between three different sections of the insurance system, will also work with the Federal Bureau of Investigation and the Department of Justice to not only heighten the detection and prevention of healthcare fraud, but also focus on punishing perpetrators.

In its early stages, the Consortium will engage in specific activities such as:

  • Joint educational programs designed to help property/casualty insurance and health insurance investigators learn varying techniques and strategies;
  • Cross-matching claims and other types of data used by property/casualty and health insurance companies to better detect fraudulent schemes as well as collaborating to build stronger cases against criminals;
  • Industry-wide research focused on gathering information across lines of insurance to better understand the current trends seen in insurance fraud.

The Consortium’s first study will focus on state medical boards to evaluate how well they are disciplining licensees who commit fraud. This is a clear indication that the Consortium is not going specifically after people that occasionally submit a bad bill, but rather organized fraud rings and other individuals that are constantly cutting corners in the financial reimbursement system. More specifically, the main targets will include organized criminal enterprises that stage auto accidents, surgical centers that perform unnecessary operations, and family physicians that bill for treatment not provided.

Employer Initiative
While the Consortium does not have any set guidelines for how employers can help reduce healthcare fraud, the NHCAA and other organizations do offer some guidelines. Here are a few things that employers can do to minimize healthcare fraud:

  • Make sure your insurance company or third-party administrator uses a system to help prevent fraud abuse.
  • Perform a healthcare audit for services to see if they actually took place.
  • Educate all employees so they understand their benefits plan and what to look for in comparing medical bills versus their actual treatment.
  • Remind employees to regularly review employee benefits records to check for discrepancies.
  • Explain to your employees that they should never provide strangers with any personal information relating to health insurance.
  • Make sure employees never sign blank insurance documents.
  • Implement an employee awareness campaign on healthcare fraud.

Employers should take an active approach in this process because healthcare fraud increases the cost of providing insurance benefits to employees and, in turn, increases the overall cost of doing business. For many Americans, the increased expense resulting from fraud could mean the difference between having quality health insurance or not. As long as healthcare costs continue to climb, the need to eliminate fraud will always be a priority – not just for the new Consortium – but for everyone involved in the U.S. healthcare system.

For more information, please visit the following links:

Official Joint Agency Announcement

New Consortium Created to Combat Medical Fraud (Congressional Quarterly Healthbeat)

Organizations Unite to Combat Fraud (Claims Magazine)

Can Employers Reduce Healthcare Fraud?


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    August 29, 2008

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