Mike McCallister speaking on panel

A public-private initiative to detect health-care fraud

Humana Chairman and CEO Mike McCallister and several other CEOs of health insurance companies joined Health and Human Services Secretary Kathleen Sebelius, U.S. Attorney General Eric Holder and Karen Ignagni of America’s Health Insurance Plans (AHIP) at the White House recently to announce the creation of the Fraud Prevention Partnership (FPP), a public-private partnership to crack down on health-care fraud.

“This partnership puts criminals on notice that we will find them and stop them before they steal health-care dollars,” Sebelius said. “We are working to stamp out these crimes and abuse in our health-care system.”

No one knows the exact cost of fraud, but everyone agrees it’s significant. The FBI’s most conservative estimate puts the cost at $80 billion a year. Others believe it to be much higher. For example, Louis Saccoccio of the National Health Care Anti-Fraud Association, last year estimated that fraudulent payments to Medicare alone have reached almost $50 billion a year.

And as AHIP’s Ignagni said, “The cost of fraud can far exceed what is paid for falsified claims. It can cause real harm to patients who are intentionally exposed to radiation, invasive surgeries and medications they do not need, or suffer the lasting consequences of receiving a fraudulent diagnosis.”

The initiative is being led by HHS and includes FBI participation. It is meant to bring together the resources and best practices of government and the private sectors. The plan is to pool claims data and look for suspicious billing patterns in Medicare, Medicaid and private insurance.

As one Obama administration official working on the partnership explained to The New York Times, “Seen separately, these billings could appear normal. “ But by looking at billings from across the health care system – public and private – it could become clear, for example, that a doctor is billing several private insurers and Medicare for a total of more than 24 hours’ worth of work in a day.”

“Most of the criminals who prey on the nation’s health-care system are equal opportunity thieves,” a former HHS official explained. “They defraud private health insurance as well as federal programs.”

Many health plans have special investigations units that look for fraud. Humana’s Special Investigations Unit, for example, is made up of 200 physicians, nurses and other investigative professionals who use advanced data analytics – including predictive modeling – to uncover problems and prevent inappropriate payment of claims.

The goal is always to detect fraud before claims are paid, rather than to “pay and chase.” In 2011, Humana’s Special Investigations Unit prevented $17 million in fraudulent prescription claims alone. One tool the group uses is the “333 report:” If claims show a member has gone to three or more prescribing doctors, filled prescriptions at three or more pharmacies, and received three or more prescriptions for controlled substances, they investigate to make sure the patient isn’t “doctor shopping” and that there was no wrong-doing on the part of doctors and pharmacies.

As McCallister said last week, stopping fraud “results in a more efficient and cost-effective health-care system.”

“Humana looks forward to working with the Partnership to further this goal,” he said, “and to reducing the cost of health care while improving health outcomes for all Americans.”

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