Healthcare Chronicles: Crime Doesn't Pay - It Gets Reimbursed
August 05, 2009
by Dr. Barry L. Johnson, DDS, CDC, FAGD
This report originally appeared in the July 2009 issue of DOTmed Business News
I have been in the health care industry for nearly forty years, 19 as a provider and the last 20 working with payors focused on coding, reimbursement and cost containment issues. About 12 years ago I helped found a company that assisted payors to prevent unnecessary and wasteful claims payments. We used our proprietary software and expert clinicians to identify unnecessary and excessive services and charges. Two years ago our company was acquired and I stayed on and continued as president of our organization, which was now a division of a large analytics company that manages risk across the three different industries of property and casualty, health care and mortgage. Today, our company examines millions of claims a week, looking for potentially fraudulent claims and providers and sometimes, even patients. By identifying outlier patterns and by establishing billed services not supported by documentation in medical records, we're able to combat part of the problem of health care fraud.
Health care fraud costs our society between $70 billion and $300 billion per year. The government is aware of the problem but evolutions in our government and social developments have shifted resources from one area of interest to another. At one point, substantial justice department resources were committed to creating and sustaining task forces to investigate and prosecute health care fraud. Then, 9/11 occurred and most of the investigative resources from those task forces were diverted to homeland security. Only during the past two years have we begun to see assets re-committed to these task forces.
To understand the extent of the problem, take this example from Florida. Recently an investigation done by the federal government showed that somewhere in the neighborhood of two-thirds of the DME vendors weren't providing the services stated in their reimbursement requests. Many of these organizations were storefront operations, generating false claims, using stolen lists of patient names, and providing no services or supplies to anyone.
One reason criminals can successfully file false reimbursement requests is because many claims are processed through auto adjudication. That means claims submitted from providers can be processed by a computer, a payment determined and check cut and mailed to the provider with no human oversight occurring during the process. This happens millions of times a day with billions of dollars paid and in many cases no human ever looked at any step in the process. We want to believe that computers can do everything and they are very effective at consistently applying rules, provided that they have been programmed correctly and the safeguards of editing systems and fraud prevention systems are implemented, updated regularly and fully operational and not by-passed unintentionally. The reality is that there are defects in logic, loopholes in some rules and gaps in the security, and if a provider finds some creative billing tactic that gets approved every time, even if it's not correct, he or she often continues to exploit the opportunity.
There are even courses that teach people how take advantage of the system. Although most doctors probably are following proper protocols, the small percentage that do not become increasingly aggressive and abusive. Sometimes it's not the providers, it's the billing office. Those bilking the system are also hurting their colleagues. Half the dollars spent on health care reimbursement is being provided by federal and state governments. That being said, when someone is taking advantage of the system and overcharging, it depletes the finances available, making it more difficult for those filing correctly to receive fair and adequate reimbursement.
Part of the problem is the fact that there's not much of a deterrent in place to prevent people from practicing health care fraud. Often, even when a fraudulent provider is identified, there is rarely a suspension of a license or other definitive legal action. Sometimes, individuals are put on probation, sometimes the problem is ignored entirely -particularly if the total cost is not an exorbitant amount. So this abuse by a small percentage of the providers continues to plague society and damage our health care system.
Health care fraud is a much costlier issue than some of the more well known insurance frauds. It is far more costly than slip and fall injuries, car thefts, property and casualty damages and the related insurance fraud, but because the health care industry views providers as part of their delivery system these abuses seem to be ignored or only mildly punished.
It's easy to feel angry when being confronted with these facts; fortunately, it's also easy to fight back. As a practitioner, or a billing department, be aware of the correct ways to file claims for reimbursement. This will help to ensure your funds are sent promptly and it will also cut down on the time it takes to complete the paperwork, helping to save you even more. As a patient be sure you understand what services are being provided and what tests are being conducted on you and the rationale for them. If something doesn't seem legitimate, ask questions - it's your right to do so. Review your EOBs carefully and make sure you understand what your insurer is paying for. Our company works hard every day with the goal of stopping this waste and abuse and redirecting up to $300 billion a year into better and more comprehensive health care for all US citizens.
Dr. Barry Johnson is a founding partner of HCI and has served as CEO/President since January 2001. He is a coding and reimbursement expert and has over 22 years of experience in software and database development. He has authored two books and numerous articles on medical and dental coding and reimbursement issues and health care fraud prevention. Prior to working for Medicode, Dr. Johnson practiced dentistry for 20 years. Dr. Johnson is a Certified Dental Consultant and a Fellow of the Academy of General Dentistry.
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Read more from DOTmed News:
Fraud Monitoring of Electronic Medical Records Uncovers Identity Theft
https://www.dotmed.com/news/story/8192/
This report originally appeared in the July 2009 issue of DOTmed Business News
I have been in the health care industry for nearly forty years, 19 as a provider and the last 20 working with payors focused on coding, reimbursement and cost containment issues. About 12 years ago I helped found a company that assisted payors to prevent unnecessary and wasteful claims payments. We used our proprietary software and expert clinicians to identify unnecessary and excessive services and charges. Two years ago our company was acquired and I stayed on and continued as president of our organization, which was now a division of a large analytics company that manages risk across the three different industries of property and casualty, health care and mortgage. Today, our company examines millions of claims a week, looking for potentially fraudulent claims and providers and sometimes, even patients. By identifying outlier patterns and by establishing billed services not supported by documentation in medical records, we're able to combat part of the problem of health care fraud.
Health care fraud costs our society between $70 billion and $300 billion per year. The government is aware of the problem but evolutions in our government and social developments have shifted resources from one area of interest to another. At one point, substantial justice department resources were committed to creating and sustaining task forces to investigate and prosecute health care fraud. Then, 9/11 occurred and most of the investigative resources from those task forces were diverted to homeland security. Only during the past two years have we begun to see assets re-committed to these task forces.
To understand the extent of the problem, take this example from Florida. Recently an investigation done by the federal government showed that somewhere in the neighborhood of two-thirds of the DME vendors weren't providing the services stated in their reimbursement requests. Many of these organizations were storefront operations, generating false claims, using stolen lists of patient names, and providing no services or supplies to anyone.
One reason criminals can successfully file false reimbursement requests is because many claims are processed through auto adjudication. That means claims submitted from providers can be processed by a computer, a payment determined and check cut and mailed to the provider with no human oversight occurring during the process. This happens millions of times a day with billions of dollars paid and in many cases no human ever looked at any step in the process. We want to believe that computers can do everything and they are very effective at consistently applying rules, provided that they have been programmed correctly and the safeguards of editing systems and fraud prevention systems are implemented, updated regularly and fully operational and not by-passed unintentionally. The reality is that there are defects in logic, loopholes in some rules and gaps in the security, and if a provider finds some creative billing tactic that gets approved every time, even if it's not correct, he or she often continues to exploit the opportunity.
There are even courses that teach people how take advantage of the system. Although most doctors probably are following proper protocols, the small percentage that do not become increasingly aggressive and abusive. Sometimes it's not the providers, it's the billing office. Those bilking the system are also hurting their colleagues. Half the dollars spent on health care reimbursement is being provided by federal and state governments. That being said, when someone is taking advantage of the system and overcharging, it depletes the finances available, making it more difficult for those filing correctly to receive fair and adequate reimbursement.
Part of the problem is the fact that there's not much of a deterrent in place to prevent people from practicing health care fraud. Often, even when a fraudulent provider is identified, there is rarely a suspension of a license or other definitive legal action. Sometimes, individuals are put on probation, sometimes the problem is ignored entirely -particularly if the total cost is not an exorbitant amount. So this abuse by a small percentage of the providers continues to plague society and damage our health care system.
Health care fraud is a much costlier issue than some of the more well known insurance frauds. It is far more costly than slip and fall injuries, car thefts, property and casualty damages and the related insurance fraud, but because the health care industry views providers as part of their delivery system these abuses seem to be ignored or only mildly punished.
It's easy to feel angry when being confronted with these facts; fortunately, it's also easy to fight back. As a practitioner, or a billing department, be aware of the correct ways to file claims for reimbursement. This will help to ensure your funds are sent promptly and it will also cut down on the time it takes to complete the paperwork, helping to save you even more. As a patient be sure you understand what services are being provided and what tests are being conducted on you and the rationale for them. If something doesn't seem legitimate, ask questions - it's your right to do so. Review your EOBs carefully and make sure you understand what your insurer is paying for. Our company works hard every day with the goal of stopping this waste and abuse and redirecting up to $300 billion a year into better and more comprehensive health care for all US citizens.
Dr. Barry Johnson is a founding partner of HCI and has served as CEO/President since January 2001. He is a coding and reimbursement expert and has over 22 years of experience in software and database development. He has authored two books and numerous articles on medical and dental coding and reimbursement issues and health care fraud prevention. Prior to working for Medicode, Dr. Johnson practiced dentistry for 20 years. Dr. Johnson is a Certified Dental Consultant and a Fellow of the Academy of General Dentistry.
--
Read more from DOTmed News:
Fraud Monitoring of Electronic Medical Records Uncovers Identity Theft
https://www.dotmed.com/news/story/8192/