Almost 250 billion dollars is lost globally every year for healthcare fraud and errors – reuters. The amount is good enough to quadruple the World Health Organisation’s and UNICEF’s budgets and control malaria in Africa region.
A study by EHFCN and CCFS at a university in britain found that almost six perceny of annual global health spending is lost to mistakes or corruption, including healthcare errors and fraud which could be avoided.
The report reviewed 69 exercises in 33 organizations in six countries to measure healthcare fraud and error losses.
A Thomson Reuters report published last October found that the U.S. healthcare system wastes between $505 billion and $850 billion every year, with around 22 percent of that going on fraudulent insurance, kickbacks for referrals for unnecessary services and other scams.
The World Health Organization’s latest estimate of global healthcare expenditure was $4.7 trillion (3.3 trillion euros). The fraud report’s 260 billion loss figure is based on an average of 5.59 percent of spending being lost to fraud.
In a March 2011 speech, US President B. Obama said, “The greatest threat to America’s fiscal health is not Social Security. It’s not the investments that we’ve made to rescue our economy during this crisis. By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of healthcare.”
$60 billion. That’s the conservative estimate of how much money is lost to healthcare fraud each year according to the National Health Care Anti-Fraud Association (NHCAA). Other industry experts estimate the number to be much, much higher.
FBI – Health care fraud facts:
- Health care fraud schemes come in all forms—fraudulent billings, medically unnecessary services or prescriptions, kickbacks, duplicate claims, etc.
- Schemes target large health care programs—both public and private—as well as health care beneficiaries. (Medicare and the Medicaid are the largest programs, so they are targeted more often.)
- Schemes are committed by health care providers, owners of medical facilities and laboratories, suppliers of medical equipment, organized crime groups, corporations, and even sometimes by the beneficiaries themselves.
- FBI health care fraud cases sometimes cross over into other investigative areas, like organized crime, gangs, and cyber crime, where we see criminals beginning to use the proceeds from health care fraud schemes to fund their operations.
FBI – Tips to help avoid being victimized:
- Protect your health insurance information card like a credit card.
- Beware of free health services—are they too good to be true?
- Review your medical bills, like your “explanation of benefits,” after receiving health care services and ensure the dates are services are correct.
Thomson Reuter suggest below steps.
Fighting Fraud and Abuse
Obviously, winning the war against fraud and abuse could be lucrative. But first we have to determine where it occurs and how to attack it.
Looking at the healthcare system’s current fee-for-service model uncovers a trend where providers are encouraged to increase the number and complexity of the services rendered, even if they aren’t medically necessary. It actually creates overuse.
Overpayment is also an issue and seems somewhat driven by location. “Nearly 30 percent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to that of low-cost areas,” said Peter Orszag, President Obama’s budget director. This regional cost variance indicates widespread overpayment for services, and that converts to waste.
According to Thomson Reuters fraud expert Jean MacQuarrie, there is currently significant fraud occuring within three areas: durable medical equipment, infusion therapy, and home healthcare. However she cautions, “The problem is that fraud can pop up anywhere. Fighting it is like playing Whack-a-Mole at the carnival — you hit it once and it just pops up somewhere else.”
The Office of the Inspector General (OIG) Chief Counsel Lewis Morris discussed the issue of fraud with the Senate Finance Committee at an April roundtable discussion on healthcare reform. According to an article in AIS Health Business Daily, he said healthcare fraud has become a magnet for organized crime because the penalties are lower, there are low barriers to entry, the schemes are easily replicated, and the criminals perceive a low risk of detection.
But that perception may change. In May 2009, the Department of Health and Human Services (HHS) teamed up with the Department of Justice to form the Health Care Fraud and Prevention and Enforcement Action Team (HEAT). This is a joint effort to prevent fraud and enforce anti-fraud laws throughout the country. The team recently made headlines when they charged 53 people in Detroit with more than $50 million in false Medicare claims. That followed a separate sting in Miami where eight people were charged with creating phony clinics and submitting fraudulent bills to the tune of $100 million.
“The Obama Administration is committed to turning up the heat on Medicare fraud and employing all the weapons in the federal government’s arsenal to target those who are defrauding the American taxpayer,” said HHS Secretary Kathleen Sebelius. And money invested in fighting fraud and abuse pays off. The OIG is the federal government’s watchdog over fraud and waste in government programs. The office says that for every $1 it invests in healthcare fraud investigations, it reclaims $17. With that kind of ROI, the government could practically fund healthcare reform on its own.
Subsidizing Healthcare Reform
The president has called for healthcare reform legislation by October 2009. He has already identified “hundreds of billions of dollars” worth of savings in the federal budget that could help finance reform. The bulk of that money will come from rooting out rampant fraud, waste, and abuse in Medicare and Medicaid.
On June 19, 2009, the House Democrats introduced their first draft of healthcare reform legislation. Provisions within the proposed bill emphasize the federal government’s objective to fund a portion of the cost of healthcare reform through increasing program penalties; enhancing payment protections; and reducing fraud, waste, and abuse.
Everybody’s Problem
In the June 2009 NHCAA report, the association said “The enormous costs of healthcare fraud are borne by all Americans. Whether you have employer-sponsored health insurance, purchase your own insurance policy, or pay taxes to fund government healthcare programs, healthcare fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits or coverage.”
The report continued to break down the ways healthcare fraud, waste, and abuse affects the entire healthcare system — payers, providers, and patients. “For employers, healthcare fraud increases the cost of purchasing health care for their employees, which in turn drives up the cost of doing business. For individuals, the effects are more immediate and more devastating: the increased cost of health insurance due to healthcare fraud can mean the difference between being able to afford health insurance or not. For governments, healthcare fraud means higher taxes, fewer benefits, and increased budgetary problems.”
Whether it manifests itself as organized crime setting up HIV-infusion clinics in South Florida, businesses endorsing unnecessary electronic wheelchairs paid for by Medicaid, or providers making fraudulent claims, the first step in combating fraud and abuse is detection. And detection starts with efficient data mining and analysis.
Thomson Reuters Combats Fraud and Abuse
With a wide range of information systems implementation and solution development experience, Thomson Reuters has helped both government and private sector customers detect fraud, waste, and abuse, and simultaneously manage healthcare quality.
Using proven fraud detection and analysis expertise, data-investigation software, and fraud-detection algorithms, we mine data to help identify and analyze providers with highly suspicious behavior — behavior that often indicates fraud or abuse. This detailed information can be used to drive investigative and prosecutorial efforts. We can also produce new algorithms and drill-down analyses based on a program’s specific needs.
Thomson Reuters has helped numerous organizations use data from health claims and other sources to produce actionable information to combat this monumental problem. Our systems and analytical consulting help:
- Profile providers and patients
- Identify and prevent payment problems
- Recover misspent funds
- Improve the quality of healthcare
As a result, our customers have saved millions of dollars.
Global health care fraud has taken on several guises. For instance, the “profit” from such fraud schemes has proven so substantial that they have attracted the interest of criminal enterprises. These organized groups have defrauded insurance companies through elaborate schemes against government-sponsored programs, private health insurers and the property and casualty insurers. One of the most elaborate examples of the scope of international health care fraud rings was discovered earlier this year, when the U.S. Department of Justice announced the indictments of 102 members of an Armenian crime syndicate, accusing them of participating in massive health care fraud schemes. The gang operated a health clinic in Miami that paid individuals to refer “patients” of staged accidents and billing private insurance carriers “for treatments that were either not medically necessary or were not provided.” The Armenians allegedly had ties to Russian and Eastern European crime gangs as well as the Mexican Mafia.
Ref:
http://www.factsforhealthcare.com/
http://info.thomsonhealthcare.com/?elqPURLPage=475
http://www.fbi.gov/news/stories/2010/june/health-care-fraud/health-care-trends
http://www.ghcan.org/challenge.html