The challenge that health plans face is that within the spectrum of fraud, waste and abuse, it can be unclear if a billing mistake is accidental or intentional.
Under HIPAA, healthcare fraud is defined as "knowingly, and willfully executing or attempting to execute a scheme ... to defraud any healthcare benefit program."
Unlike waste and even abuse, which are characterized by an unintentional practice that directly or indirectly results in an overpayment, fraudsters are distinguished by their intention to obtain monies that they are not otherwise entitled to receive. It's often unclear if a billing mistake is accidental or intentional
To decipher between genuine administrative mistakes and blatant, deliberate fraud, the key is in looking for patterns of billing behavior, which may help indicate whether a claim error is accidental vs. intentional, as well as where it lives on the FWA scale. Tools that reveal emerging patterns can enable a health plan to better predict-and prevent-payment for erroneous claims of all types, including those related to fraudulent activity.
Service volume. If a provider were billing for about eight hours of services per day with a reasonable volume of patients, a health plan wouldn't suspect fraudulent activity. However, when pattern detection shows that the provider is actually billing that same amount of activity to multiple health plans, it raises the possibility of a potential fraud scheme. Cross-payer analytic tools that reveal a wider view of a provider's billing activity to more than one plan can demonstrate how impossible the billed volume is and support fraud investigation.
Excessive testing. A provider who orders an occasional unnecessary test isn't cause for concern. However, if a pattern emerges and, over time, the provider has a habit of administering and billing for unnecessary tests, health plans are able to take note of the activity and monitor it more closely as potential fraud.
False claims. One false claim can be discounted as an administrative error. For example, let's imagine that a man is admitted to a hospital for knee replacement surgery and billed for a pregnancy test. We recognize that this is a likely error made at the time of coding and claim submission. A pattern of a provider billing for psychotherapy services to elderly patients who claim to have never received them, however, is likely a case of fraudulent activity.
Unbundling. When a provider bills for multiple procedure codes for services that should have been covered by a single, more comprehensive code, it might be due to poor coding practice, or it might be intentional. Factors that increase the likelihood of such billing being fraudulent include, but are not limited to, repeated offenses over time, multiple schemes of unbundling in the same time period, varying from one to another scheme over time, and targeting unbundling schemes to specific insurance plans.
Upcoding and excessive services. It is difficult to identify upcoding and excessive services from a few claims. It is even more difficult to discern whether such behaviors are wasteful, abusive, or fraudulent in nature. Looking for template services billed on most patients with the highest service level, for example, would be one alarming pattern. Expensive procedures, or services not usually performed by the billing specialty, could be another indicative characteristic. The frequency of abnormal billing patterns arising from a provider's service profile indicates a correlation in pot
David Jackson is the senior vice president of payment accuracy at Verisk Health.