The battle against healthcare fraud scored a number of impressive victories in 2010, through a number of high-profile cases and new policies under health reform.
The Department of Health and Human Services proposed new rules to fight waste, fraud and abuse in Medicare, Medicaid and the Children’s Health Insurance Program and also launched new resources to assist in busting fraud.
“Using these new fraud prevention measures, CMS will be able to move from a ‘pay and chase’ approach to one that makes it harder to commit fraud in the first place,” said HHS Secretary Kathleen Sebelius.
Among the efforts undertaken was the establishment of the Centers for Medicare & Medicaid’s Center for Program Integrity, focused on identifying and stopping fraud.
“While the majority of healthcare providers and suppliers are honest, we also know there are criminals who are looking for any opportunity to take advantage of beneficiaries and rip off Medicare, Medicaid and CHIP,” said CMS Administrator Donald Berwick, MD.
The Affordable Care Act includes new provider screening and enforcement measures to help prevent and fight fraud. In addition, the proposed rule contains the authority to suspend payments when a credible allegation of fraud is being investigated.
Policies set up under healthcare reform yielded many large fraud busts.
In what U.S. Department of Justice officials called the largest Medicare fraud scheme to come to light, 73 people were indicted in October and charged with a variety of healthcare fraud-related crimes that involve more than $163 million in fraudulent billing.
The indictments include a number of alleged members and associates of an Armenian-American crime syndicate, and allege that the defendants stole the identities of thousands of Medicare beneficiaries and numerous doctors and used the names to establish 118 shadow clinics in 25 states.
A former chief financial officer for three different hospital networks faced federal fraud charges in September for allegedly stealing more than $200,000 from health systems in Connecticut and Ohio.
William Roe, 54, of Wilton, Conn., was charged with fraud and interstate transport of stolen funds in the misappropriation of $166,166 from Danbury Health Systems in Danbury, Conn., and $33,500 from Catholic Health Partners in Lima, Ohio. He had been employed by each health system at the time the fraud was alleged to have occurred.
A few vendors capitalized on the fraud crackdown this year by developing solutions to help detect and eliminate healthcare fraud.
Targeting a segment of healthcare that costs the nation $200 billion to $600 billion a year, Emdeon, the Nashville-based developer of healthcare revenue and payment cycle management services, added Insurance Fraud Manager, from Minneapolis-based FICO, to its software suite. The business analytics software identifies fraud early in the billing process, speeds the processing of good claims and helps payers comply with mandated payment timetables, officials say.
“The ability to do pre-payment scoring on a wider range of claiming entities means that payers will be able to detect more potential fraud and prevent larger losses,” said Andrea Allmon, product director at FICO. “FICO’s predictive analytics have proven far more effective than rules-based methods in early detection of sophisticated fraud schemes.”
Officials of the two companies say a pilot study conducted in two states identified millions of dollars in cost savings through the use of Emdeon-FICO software.