Managed Care Fraud Control

Managed Care Fraud Control

Healthcare Fraud Control Articles

There is a myth that there is no fraud in managed care. In fact, a large percent of managed care services are now fee-for-service. For those services, HMOs are at the same risk of fraud as other insurers.

For other services, the incentives for fraud are different but still exist.
Managed Care Magazine reported in October 2002, “Every $1 that health plans spend to set up special investigation units could result in $7 recovered.”

At a managed care conference in February 2003, I was shocked to find that many people did not think healthcare fraud was something their companies needed to worry about. I heard comments like:

  • Maybe in Florida, California and New York, but not in my state.
  • Why would anyone bother to steal from Medicaid? The rates are too low to make it worth it.
  • Fraud is not a problem in managed care. (Despite having just discussed how much of their business is now fee-for-service.)
  • I just can’t imagine doctors in our network stealing.
  • It had never occurred to me that my staff could be involved in fraud.

What worries me most about these comments, is that the organizations that assume that they don’t have a problem with fraud are at the greatest risk of being defrauded. The best target is somebody who doesn’t realize they are a target, and therefore does not do anything to protect themselves.

Our web page about Fraud Cases shows a sample of the kinds of scams that are routinely perpetrated against health insurers. If you don’t have controls in place to protect you from these and other scams, you are losing vast amounts of money to fraud.

Fraud is in every state, provider specialty, hospital system, and network. It affects Medicaid, Medicare, Workers Compensation, HMOs, PPOs and private insurance.

Fraud continues to be a huge problem in healthcare because:
  • Fraudsters have more incentive to steal than we have to keep them from stealing.
  • We only catch the most obvious crimes, where people were particularly greedy and/or particularly lazy.
  • Fraudsters devote more resources to stealing than we devote to catching them.
  • Fraudsters change faster than we do.
  • It is easier to find one loophole to exploit than to close all the loopholes.
  • Fraudsters communicate more than we do.