Healthcare Fraud Control Articles

Make Fraud Control Everyone's Job

Healthcare Fraud Control Articles

When I worked for Indiana Medicaid I didn’t think about fraud very often. I was very busy, and it wasn’t my job. At least that’s what I thought at the time. Now I realize that it should have been a big part of my job. If I knew then what I know now, I would have realized that many of the annoying data anomalies I encountered were caused by fraud.

When I was preparing the Medicaid budget estimates one year, I noticed that podiatry expenses had increased dramatically. I was curious about that, but I was very busy. Total expenditures for podiatry were smaller than my rounding error, so I didn’t invest the time to figure out what happened. Later, I read in the news that a podiatrist had pleaded guilty to defrauding Indiana Medicaid. At least somebody was paying attention to podiatry expenses, but how many other things did I miss that were right under my nose?

Mathias Method to Dramatically Decrease Healthcare Fraud

Healthcare Fraud Control Articles

Fraud is a serious problem that affects every healthcare system. Each health plan loses from 3% to 30% to fraud, waste and abuse. Reducing fraud losses is one of the few ways that a health plan can cut costs without hurting their members or providers. Investment in fraud control typically saves $6 to $12 for every dollar spent, yet health systems have not invested in the level of controls that will effectively stop fraud. To dramatically decrease the expenses caused by the fraud that can be found in every healthcare system, invest in these ten high-priority activities:

Optimize the Fraud Control Cycle

Healthcare Fraud Control Articles

Fraud control is never a simple matter of buying an expensive fraud control system. Systems are predictable, which is what allows fraud to occur so easily. You can use data analysis and claims processing systems to increase the efficiency of your fraud control efforts, but alone, they can’t stop fraud. Technology is one tool that will help you as you put together the pieces of the fraud control puzzle: leadership, measurement, prevention, detection and enforcement.

When you put all these pieces together, you’ll have a set of controls that can dramatically decrease expenses caus

Ready or Not, Here Comes FADS

Healthcare Fraud Control Articles

Medicaid programs are paying increasing attention to finding fraud. Some states are purchasing fraud and abuse detection systems (FADS) to replace or augment their Surveillance and Utilization Review Systems (SURS). Unlike traditional SURS, fraud and abuse detection systems usually include sophisticated algorithms for finding suspect patterns and powerful querying and reporting tools to let analysts develop their own methods for finding fraud. FADS is a powerful new kind of tool, but it is not SURS. Medicaid programs need to be prepared to think in a whole new way.

Fraud Forecast Summer 2003

Healthcare Fraud Control Articles

I predict that in the next year we’re going to see a lot more cases involving growth hormones, stolen provider identities, counterfeit drugs, and excessive surgeries. These kinds of cases show that both fraud and fraud control are getting more sophisticated.

Lipitor Fraud and Waste

Healthcare Fraud Control Articles

The cholesterol lowering drug, Lipitor, is an expensive maintenance drug taken by a large percent of the adult population. Most people who take Lipitor have no symptoms. A cholesterol test showed that they have high cholesterol, so they get the prescription.
Once prescribed, patients will take this drug until something new replaces it. These factors make it the perfect drug for a pharmaceutical company’s bottom line. They also make it a target for fraud.

Who Steals?

Healthcare Fraud Control Articles

Not all fraud perpetrators are alike. Categorizing fraud perpetrators gives us a better framework for identifying opportunities for fraud, so we can create controls that will limit those opportunities. With each group, you’ll need different approaches to prevention, identification, investigation and prosecution. I categorize fraudsters into five groups who have different motives, opportunities and attitudes about risk: Avengers, Opportunists, Professionals, Dealers, and Organizers.

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.”

Fraud Control Under-funded

Healthcare Fraud Control Articles

Despite the growing awareness of the vast sums lost to healthcare fraud, most systems fail to allocate fraud control on the scale required by the flow of money involved. Fraud control in the US is under-funded by a factor of 20 or more.

Pharmacy Kickback Guidelines

Healthcare Fraud Control Articles

How many of your pens have a drug name on them? A pen is not valuable enough to cause suspicion of violating anti-kickback laws, but paying a physician to attend a conference might be. Today the HHS Office of Inspector General released their voluntary guidelines for pharmacy manufacturers. The 56-page document outlines what marketing practices could raise red-flags under federal anti-kickback laws.

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