California HealthCare Foundation has released its annual Health Care Costs 101 Snapshot, a visual representation of costs and financing trends over the past decade, as well as predictions of future costs. Taken from several public and private data sources, the presentation is a valuable overview of health care financing issues in California and the nation.
Health Care Costs 101 includes details on:
- National health spending as a share of gross domestic product;
- Per capita health costs nationwide;
- Spending distribution by health care categories;
- Who pays for health care;
What you can learn from: Crime Fighter
by Jack Maple with Chris Mitchell
In Crime Fighter we learn that enforcing sound principles can turn a losing fight against crime into a winning fight. Using the four principles below, the NYPD dramatically reduced crime in just two years (from 1994 to 1996):
1) Accurate, timely intelligence. Everyday each precinct reviewed their crime statistics on a map that was posted in the station. At each level, decision makers were help responsible for the crime in their area. They would use the maps to help establish patterns and track down the criminals.
“You can be vulnerable simply because your systems are the same as everyone else’s.” Bruce Schneier
- Security is only as strong as the weakest link. If a crook can enroll as a provider without providing any credentials and can bill using a list of patients stolen from another provider, then all the computer network security in the world is not going to help you. If he can create believable bills, most of your sophisticated algorithms aren’t going to find him. Provider enrollment is just one of many very weak links in healthcare payment.
- Class breaks allow a perpetrator to attack several systems with the same ease as he can attack one system. The standardization required under HIPAA is going to make it easier for us to use fraud fighting algorithms developed for one plan to find fraud in another plan, but it will also make it easier for criminals to use the same exact scam in multiple places.
You’ve got to read this book by Kevin Mitnick, the notorious cracker. You’ll learn to take security a lot more seriously. Mitnick describes scam after scam that involve social engineering—tricking people into thinking they should give you information. The lesson is that all the systems in the world won’t stop fraud by themselves. Only people can stop fraud.
Most of the scams he describes do not require a computer. The scams work by convincing people that the scam artist is somebody they should trust, such as the vice president in the LA office, the security consultant or some other coworker you’ve never met. They provide just enough believable information to get the next bit of information they need for their scam.
A Statistical Study of State Insurance Fraud Bureaus. Washington: Coalition Against Insurance Fraud, 2001.
This study summarizes the responses to surverys of fraud bureaus. The surveys were conducted between 1995 and 2000. It includes national statistics as well as the responses from each state.
Important results include:
“Overall, for the 35 bureaus reporting 2000 budget figures, states spent approximately 43 cents per resident to combat insurance fraud—a crime that is estimated to cost each household roughly $1,000 each year.” p. 7
Payment Accuracy Review of the Illinois Medical Assistance Program: A Blueprint for Continued Improvement. Springfield: Illinois Department of Public Aid, 1998.
In 1998, the Illinois Department of Public Aid completed a study of payment accuracy, which they believe to be the first review of any state Medical Assistance Program. In their reviewed of a sample of 599 services, they interviewed clients and had medical experts review the claims. They found 95. 28% percent accuracy rate, plus or minus 2.31% of total dollars paid, which in 1998 would have been at least $113 million. The review also identified specific areas with much higher error rates, including non-emergency transportation, which had a 31% error rate.
The methodology used for this study serves as an example for other programs measuring payment accuracy or fraud.
Health Care: Fraud Schemes Committed by Career Criminals and Organized Criminal Groups and Impact on Consumers and Legitimate Health Care Providers. Washington: United States General Accounting Office, 1999. Not available online. Contact us.
You’ve got to read this report. It shows how fraud can spread easily from state to state, insurer to insurer and scam to scam. Perpetrators use family members, friends and former cellmates to franchise their scams. “In the North Carolina Medicare case, three subjects residing in North Carolina traveled to Florida where relatives taught them how to anonymously file false Medicare claims. They then returned to North Carolina and began filing such claims.” Unless people in your state don’t have any connections to people in other states, chances are, somebody is using a sophisticated scam that they learned elsewhere.
State Efforts to Control Improper Payments Vary. Washington: United States General Accounting Office, 2001.
GAO surveyed state Medicaid programs and Medicaid Fraud Control Units (MFCUs) to find out about their activities to control improper payments. The study shows how low funding is for controlling improper payments and fighting fraud. The report includes a statistical summary of responses, but does not provide the detail needed to understand the relationship between variables.
Fiscal Year 2002 Medicare Fee-for-Service Payments. Washington: United States Department of Health and Human Services Office of Inspector General, 2003.
This OIG report estimates Medicare payment error rates for fiscal year 2002. The overall rate remained at 6.3% (the same as FY 2001). The report includes a description of the methodology used to establish error rates.
Overall error rates have remained constant since 1998, but the amount of each type of error varies considerably. Whenever documentation errors fall, medical unnecessary services errors increase. In years when better documentation is provided, OIG found more medically unnecessary services, and the overall rate of error did not change.
Reducing Payment Errors and Stopping Fraud in Medicare. 7 May 2002. Washington: United States Department of Health and Human Services.
CMS is taking a two-pronged approach to reducing payment errors: educate providers to reduce mistakes and “Addressing program vulnerabilities by promoting voluntary compliance while focusing anti-fraud resources on the small fraction of providers trying to defraud the program.”