Reducing Medical Insurance Fraud Through Stringent Medical Claim Review

Hi, my name is Julie Clements. I am the Chief Solutions Officer here at MOS Medical Record Reviews. Today I wanted to talk about this stringent medical claim review that can help reduce health insurance fraud.

00:12 – Healthcare Fraud – A Serious Concern

So, healthcare fraud is a serious concern that increases healthcare costs considerably. According to the CMS, US spending on healthcare is projected to grow at an average rate of 6.2% annually. In healthcare fraud, false or misleading healthcare information is provided to a health insurance company with the objective of securing unauthorized benefits to the plan holder, healthcare provider, or another party. Typically, the fraud is committed either by the covered individual or the healthcare provider. Though there is only a small percentage of fraudulent claims among the millions of health insurance claims submitted to the insurers, that small percentage costs estimated tens of billions of dollars in terms of healthcare expenditure annually. This leads to higher premiums and other out-of-pocket expenses. Medical insurance fraud and Medicare/Medicaid insurance frauds constitute the majority of false claims among all the types of insurance frauds recorded in the United States. Medical claims review, one of the value-added medical review solutions, is a practical way to detect fraudulent claims. When a claim reviewer inspects the claim, they can notice anything unusual or incongruous in the medical claims and records.

01:20 – Types of Healthcare Insurance Fraud 

Some Common Types of Healthcare Insurance Fraud

This is from the National Healthcare Anti-Fraud Association. They have identified the following types of fraud –

• First one is – Providing medically unnecessary services for the purpose of obtaining insurance payments
• Second – Misrepresenting a patient’s diagnosis to justify medical tests, surgeries or other procedures that are not medically necessary
• Accepting kickbacks for patient referrals
• Up-coding or billing for more expensive procedures or services than were actually performed or provided. This requires “inflation” of the patient’s diagnosis code to a more serious condition to match the false procedure code.
• Another is – Billing for services that were not provided. This is done either via identity theft or using genuine patient information to forge entire claims, or by inflating claims with charges for services/procedures that never took place.
• Billing each step of a procedure (unbundling) as if it were a separate procedure
• Misrepresenting non-covered treatments such as cosmetic surgery treatments as covered treatments that are medically necessary
• Billing a patient more than the co-pay amount for services already prepaid or paid in full by the benefit plan under the terms of a managed care contract.
• Another is waiving patient deductibles/co-pays and over-billing the payer or benefit plan

All the above-mentioned fraud patterns can be detected by a trained medical chart review professional.

02:50 – Falsifying Medicare and Medicaid Billing

This is also something very unfortunate with fraudsters attempting to cheat the system. Here too, the Medicaid and Medicare programs are billed for procedures that were never performed or were performed for illegal reasons. Types of fraud could be in terms of falsified ambulance costs, durable medical equipment, prescription drugs, hospice or long-term care and so on.

03:13 – Medicare Categorization of Fraudulent Claims

Medicare.gov categorizes these three types of fraudulent claims as follows –

• 03:18 – False Patient Billing

First is false patient billing – Here a patient may provide their Medicare number and allow a provider to bill Medicare for unnecessary and unfulfilled tests or procedures.

• 03:28 – Phantom billing

Second one is considered as phantom billing where Medicare is billed for unnecessary or unperformed procedures.

• 03:36 – Up-billing or up-coding

And third is up-billing or up-coding – This is where the healthcare provider aims to receive additional, unjustified and illegitimate Medicare funds by reporting a code that may not be relevant at all.

03:49 – Healthcare Fraud – Penalties and Consequences

It is surprising that in spite of the heavy penalties and consequences instituted for healthcare fraud, people engage in this kind of activity. The laws and consequences for healthcare fraud are regulated by the HIPAA and a National Coordinated Fraud and Abuse Control Program. Those found guilty of fraud could be facing a sentence of up to 10 years in a federal prison alongside considerable monetary fines. In case a patient was injured because of the fraud, the conviction and prison term could be extended up to 20 years. If the patient died because of these fraudulent acts, the guilty person could be sentenced to life in prison.

Though the government has created many federal agencies to crack down on fraud, fraudulent schemes continue to occur. Therefore, more attention can be given to medical claims review to identify coding issues and avoid paying for illegitimate claims. This increases the significance of a medical review company providing this service. The increasing fraudulent activities in the US healthcare is one of the major factors that has led to the growth of the US healthcare fraud detection market. According to a Research and Market report, the US Healthcare Fraud Detection market valued at $337.41 million in 2018 is expected to reach $1,254.48 million by 2024, so that’s growing at an estimated 24 almost 25% during the forecasted period. Insurance claims review is expected to hold the major share in the market.

So that is good information to hold on to, if you have any questions on medical review or need help with that you can go to our website or give us a call. Our website is mosmedicalrecordreview.com. Thank You.