Health insurance fraud is a quiet crime — no blaring sirens or masked gunmen. The only victims are the American taxpayers, and most of us don’t even realize we are being ripped off, say, by a provider billing for services that were never rendered.
Technically, fraud is any intentional deception or misrepresentation made to result in some unauthorized benefit. Realistically, it is expensive. According to the National Health Care Anti-Fraud Association, 3% to 10% of all dollars spent on health care is lost to fraud. Highmark’s claim expenditure for 2014 was $19 billion, so our estimated loss to fraud that year was $570 million to $1.9 billion.
Equally troubling are health care waste and health insurance abuse. Health care waste occurs when information is provided to a health insurance company that results in higher payments than the person or business is entitled to receive. One example is overutilization of services: if a provider prescribed all patients to receive an X-ray every time they have an appointment.
Health insurance abuse occurs when there isn’t any intent to deceive for monetary gain (which is fraud), but there is instead overutilization and/or inefficient use of resources. An example is billing improper codes or billing services as separate that should be bundled under the same code. The result can lead to higher health insurance premiums or greater government spending.
Financial Investigations and Provider Review
We are proactive in investigating and detecting potential health care fraud, waste, and abuse. Our Financial Investigations and Provider Review (FIPR) unit was created to investigate all cases of fraud, waste, and abuse that impact us financially or impact the health and welfare of our members.
FIPR supports our company’s mission of providing affordable, quality health care by ensuring that provider reimbursements are appropriate and by investigating and resolving suspected incidents of insurance fraud, waste, or abuse externally or internally. FIPR accomplishes this by deploying a variety of techniques:
Utilizing data analysis to identify aberrant claims
Applying claim coding reviews and other investigative techniques to assess the appropriateness of provider payments
Pursuing recoveries as necessary
Successful fraud prevention requires the identification, investigation, and resolution of potential fraud occurrences by means of the following:
Fraud referrals from members, employees, and providers
Active relationships with law enforcement personnel who receive information from FIPR to support criminal investigations
Continual analysis of health care claim patterns
Investigation of red flags like high claim utilization on a given day or provider billings that greatly exceed the normal billing pattern of comparable providers
Types of Fraud Investigations
Here are some of the types of fraud we pursue actively and examples of each.
Provider Fraud — billing for services not provided or billing for a more costly service than one performed, billing each stage of a procedure as it was separate, issuing kickbacks, billing for non-covered services or making a false diagnosis, setting up phony clinics to generate false claims
Subscriber Fraud — allowing someone else to use your insurance card, using an insurance card that has been canceled, placing ineligible dependents on your plan, asking a provider to falsify a report to receive a non-covered procedure, asking a provider to waive a copayment, forging receipts to get reimbursement from the insurer
Pharmacy Fraud — misrepresenting information on an enrollment application, placing ineligible dependents on your plan
Group Fraud — ghost employees or nonexistent employees, subscribers who are not employees, part-time employees, ineligible dependents
Highmark Blue Cross Blue Shield serves the 29 counties of western Pennsylvania and 13 counties of northeastern Pennsylvania. Highmark Blue Shield serves the 21 counties of central Pennsylvania and also provides services in conjunction with a separate health plan in southeastern Pennsylvania. Highmark Blue Cross Blue Shield West Virginia serves the state of West Virginia plus Washington County. Highmark Blue Cross Blue Shield Delaware serves the state of Delaware. Highmark Western and Northeastern New York Inc., serves eight counties in Western New York under the trade name Highmark Blue Cross Blue Shield of Western New York and serves 13 counties in Northeastern New York under the trade name Highmark Blue Shield of Northeastern New York. Each of these companies is an independent licensee of the Blue Cross Blue Shield Association. Blue Cross, Blue Shield and the Blue Cross and Blue Shield symbols are registered marks of the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. All references to “Highmark” in this document are references to the Highmark company that is providing the member’s health benefits or health benefit administration.
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