Dr. Steve Woh, medical director and health claims, global medical with RGA Re says the one thing to know about fraud is that it is an ever-present factor in a health insurer’s day-to-day business.
“Fraud, waste and abuse. Prevalence of all three of these challenges is constantly on the rise for healthcare providers and insurers, leading to materially increased costs for payers, be they consumers, government bodies or insurers,” he writes in the recent RGA Re bulletin entitled Fraud. Waste. Abuse.
“Fraud, waste and abuse can also be either planned or opportunistic. Planned actions are more likely to meet legal definitions of fraud as there would have been premeditated intent to gain,” he adds. “Opportunistic actions of this sort, on the other hand, are more likely to be viewed as waste or abuse.” (Waste, he says, could be a case of providing extravagant or unnecessary treatment. Abuse is defined as being harmfully or morally wrong.)
Abusive practices
The report goes on to identify and explain a number of abusive practices, including non-disclosure and misrepresentation, phantom billing, overutilization and over charging, duplicate claims, unbundling (where practitioners claim individual elements of each procedure to increase reimbursement), upcoding (where providers submit a billing code for a more expensive service), identity theft and kickbacks.
“Insurers require controls, processes and strategies to detect and combat all three (elements – fraud, waste and abuse), as each can be perpetrated by several healthcare stakeholders.”
Although not infallible, he goes on to say that artificial intelligence (AI) is emerging as a tool. He also urges companies to look at their policy language and assessment criteria. “Client-facing strategies should include strong policy terms and conditions language, especially around definitions of ‘medical necessity’ and ‘reasonable and customary,’” he adds.
Prosecuting fraud
The briefing concludes with a discussion about legal issues and urges insurers to report appropriate cases to local law enforcement, recommend prosecution and be prepared to assist. “Insurers should not shy away from pursuing such cases,” he says. “Prosecution of insurance fraud is in the public interest.”
