Breaking points: Plans, policies worth watching to fight fraud

I hate it when criminals know our business better than we do, when they find easy-to-exploit benefit structures and payment policies that are off our radar.

Insurers should study employer-sponsored health plans and payment policies carefully. Some are like low-hanging fruit dangling in the faces of hungry criminals; we need to pick it before they do. Cases where providers victimized employer groups drive this point home.

A chiropractor, for example, began servicing the staff of a 200,000-member self-insured government group that offered generous physical therapy benefits. He treated patients at a rate and duration far greater than specialty norms. On-site review showed patients received repetitive message therapy services that didn't qualify for payment, and an overpayment of several hundred thousand dollars resulted.

Another chiropractic office tripled its annual earnings by servicing patients who worked for the same company. The employer's physical therapy benefits became the provider's jackpot. The chiropractors headquartered themselves near the group's office and recruited new patients aggressively: They offered free lunches when people saw them for adjustments and encouraged patients to bring family members in for care. The chiropractors saw some employees three times weekly for noncovered services billed as four units of physical therapy.

Once they had member insurance identification numbers, the providers began filing fraudulent claims for services not rendered. They billed 90 physical therapy visits per patient annually, right up to the benefit maximum. The chiropractors were eventually prosecuted and convicted with a court-ordered restitution of $8 million.

Then there was the fully-insured national group whose CEO fell down the mountain in a skiing accident. Suddenly, the standard benefit of 30 physical therapy visits annually simply wouldn't do, and the group contemplated offering unlimited physical therapy. Putting aside the question of how this would affect their rates, can you imagine the damage criminals could do with an uncapped benefit like that?

Rich benefit plans, often called "Cadillac coverage," aren't as common as they once were; but some still exist. We need to identify and put controls around them just as we work to control overutilized services. Highmark, for example, requires precertification for more than eight sessions of physical therapy, occupational therapy and chiropractic care, as FierceHealthPayer reported.

Some of the best allies a special investigations unit can cultivate are the definitive sources of benefits information in the company, whether they're benefit designers in product marketing, staff who file subscriber agreements with regulators or those who program the claims system.

Payment policies are another key area to watch. Are there any circumstances, for example, in which your company pays the full reported charge on claims? If so, is that required or sensible? Address these payment policies before fraudsters find them to protect against losses like this:

One insurer found patterns of out-of-network colonoscopy claims with an average reported charge of $80,000 paid to patients. Many of them traveled thousands of miles for colonoscopies, endoscopies and other procedures readily available locally.

Providers offered travel incentives including free airfare, hotel accommodations, theme park tickets and even cosmetic surgery. Among the patients were immigrants persuaded to travel by runners recruited from the members' ethnic groups. The providers were criminally prosecuted.

All this reminds me of a co-worker who delighted in his ability to break things. If we pilot tested a new program or system, for instance, his job was to find all the ways it could be sabotaged. Finding breaking points is also a worthwhile assignment for SIU analysts: Know the groups that offer lavish benefits. Know the payment policies that lend themselves to fraud and abuse. And then build fences around them. - Jane (@HealthPayer)

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