More clarity in regulations would lead to less healthcare fraud

Even though roughly 20 percent of current Medicare payments likely go toward fraudulent claims, as fraud investigator Harry Markopolos pointed out as a HIMSS10 keynote speaker in Atlanta on Thursday, Princeton University economics professor Uwe Reinhardt doesn't think all of it is deliberate. Instead, it's often the product of a confusing administrative system, he says. A more measured and thought-out approach focused on changing the "administrative burdens" of fighting fraud could ultimately lead to less fraud, overall, Reinhardt believes.

Reinhardt, who explained his position in the New York Times blog Economix, thinks that because of all the regulatory trouble facilities can get in to for cheating the system, that "institutions bend over backwards to avoid [fraud]."

"[T]he regulations surrounding the rendering of health care services to the federal government are immensely complex," Reinhardt wrote. "They seem to be based on the idea that every provider of these services is a latent crook. Other countries manage the process by exception. They go by the assumption that the bulk of providers of care are honest and then merely go after the statistical outliers. Far less money is spent on billing in those countries." 

Reinhardt believes that, just as doctors are bound to the rule of basing their clinical procedures on "solid empirical evidence," so to should the government be bound in terms of the programs it creates to fight fraud. In other words, less complex and costly means to fighting fraud might actually lead to less fraud, altogether.

"If the president and Congress wish to constrain the growth of the administrative cost of American health care... [t]hey might commission a study exploring how government-run health systems in other nations manage to pay hospitals and doctors without imposing on them the huge administrative burden borne by American providers of health care," Reinhardt wrote. "Perhaps Congress can learn from such a study." 

To learn more:
- read this commentary in Economix
- read this Heath Data Management post

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