Screen for risky providers to root out fraud

To fundamentally change how healthcare fraud is rooted out, health insurance companies should conduct robust screening of providers in their network.

"The best way to prevent the bulk of healthcare fraud is to understand the risk associated with the providers that you're allowing to be part of your network," Bill Fox, senior director of healthcare for LexisNexis Risk Solutions, told FierceHealthPayer.

But while most provider screenings center around providers' claims patterns, Fox said payers must gather information about who providers are "as people in the world," including whether they have any sanctions, criminal convictions or are practicing in high-risk areas like home health or durable medical equipment.

"In essence, it's just business intelligence," Fox explained. "You're getting a better understanding of who it is you're dealing with."

The problem, however, is that payers' current method of provider screening lacks a comprehensiveness, which prevents payers from understanding the complete potential risk of allowing certain providers in their network.

"It's kind of shocking how rudimentary most plans' use of analytics is," Fox said. If, for example, a doctor is barred from one state for defrauding its Medicaid program, he could simply move to another state and have a family member set up the same operation there. With the current screening processes widely in place throughout the industry, payers would never know about the risk associated with that family member, assuming that she's never been sanctioned and or has criminal convictions because she's closely connected to someone who has been barred from Medicaid for fraud.

"That's really where real robust provider screening comes in," Fox said, because it allows payers to associate people with each other. In this example, payers could choose to still include the doctor's family member in their network but could actively monitor her, keeping a "very close watch" on her behavior. If she did attempt to engage in fraudulent activity, payers would be in a much better position to spot any suspicious activity and block it very quickly.

That's why Fox said it's so important for payers to have the appropriate processes, procedures and training in place within the company so employees know exactly how to act on information about risky providers once they receive it. "The data is out there; the computing power is out there; the capability is out there," Fox said. "So it's a matter of understanding where your gaps are by setting up the right processes inside and then actually executing and implementing that."