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Spring 2009
contents
Features Up At Night?
page 16
Understand how cost containment influences the bottom line of a fully insured health plan when focused on fraud prevention.
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Dental Fraud
page 20
Find out why many dental plans are numb to the pain and learn strategies every payor can incorporate to prevent fraud and abuse.
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contents
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14 Industry 10
Health Care Fraud Statistics – You need to see this to believe it
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Targeting the Fraud Continuum – Which claims do you prefer - Inappropriate, Abusive or Fraudulent?
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Fraud Finder Focus – Meet Dr. Barry Johnson, President of HealthCare Insight
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Same Smoke, Different Fire – Do current P&C fraud solutions fall short?
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Knowledge 30
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The Oven – Your current PowerPoint is over done. It’s time to cook up something new.
Technology 32
Spring 2009
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Your New e-lodex – Discover new ways to use technology to your advantage when forging relationships with business contacts
Misc. 6
4
Letter From the Editor – Profiler’s Editor-in-Chief discusses the focus of our premiere issue
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Note to Self – Profiler picks the best books, websites, blogs and free web applications
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I recently typed the words “health care
That’s enough money to insure up to 30.5 million Americans.
fraud” into Google and clicked “search.” My search retrieved 728,000 results. By comparison, the term “credit card fraud” yielded 2,750,000 results. If a Google search can be considered a type of public buzz barometer, it’s puzzling that health care fraud — a potential $240 billion* annual problem — would be less represented than credit card fraud, estimated at $3.2 billion annually. Perhaps it’s because the thought of our family doctor falsifying claims to maximize reimbursement is something that makes us uncomfortable. Perhaps it’s because we can’t believe that highly educated physicians bound by the Hippocratic Oath would resort to criminal activity. However, it’s a reality we have to face. At $240 billion, health care fraud translates into a $787* loss per capita. That’s enough money to insure up to 30.5 million Americans, or about 65 percent of our country’s uninsured population. As responsible citizens, we can no longer afford to let health care fraud remain a taboo topic. It’s time to put this crisis in the national spotlight and attack it with the collective wisdom and force we are capable of. I feel the creation of Profiler Magazine is a necessary step in this process. I would like to thank you for picking up our inaugural issue of Profiler Magazine The Fraud Finder’s Resource. With your support, we will establish this publication as the nation’s leading fraud detection guide for private and public sector health care payors. Profiler’s content is tailored to meet the demands of health care industry decision-makers and contains content-rich articles written by nationally established fraud experts. From discussing emerging fraud schemes to exploring cutting-edge frauddetection methods, we are committed to the topics relevant to helping your business grow and remain competitive. In this issue, we uncover the essential elements of effective health care fraud control, learn about key strategies to prevent dental fraud, and discuss the issues that keep managed care executives up at night. For your educational enjoyment, we’ve included our list of Profiler’s Best, future fraud loss projections and tips on how to give your dated corporate PowerPoint template new life. You’ll also find interesting articles on medical fraud in P&C claims and how you can build your digital network. We will be publishing Profiler on a semi-annual basis, so look for another issue to come across your desk during the summer of 2009. In the meantime you can get your “fraud fix” by visiting us online at www.profilermag.com. We hope you have as much fun reading this magazine as we did making it. If you’d like to share your thoughts with us, email me at darin@profilermag.com.
Profiler Magazine 10897 S. River Front Parkway Suite 200 South Jordan, Utah 84095 Toll Free: 877.619.5557 Fax: 801.285.5801 PUBLISHER: HealthCare Insight info@hcinsight.com www.hcinsight.com EDITOR IN CHIEF: Darin Johnson darin@profilermag.com CREATIVE DIRECTOR: Mica Johnson mica@profilermag.com PRODUCTION MANAGER: Deborah Evans deborah@profilermag.com CONTRIBUTORS: Barry Johnson Brent Cashman Charlie Stewart Debi Behunin Jeff Young Joel Portice Kim Glassman Michael Pallerino Scott Klososky WEBSITE: www.profilermag.com Copyright 2008 by Profiler Magazine All rights reserved. Materials may not be reproduced in whole or in part without written permission. For reprints of any article, contact the editor. *The opinions expressed by any contributors are not necessarily those of Profiler Magazine.
Sincerely, Darin Johnson Editor-in-chief *According to NHCAA and CMS.
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Darin Johnson Editor in Chief
Superhero Skill: Time travel Dream Job: Owner, Chicago Cubs 3 Things I Would Never Want To Carry While Walking Through The Desert: Typewriter, Banana Boat Dark Tanning Oil, space heater You Gotta See: Hear No Evil, See No Evil Richard Prior and Gene Wilder achieve comedy utopia Best Habit: Unusually high consumption of diet soda Worst Injury: Ego severely injured in failed entrepreneurial venture - 2001 Made Up Word: blarg (blärg) (n.) An online journal, like a blog, that is mostly full of blah banter and argumentative discussions from people with too much time on their hands. The contents of a blarg often cease to be relevant, even to the author, the moment they are posted.
Deborah Evans Production Manager
Superhero Skill: Invisibility Dream Job: Songwriter 3 Things I Would Never Want To Carry While Walking Through The Desert: Can’t I just ride through the desert on a horse with no name? Worst Injury: Flying face first off my bike onto the concrete broke my jaw, my nose, and all my braces. At age 11, I was already a geek so a swollen face definitely didn’t raise my ‘cool’ factor. Current Desktop Background: A tree. I LOVE trees. Best TV Channel: Definitely BRAVO…fashion, design and utter trash at any time! Made Up Word: Debism: personal, creative system of beliefs, doctrine and theory that guides Deborah Evans through her chaotic, but very enjoyable existence.
Mica Johnson Creative Director
Superhero Skill: Healing powers Dream Job: Buyer of winning lottery tickets 3 Things I Would Never Want To Carry While Walking Through The Desert: A stack of wool sweaters, a gallon of saltwater, a baby camel Worst Injury: The morning after my 21st birthday party. Current Desktop Background: Wood grain. It helps warm up cubicle grey. Never See: Face Off - John Travolta & Nicholas Cage surgically switch faces. Possibly the worst movie ANYONE has ever seen. Made Up Word: Remedemic \rem-muh-dem-ik\ (n.) Sweeping, positive social change tending to effect a disproportionately large number of people within a given population for the better.
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Note to
Self
S
ooks
eth Godin hits a homerun with his take on marketing in the modern age. Just as his successful marketing blog (http://sethgodin.typepad.com) conveys, the reader is urged to get in touch with themselves and realize that the tools are already within, just waiting to be recognized. According to Godin, Tribes are groups of people aligned around an idea, connected to a leader and to each other. It’s easier than ever to find, organize, and lead a tribe because the web has enabled an explosion of all kinds of tribes – and created a shortage of people to lead them. This book will help you understand exactly what’s at stake, and why YOU can and should lead a tribe of your own.
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W
ritten by the esteemed Arbinger Institute, Leadership and Self-Deception takes a psychological approach to management. We follow Tom, a newly hired executive as he learns to think ‘out of the box’ in order to improve his leadership, all the while undergoing a personal transformation. The entertaining story uses examples from the characters’ private and professional lives to show how self-deception skews our view of ourselves and how we interact with others. Leadership and Self-Deception is an inspirational book that all managers should read.
B
y exploring our private worlds (desks, bedrooms, even our clothes and our cars), professor Sam Gosling shows how the bits and pieces of our everyday lives can reveal more than we ever imagined in unexpected and unplanned ways. What he discovers is astounding: the things we own and the ways in which we arrange them often say more about us than even our most intimate conversations. Snoop is an entertaining must read for anyone who wants to learn more about the psychology of understanding themselves and others.
S
unstein, one of America’s internet big thinkers, has written an intriguing new book in which he argues that insights about the genius of markets are equally true of the internet. He convincingly reveals the limitations of popular processes like deliberation while showing how collectives–under certain conditions–can effectively solve many problems. This extraordinary work compellingly maps the promise and risk of the information society. As with everything Sunstein writes, this beautiful and clear book has something to teach the experts, and plenty to teach the rest of us.
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Blog
Apps
Web
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Health Care
Market
What Does Health Care Fraud Really Cost?
M ost commercial and public payors know that fraud and abuse leads to fewer patient benefits, higher premiums, inaccurate patient histories, and other collateral damage. What’s less known is the total cost of fraud nationwide and how those costs trend over the coming years. Quantifying the annual losses attributed to health care fraud and abuse remains a difficult proposition. Given the covert nature of fraud, a definitive number remains elusive, and polling the perpetrators isn’t a viable option. According to the National Health Care Anti-Fraud Association (NHCAA), 3 to 10 percent of the nation’s annual health care outlay is lost to fraud and abuse. With CMS health care spending projections of $2.5 trillion in 2009, the fraud and abuse problem is valued somewhere
Facts
between $77 and $255 billion for 2009. The fact that fraud estimates span a range of $178 billion says a lot about the nature of fraud and our inability to accurately quantify it. Despite the difficulty projecting fraud, one thing is concrete: As the “baby boomer” generation continues to age and health expenditures increase, the fraud and abuse problem will grow in the absence of adequate prevention methods. Assuming current fraud loss and health care spending rates continue, the health care fraud problem could reach a staggering $330 billion by 2013. While the cost of fraud will continue to remain somewhat of an enigma, no one can argue — even by conservative estimates — that fraud is a problem that no payor can afford to ignore.
Figures based on NHCAA and CMS.
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Targeting Fraud Continuum the
by Jeff Young
H ealth care fraud and abuse occurs at varying levels, from the most basic errors, to the most complex level of intentional fraud. An effective fraud and abuse program will monitor all aspects of the fraud and abuse continuum in an effort to control unnecessary and inappropriate costs. Health care fraud is defined as intentionally submitting false claims for the purpose of obtaining unentitled funds. Individuals and organizations deeply involved in committing fraud are always evolving and altering their complex schemes to remain undetected and invisible. Examples of fraud include billing for services not rendered, stealing identities (provider or member), exposing patients to unnecessary invasive procedures, and misrepresenting a non-covered service as a covered service. It is imperative that commercial and public payors implement controls and processes aimed at detecting, stopping, and preventing these intricate schemes. Equally important is the detection and prevention of abusive patterns. There is still some intent that exists with abuse. Some providers believe that because they provide superior service, have sicker patients, and are unjustly compensated, they are entitled to additional reimbursement. Examples of abuse include up-coding of office visits or procedures rendered, unbundling, billing for services within the global service period, and modifier abuse. It is equally important to monitor this
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type of behavior because in many instances, abuse is the precursor to intentional fraud. Among the most basic areas of the fraud and abuse continuum is that of error. The health care coding system is complex and can lead to billing errors. These errors are usually unintentional and provide an opportunity to educate and bring awareness to the provider. The difference between fraud and abuse can often appear ambiguous. Ultimately, a court of law establishes if fraud occurred and if a provider or individual intentionally filed false claims or information. This can include any of the previously discussed examples of fraud and abuse. In 2007, the FBI investigated 2,493 cases of health care fraud, resulting in 635 convictions. According to the FBI, the most common health care fraud schemes are billing for services not rendered, upcoding, duplicate claims, unbundling, excessive services, medically unnecessary services, and kickbacks. A comprehensive anti-fraud and abuse program needs to focus on the nuances of fraudulent behavior and abusive practices so as to deploy technical and clinical detection capabilities that recognize the differences. Acts of fraud and abuse contribute to significant losses in the health care industry. To effectively prevent the collective damages, payors need to demand their program capture and dispose of all forms of fraudulent claims submissions. w w w. p r o f i l e r m a g . c o m
President, HealthCare Insight point of view by Kathryn Peterson/Connect Photography by Kevin Kiernan/ Business Connect magazine
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dr. barry johnson
When it comes to fighting fraud, Barry Johnson walks the talk. He’s been blowing the whistle on fraudulent providers, or as he calls them “people with larceny in their hearts,” for the past 10 years. Today, Johnson’s philosophy to combine technology with clinical expertise has become his hallmark to managing health care costs for clients, and the key to HCI’s tremendous success. “Barry links software to people decisions, and he can convey that idea in a non-technical way, which is unique in and of itself,” says Joseph White, chief accounting officer for Long Beach, Calif.-based Molina Healthcare, an HCI client. Connect: You practiced dentistry in the Midwest for 21 years. How did you get into medical fraud? Barry Johnson: After going to dental school at Northwestern University, I practiced dentistry on the south side of Chicago. I finally said, “I don’t want to do this anymore.” I took a job with Medical Data Research, which merged with MedIndex to form Medicode. At Medicode, I gave coding seminars, wrote coding publications, and worked my way up to the director of marketing … and now to president of the company. Connect: What got you interested in medical fraud? BJ: In Illinois, I was appointed to a panel to evaluate malpractice in the Medicaid environment. I couldn’t believe what I saw. There’s a lot of opportunity for fraud in health care because the system is based on trust. The insurance companies, doctors and patients all assume things. If you take those assumptions and believe that everyone’s being honest, then basically the system works. But if you take someone who has “larceny in their hearts” as I heard one attorney refer to it, they will see a system where many are not trustworthy. That’s why the Russian Mafia wants to do medical fraud and not narcotics, because it’s a system of trust, and they can exploit it. Connect: Do you miss dentistry? BJ: Not for one minute. I was a political science major at the University of Utah, so I had this whole side of me that was being unchallenged. It’s been wonderful. Connect: What are the most common types of medical fraud? BJ: Unbundling is the biggest error in coding rules. It’s a simple concept — do I charge you for a happy meal, or do I charge you for fries, a drink and a burger? Obviously, the fries, drink and burger cost more than a happy meal. The same goes for a hysterectomy. Does the payor charge for a hysterectomy, or separately for the removal of the uterus and other parts? Our software catches these types of coding errors, and then we have a medical expert analyze it.
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Connect: The National Health Care Anti-Fraud Association says that fraudulent and overpriced claims in 2008 are projected to climb as high as $240 billion. Why has medical fraud become so prevalent? BJ: There was a huge FBI taskforce to stop medical fraud until Sept. 11, and then they took almost all of those people off to focus on terrorism. Also, medical fraud is dynamic — you can’t teach the model because it’s always changing. If you don’t actually examine what’s going on in a claim, it’s really hard to make the right decision. This is also why consumers must get involved in the process. Connect: How can consumers detect fraud? BJ: First of all, look at your claims. Don’t just assume that your insurance company is right. People should look at their total charges and ask themselves, “How could that be $500? I was only in there for five minutes.” Look at the charges and the number of line items, and call up your insurance company and say, “I want to know what I paid for.” They can tell you what was billed. Connect: Which health care industries are most prone to fraud? BJ: Chiropractic fraud is a huge problem, so much so that Canada completely cut it from its health care system. The next biggest area is the practice of dermatology. In dentistry, the most fraud is between periodontists and oral surgeons. In facilities, the biggest area of abuse is billing for miscellaneous items and ridiculous fees for appliances, like charging $130,000 for a pacemaker. Connect: Do you find yourself losing trust in the system? BJ: I think that the system is hopelessly complex. The consumer has to get involved in this process if we’re ever going to stop fraudulent providers. If you notify providers that they’re doing those things, 75 percent will stop and modify their behavior. But there’s about 5 percent of these people who are outright bad and won’t stop. Connect: What are you most proud of? BJ: We’ve created an environment where a lot of exceptional people work. As a company, our biggest accomplishment is that we provide a unique service that is much more accurate in combating fraud. Connect: What’s in the future for HCI? BJ: We were recently purchased by ISO, which is a large privately-held company in Jersey City, NJ. We were growing so rapidly that we couldn’t fund our growth. ISO was in the property and casualty fraud industry, and wanted to move into the vertical of health care fraud. They appreciate how unique it is to have our group of talented, specialized people who understand systems and coding. It’s rare to find that kind of talent.
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Essentials Fraud Prevention of
by Joel Portice
The United States health care system remains large, complex, and inefficient. According to CMS, health care spending in the U.S. will exceed $2.4 trillion in 2008 and is projected to experience significant growth over the next several years. By 2014, health care expenditures will represent approximately 20 percent of the Gross Domestic Product of the United States. Health care’s impact on society, specifically in terms of economics and quality of life, is substantial and requires efficient practices to deliver superior care in a cost-effective manner. With its convergence in to the financial services industry, the health care system will inherently benefit from existing practices perfected by financial institutions, primarily in the disciplines of data management and consumer account reconciliation. However, the ability to pay health care claims accurately and expediently dictates the need to ensure fraud is identified in a reliable and systematic way that guarantees legitimate transactions are processed appropriately. The presence of fraud in the health care system is indisputable. According to the National Health Care Anti-Fraud Association (NHCAA), up to 10 percent of all health care expenditures contain some element of fraud or misrepresentation, which calculates to a loss of nearly $240 billion annually.
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Given the facts of the problem and acceptance of the dilemma, as well as the industry’s past attempts to contain fraud, the issue remains more prevalent today than ever before. Why? Fraud programs have not been broadly embraced because previous attempts have not met the needs of the market, which is required to balance administrative efficiencies with contractual obligations, compliance requirements, as well as provider and member relations. In fact, according to a 2003 Gartner report, 45 percent of health insurers acknowledged they did not have an anti-fraud solution. Of the 55 percent that had deployed a solution, 80 percent were looking at the problem retrospectively and only 20 percent were addressing the problem prospectively. As a result, billions of dollars were either permanently lost through partial recovery settlements, or never identified in the first place. The purpose of this article is to describe ten key characteristics needed in an effective pre-payment health care fraud prevention program. The characteristics apply advanced principles of detection and disposition of fraudulent claims. By ensuring all of these factors are present in an anti-fraud solution, the industry will proactively detect and dispose of fraudulent medical transactions with greater proficiency while supporting the operational requirements of the insurers. w w w. p r o f i l e r m a g . c o m
expert
It takes a clinical
to find fraud.
By 2014 health care expenditures will
represent approximately 20 percent of the GDP
The characteristics of an effective anti-fraud program:
Reliable
— The outcomes of the detection and investigative conclusions must be reliable, and false positives in the identification of fraud need to be minimized. Not only is it inefficient to pursue and deliver unreliable outcomes, the effectiveness of the program depends on trust among the constituencies, and reliable findings are at the core of broad acceptance of the program’s recommendations.
Defensible
— The results of the program’s deliverables will be scrutinized by different parties, and it is imperative the actions given are supported by indisputable clinical, statistical, and quantifiable data. There are opportunities across the fraud continuum to populate fact-based decisions driven by statistically valid analysis, acceptable standards of practice, and sustainable clinical review. Make certain the proper quality-assurance procedures are implemented to strengthen the defensibility of every decision.
Systematic — Four billion medical claims are
submitted annually in the United States. Without advanced detection technology systems incorporated into the payment process, the task of preventing fraudulent claims from being paid will be overwhelming and adversely impact the health care system. There are several artificial intelligence
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technologies that can be deployed to identify fraud and that depend on the payor’s business, scale, and operational process. Regardless, a program that is absent of a systematic-detection function will be disadvantaged in its efforts to address the changing nature of fraud.
Automated
— As previously mentioned, the convergence of the financial services and health care industries has introduced automated technologies that are widely accepted — and even expected — in executing the operational requirements of payors. The detection and disposition of fraudulent claims needs to be included in the automated decisions. Market demands and efficiency necessities will mandate the automation of decisions. Guaranteeing the presence of the other characteristics mentioned in this article will promote the acceptance of automating the outcomes of the identification and resolution of fraudulent claims.
Integrated
— The Gartner report referenced above illustrates the lack of industry support for a nonclinical and unscientific approach to fraud prevention. The majority of the insurers surveyed by Gartner have chosen to either do nothing or employ limited retrospective tools. The market requires sophisticated and reliable detection solutions that are integrated into the existing operational processes of the payor that enhance — not hinder — the optimization of the claim payment.
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Dynamic — Because of the ever-changing nature
of fraud and health care, detection models must have the capability to learn and identify shifting patterns. The intelligence collected through ongoing analysis must be able to recognize nuances and subtleties within the data and interpret the likelihood of an emerging fraudulent trend. Applying predictive analytics that are dynamic and multidimensional will identify schemes proactively and allow for prevention and reduction of losses.
Comprehensive — To address fraud with the
greatest level of effectiveness, a comprehensive approach is best. Not only will the financial interests of the payor be maximized, but the value of the member’s experience will be improved. Quality of care will be enhanced if fraudulent providers are identified and removed and questionable practices are modified. The sentinel effect will reach across the health care industry if comprehensive approaches are consistently employed by the claims administrators. The use of detection technology, pre-payment claims disposition, retrospective recovery, and provider and member awareness all contribute to a comprehensive solution that brings important value to our society.
Clinical — Health care administration is clinical and disputed claims require review by clinicians. The core competency of any effective fraud prevention program dictates the involvement of clinical experts. The development of predictive models and automated decisions are dependent on the advice of medical professionals. Leveraging the results of clinical findings as they relate to fraud identification and investigations intrinsically strengthens the defensibility of the output and contributes to automating identical outcomes.
Collaborative — Fraud prevention is a team
sport and broad participation should be encouraged. Collaboration cannot be limited to internal groups and should include dialogue and partnerships with external trade associations and the public. Awareness of problems helps everyone improve the likelihood of preventing fraudulent activity, and the sharing of best practices within the industry assures that the effective handling of problematic claim submissions is addressed.
What’s more, applying disciplined educational outreach helps providers identify unintentional discrepancies that can be modified and helps eliminate future delays in the payment of their services. Claims administrators have several options on how to address the fraud that exists in the transactions they process. Some payors choose to address with internal resources, some outsource the detection and investigative functions, some take a hybrid approach, and some do nothing. What is clear is that the adjustments made to the market’s payment model over the years have not stopped fraud, nor has the advent of provider networks and usual and customary reimbursements. Adjusting the business model of health care has proven it will not stop the huge financial losses of fraud being perpetrated by a small number of providers. Fee-for-service and managed care models, indemnity and ASO business, providers participating in networks, as well as non-participating providers have all committed fraud. The surest way to reduce the negative economic impact and mitigate the risk of inappropriate care currently experienced through health care fraud is to deploy a program that contains the ten characteristics highlighted above. Rather than relying on limited retrospective tactics to combat fraud (the dominant choice today), the industry has the opportunity to use techniques that are comprehensive in the continuum of fraud prevention and recovery. Approaching fraud prevention as a program — and not simply as a single function — will enable payors to leverage a system that is reliable and integrated with defensible and automated results. This will not only improve payor relations with their members, but also have significant and immediate impact on the financial performance of their organization.
Educational
— Ongoing education and awareness of problematic practices is an essential characteristic of any anti-fraud program. As schemes change and market conditions transform, it is important that constituents be aware of the emerging trends so they can recognize problems and patterns before improper care or inappropriate payments are rendered.
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by Brian Smith
Let’s pretend you are the CEO of a fully insured health plan with 300,000 members and $1 billion in revenue. You have seemingly pushed on every area within the company, and some tough decisions need to be made to be able to meet the board’s expectations for the next year. You are leading a discussion with senior management on cost containment strategies. You have tasked each person with coming up with ideas that will help the company
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meet its fiscal obligation to the plan, the board, and, most importantly, to your members. You have heard from every associate of your senior management team, and the final two members to speak are your COO and CFO. Your COO presents a plan to reduce SG&A by 5 percent in the next year. Your CFO presents a plan to aggressively focus on preventing professional and outpatient claim overpayment and fraud by 2.5 percent.
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What proposal has the biggest impact on bottom line plan profitability, all else being equal?
Let’s Look at the math:
Plan Revenues
$1,000,000,000
SG&A Physician costs Out Patient costs Inpatient Hosp Pharmacy Other Services
$ 120,000,000 $ 330,000,000 $ 150,000,000 $ 200,000,000 $ 140,000,000 $ 50,000,000
EBITDA
$ 30,000,000
Here are the facts. A 5 percent decrease in SG&A produces $6 million in bottom-line effect — a significant impact if the COO will truly be able to execute on these savings. A 2.5 percent reduction in inappropriate claim payments because of abusive or potentially fraudulent provider behavior within outpatient and physician claims results in $12 million to the bottom line. As the CEO, you know that reducing the SG&A by 5 percent means less people doing more work. This will be difficult, but not impossible. Impacting the Physician and Outpatient claims payments by 2.5 percent will mean working differently to yield more results. So, as CEO, what do you decide to do? The answer is “both”. What area should you focus on first? The immediacy of preventing claim overpayments and fraud should begin quickly. Your best bet to solving this problem is taking advantage of your available resources of talented people and the latest technology. Ironically, technology has become both a blessing and a curse to claims processing productivity and accuracy. Many health plans believe that using technology to become more efficient is a good thing — and it is. The introduction of the Internet and other technology into health plans does provide solutions, but also it creates opportunities for a negative cause-and-effect to your bottom line. Electronic Data Interchange (EDI) and Internet claims processing increases efficiency. Yet, the more automated you make the process, the greater the potential for losses due to fraud and overpayment. As the cycle for paying professional and CPT coded outpatient claims reduces from days and hours to minutes and seconds, the potential for large sums of claims dollars to change hands quickly grows, as does the exposure for claims overpayment and fraud. This also limits human data-review by experienced clinical and claims coding experts. We hear many health plan professionals bragging about their auto-adjudication rates in the marketplace. While becoming more efficient is a goal of every operation person, confirming that the efficiency is making a positive financial impact should be the true
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aspiration. Fundamentally, a health plan should not get better at paying “inappropriate claims” faster. Even though most claims payors are operating on aging legacy systems, the good news is that new technology will add “business intelligence” without the cost or risk of having to replace the legacy environment. It is merely an enhancement to the tried-and-true platforms. Application Service Providers (ASPs) and SAAS web-enabled software (Software as a Service) are allowing health plans to use advanced analytics, similar to what the banking industry has used for decades, to apply rules-based logic in order to prevent overpayments and detect aberrant provider billing trends. The key is to use technology to do the large-scale, high-volume claim overpayment and fraud review on a post-adjudication basis. Highly skilled personnel can then focus quickly and efficiently on patterns and trends. By using prior member and provider level claim history on the 5 to7 percent of claims and 1 to 3 percent of providers from the system output, they can eliminate false positives that are on the low end of the fraud continuum. The real dollar savings from fully re-priced and adjudicated/to be paid claims come from this integrated process of preventing duplicate, up-coded, unbundled, and inappropriate modifier 25 and 59 claims combined with profiling providers administering services inconsistent with accepted clinical practices. This technological approach — when combined with a client’s claims and clinical investigative units — will deliver highly actionable and detailed cases for follow up and recovery to the health plan’s Special Investigative Unit (SIU) and claim level adjustment, allowing for and explaining the modification to the claim payment. The benefits of integrating fraud detection and investigative tools with post adjudication/prepayment claims/ overpayment prevention services include: • Acting as a deterrent when the health plan publicizes its use of advanced technology to fight insurance fraud and abusive coding • Ensuring uniform fraud and claim-overpayment prevention throughout the enterprise • Eliminating the unnecessary referral on non-fraudulent claims to the SIU • Allowing investigators to focus their efforts on providers and claims that require additional investigation • Measurable claims overpayment and fraud-recovery savings, which improve financial performance • Creating competitive advantage relative to other organizations that use less accurate processes of fraud detection and overpayment prevention As CEO of your organization, have you ever considered or measured what percentage of your medical loss
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ratio is associated with fraud and claims overpayment? What is the cost of doing nothing? If you do nothing, providers are overcharging or inappropriately charging your members. This is not only an expense to your health plan, but to your members, as well. It is a “double whammy.” Doing nothing is no longer an option. Yet, if an executive cannot see an identified cost problem, they assume there is no problem.
be your business partner in the management of implementation risks, the optimization of the value achieved, and the provision of value measurement and enhanced sustainability. Remember, fighting fraud and abusive billing practices is a continually evolving process — not a single event. Once fully implemented, it’s a win for everyone, including non-fraudulent providers, members, employers, and government.
Are you doing everything possible to protect your bottom line and customer assets from fraud and claims overpayments? If not, now is a great time to begin a review of your current payment practices to determine if there are dollars being paid that should not be paid. With a new year just around the corner and new budgets to be approved, reviewing the strengths and weaknesses of every person and process in your overpayment and fraud recovery departments will present opportunities for improvement. Identify these opportunities to improve by working with a vendor that can bring in subject matter experts to perform a fraud and abuse risk analysis based on your claims history to pinpoint areas of claims savings and benchmark against industry averages. This rigorous diagnostic process is critical for learning the unique circumstances present in your business model, as well as the all-important operational and cultural changes that need to occur within your organization. Once this diagnosis phase is complete, a customized implementation can be designed to attack the “low-hanging fruit,” educate providers, and reinvigorate the SIU and claims overpayment prevention staff with better data and more user-friendly tools. Your vendor should
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Dental Preventing
Fraud
10 Executable Strategies Identity theft is something each and
every one of us is aware of, especially as it relates to ATM and credit card fraud. If it hasn’t happened to you, then it has happened to someone you know. According to Celnet Communications, U.S. credit card fraud loss for 2007 was $3.2 billion dollars. Try using your credit card to buy gasoline three times in one day in the same general location. Or buy gasoline and a new cell phone and then go out to lunch during the same day. Most likely, your card will be declined because it is outside your typical buying behavior. It fits a theft pattern, and you will probably get a call from the credit card issuer alerting you of the situation. Yes, they know you will be upset that your card is declined if it is you who is using it, but they trust you will forgive them because they are protecting you. The credit card industry recognizes that fraud is a problem and proactively does what it can to create an environment that is not conducive to committing fraud. But what is being done about fraud in the dental benefits industry? Any dental consultant who has ever reviewed claims recognizes that dental plan providers inadvertently create an environment potentially advantageous to committing fraud. While the industry talks a good game about fraud control, little seems
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by Dr. Charlie Stewart
to be done internally to prevent it. The thinking seems to be, “Let’s track the bad guys down and do something about it…maybe.” The dental insurance industry does not condone fraud, but there are some things that might inadvertently make it easier for a dentist to perpetrate fraud. Here are ten essential strategies that every provider can incorporate to prevent fraud and abuse from occurring:
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ast a Wider Net: Broaden C Rules/Edits to Enhance Your Claims Editing Capabilities
Claim engines determine if dental procedures are eligible for payment, not if they were inappropriate from a fraud perspective. Some insurance companies have broad adjudication rules, and some do not. Some claim engines are limited by the number of rules they can accommodate; some can support a wide variety of rules. There is one thing we know: Those inclined to commit fraud will find the weak links in any claim payment system and exploit it if motivated to do so. Dentists will continue to search for and find ADA code combinations that will bypass claim engine rules to achieve the level of compensation they are w w w. p r o f i l e r m a g . c o m
looking to obtain, thus receiving payments for procedures that are eligible, but were either unnecessary, or never performed. One trend is the inability of many claim engines to identify potentially fraudulent billing patterns when multiple treatment categories are submitted on one claim. These include periodontal codes with preventive and diagnostic codes, periodontal codes with oral surgery procedures, and implant codes submitted with toothrelated codes. Likewise, we see a significant problem with inappropriate codes being allowed by dental specialists, because claim engines cannot differentiate by recognizing specialty billing patterns. The periodontist always gets paid for the panoramic radiograph, if eligible, but that film has little diagnostic value for periodontal diagnosis and treatment. Broaden and constantly enhance your claim adjudication rules and edits. Review your edits and rules and don’t consider the obvious — consider the absurd. Then you will begin to think “fraud prevention.”
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ook to the Past: Check L Claims Against Entire Claim History When Editing And You’ll Start Seeing Creative Billing Submissions
There is looking into history and there is looking into history. It is our recommendation that you look into history. There is certainly some degree of history lookup seen with all claims payment and we recognize different claim engines have different capabilities. For example, Dental Plan “X” has a stringent policy when it comes to allowing benefits for crown buildups (ADA Code D2950), but creative dentist Dr. Bob submits a similar code (ADA Code D2954) that is a prefabricated post and core, and it gets paid. Here is the problem: ADA Code D2954 requires a root canal to have been performed on the w w w. p r o f i l e r m a g . c o m
tooth. One was never done, but the history lookup for Plan “X” did not look for root canal history. The moral of our story: Build as much history lookup into your claim processing as you possibly can.
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rofile, Profile, Profile: Start P Profiling Provider Billing Activity, Not just Rules-Based Activities and Procedure Ratios
Many dental plans are big on profiling and many are not. As it relates to reducing fraud, we feel that many plans look at the wrong parameters. If you look strictly at utilization ratios, you may arrive at conclusions that have nothing to do with suspected fraud. Dentists with suspect billing patterns might do a large number of crowns. However, the “dentist’s dentist” might have an even higher ratio of crowns to something else. Profiling can be a useful tool to reduce fraud, but it must be dynamic (done daily), and you should consider billing patterns and procedure patterns. Detecting fraud is about identifying a behavior pattern that can be predicted by focusing on billing patterns and not by how many crowns per 1,000 patients are performed. Inherent in this profiling is the ability to analyze what this dentist submitted previously before he/she submitted a crown. The moral of our story: Build as much history lookup into your claim processing as you possibly can.
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how Me the Money: S Initiate Fraud and Abuse Recovery Efforts
Intellectually, we all know dental fraud is huge. The 2006 National Health Expenditures Report projected 2008 dental expenditures of more than $101 billion. The National Health Care Anti-Fraud Association Reports a 3
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to 10 percent loss of expenditures because of fraud and abuse. That’s up to $10.1 billion — larger in scope than credit card fraud. Dental insurance carriers have vastly different positions relating to collecting overpayments for any reason or performing subrogation. The carrier that does not pursue overpayments or perform subrogation opens the potential opportunity for overbilling or multiple billings without financial consequence to the billing dentist. We routinely see surgical claims submitted to both medical and dental carriers (often the same company) with little effort to collect overpayments. Some
generally represent one patient visit. If you allow two evaluations per calendar year regardless of time interval, you will see a provider submitting one claim for a comprehensive evaluation with full mouth radiographs and a periodic evaluation with four bitewings for the same visit. We also note oral surgeons submitting two claims for the extraction of four third molars, with two teeth and general anesthesia on one claim and two teeth and GA on another, thereby getting paid for general anesthesia twice. Again we recognize the role of auto-adjudication in holding down the cost associated with paying a claim; but too little
Don’t consider the obvious –
consider the absurd
dentists submit for porcelain fused to metal crowns to dental plans and then submit a claim to an HSA account because the dentist has told the patient that particular brand name crown is not covered by their insurance plan. Collecting overpayments and subrogation are time consuming, and collecting money retrospectively is always difficult. However, if not attempted, it can be exploited. It is more productive to prevent these things from happening by avoiding these situations prior to making payments.
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Take a Closer Look at the Numbers: Begin Measuring the Output of Auto-adjudication to Identify New and Emerging Trends
Where should you to start? We suggest looking first at auto-adjudication. Many people say that the auto-adjudication of claims is fraud’s best friend. Claim engines are rules-based systems developed to pay claims. They are not designed to detect fraud. Figuring out how to beat a claim system requires thought, but claim engines do not think. There are three disturbing trends with auto-adjudication that are conducive to committing fraud: Edits and rules are too narrow in scope and do not look deep enough into history (previously addressed). But perhaps the most significant and distressing is the practice of splitting claims. Splitting claims is the pattern of submitting multiple and different claims that
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emphasis is placed on paying the correct claims. Rather, the emphasis is to pay it correctly at the lowest production cost possible. Auto-adjudication should not be eliminated. However, some analysis should be done on what is being paid from a potential fraud perspective.
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Do a Diagnostic Claims Processing Exam: Find Your “Pain Areas”
Every claims processing organization has “pain areas” where policies and procedures are not as strong as they could be as far as fraud prevention is concerned. There is significant irregular billing and creative coding with ADA Codes associated with lower levels of compensation. It would seem that those engaged in these practices understand that they are flying below the radar. Here again, the use of split claims (multiple claim submissions) for diagnostic and preventive procedures is directly related to the adjudication logic associated with processing these claims and the fact that these procedures tend to be auto-adjudicated. Significant fraud dollars are continually found for low dollar procedures because they receive little attention, but their cumulative impact can be staggering.
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Show a Clinician Some Love: Get a Clinician Involved in Reviewing and Analyzing your Adjudication w w w. p r o f i l e r m a g . c o m
A dentist will see things dental claims processors or plan builders won’t and can help you improve your business practices. As dental insurance plans have had to deal with more cost-constraint matters, it would seem that there is an indirect correlation to the number of dentists who work in the dental-benefit industry. As costs go up, the number of dentists goes down. We believe that the same is true for fraud and abuse. As the dentist count goes down, fraud increases. Dentists who review claims are reviewing more procedures than claims. We seem to have forgotten that the human brain will see patterns it wasn’t looking for. By reviewing claims in their totality, we see patterns of treatment — rather than procedures — and become alert to potential problems. Likewise, plan builders seem to have little input on determining the logic used to adjudicate claims. While there are some truly skilled people who build adjudication logic, it takes a clinical expert to detect and help prevent fraud. More clinical input into the adjudication process will go a long way to reduce suspected fraud. There are external experts that can help with reducing fraud. The dental insurance industry should not be the dental police force. However, forming stronger relationships with the boards of dentistry in all locations where you do business will help make great strides in fraud reduction and decrease the perception that the dental insurance industry is “the dark side.”
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Scrub Your Provider Files: Consolidate and Clean Up Your Provider Files
Those of us who have been in the dental benefits industry have all seen this: We have the same dentist in our files with multiple variations of the same name and possibly different TINs. If you think Dr. Robert Smith is not the same dentist as Dr. Bob Smith, you might submit the same claim twice and get paid for both. Maybe you will catch it as a duplicate, but perhaps you will not. Clean up your provider files and cross-link multiple names and TINs to the lowest common denominator. It will reduce fraudulent submission and make 1099 time a breeze.
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Blend High Tech with High Touch: It’s Not All About the Technology
There is a reason why humans still take the UPS package off the truck and put it in your hands. As we like to say in our organization, it takes a clinician to spot fraud. While automating claims processing reduces the cost to pay a claim, the more automated a claims system becomes, the easier it becomes to submit creative claims. Administrative costs might decrease — certainly important in the
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ASO environment — but claim costs increase, which is a concern regardless of whose claim dollars are at risk. Computers do not think. Those who choose to commit fraud try to outsmart a largely automated process. Science has shown us that the human brain reveals patterns we were not looking for, as in abusive claim submissions. People are a critical component in detecting and preventing fraud.
year, the typical response is a blank stare and a whimsical smile. Nobody likes to report a dentist for suspected fraud. It is not a fun thing to do, and it comes with risk management issues that corporate counsel might not wish to take. Be that as it may, reporting suspected fraud is required by more than 30 states for federally funded benefit plans and state funded dental plans.
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If dentists are not being reported for suspected fraud, then there is no true legal deterrent for committing fraud. Dental plans are potentially at much greater risk by not reporting fraud.
Take Action/Pony Up/Take the Leap: Start Now!
If you are a dental plan affiliated with a health plan, you most certainly have a robust SIU unit that is busy addressing medical fraud. Dental fraud is often the tail end of the dog. Small dental plans often cannot afford a robust SIU unit and many do not have a fraud-recovery plan, which is often required by law. (Some do not even know it is a requirement.) Both situations are certainly understandable resource issues, but while all plans attempt to control claim costs armed with adjudication logic and consultant reviews, it seems little gets done with fraud. Most line personnel who identify potential fraud situations don’t know what to do with it, or feel nothing will be done, so it goes unreported. When asking a prospective client how many dentists they have reported for suspected fraud during the last
The biggest problem with dental fraud is that insurance companies are not taking action with the suspect information they have regarding suspect dentists. With up to $10 billion in total losses per year and up to 10 percent of your annual outlay, you can’t ignore this problem any longer. Get a budget, formulate a plan, and put a team in place. ROI is always positive, and you’ll be ahead of the curve. . There are a number of opportunities that the creative provider can take advantage of if so determined. The items identified vary greatly from plan to plan, but any efforts to make improvements in these categories will all have an impact to assuage fraud. Regretfully, there are those dentists who will continue to do the wrong thing. It should just be harder to do so.
Nobody likes to report a
dentist for suspected fraud
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Same
Smoke
Different by Dr. Barry Johnson & Debi Behunin
Fire
T
he rising demand for health care fraud detection and prevention technology in the government and commercial payor markets is no surprise to industry experts and organizations. According to the National Health Care Anti-Fraud Association, up to 10 percent of the nation’s annual health care outlay is lost to fraud and abuse. With health care spending projections of $2.4 trillion for 2008, the health care fraud challenge has an estimated total cost between $72 billion and $240 billion. This staggering financial loss potential has prompted many payors to investigate and implement sophisticated pre- and post-payment fraud and abuse solutions. The aim of any effective fraud detection program is to identify and reduce suspect and fraudulent billing activity, decrease unjustified financial outlay, and offset rising health care costs. In today’s business environment, a robust fraud, abuse, and overpayment prevention solution relies on rulesbased and predictive analytics to pattern and pinpoint suspect and fraudulent provider, facility, and patient activity. While fraud detection solutions are more prevalent within the health care payor market, solutions designed to identify and prevent fraud in the medical bill component of property/casualty claims remain limited. Medical fraud is dynamic and often invisible, so a reliable and proven process for accurately detecting, reporting, and tracking providers with aberrant billing patterns is a necessity. To accurately and efficiently identify and prevent fraud in medical bills is a complex undertaking. It requires a combination of tailored — often proprietary — software, robust rules and sophisticated analytics. However, the use of software and technology alone cannot mitigate the fraud problem. The key is to incorporate clinical expertise and intellect with software tools to validate and accurately target those providers warranted for further review. This clinical validation review process allows for greater efficiency and accuracy in identifying and targeting medical bill fraud. w w w. p r o f i l e r m a g . c o m
Fraud schemes continue to plague the insurance industry: stolen physician/patient identities, phantom providers and patients, up-coding, unnecessary cosmetic services, false bills, exploitation of benefit plans, unnecessary diagnostic services, anesthesia abuse, overtreatment, stacked diagnoses, and high fee services. Furthermore, new schemes are being devised every day. Insurers can no longer continue to isolate the identification of suspect and guilty providers. It is increasingly apparent that fraud and abuse in both property/casualty medical bills and health care claims are likely being perpetrated by the same providers. Leading-edge insurers are looking toward a shared database of known and emerging schemes and the providers who perpetuate them in both health care claims and property/casualty medical bills. The industry needs to move toward centralizing the knowledge base of fraudulent providers in both health care and property/ casualty insurance to recognize the true extent of fraud by any single provider. Such a common repository can be a powerful deterrent of fraud for any type of medical bill. A shared and maintainable database of known offenders and their specific schemes is an important fraud mitigation step. Property/casualty fraud is a growing multi-billion dollar problem and requires tailored solutions to meet the unique business challenges faced by insurers. Applying proven concepts from the health care payor market to the medical bill component of property/casualty will provide opportunities to detect and uncover fraud schemes. In addition, the creation and maintenance of a shared database of known schemes and offenders can be a powerful step in the fight against fraud. This shared perspective enables a more targeted and robust prevention effort.
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The
Oven Profiler’s Experts Heat Up Your Marketing
The Do’s & Don’ts of Presentation Creation M
icrosoft’s PowerPoint is by far the most popular presentation software program used in business today. Despite the increased use of presentation software in both internal and external sales and educational settings, most presenters (and marketers) fail to maximize the impact of the company’s presentation and message. This results in the continued generation and delivery of lousy presentations and a severe case of boredom for the audience. There is a “presentation revolution” occurring in marketing today. There is no greater ambassador of this movement than Garr Reynolds, author of Presentation Zen. According to Reynolds, for a presentation to be a success, it must be short, simple, legible, and engaging. You can “heat up” your presentation by adhering to the simple guidelines outlined in this article.
Do
purchase the most current version of PowerPoint 2007. New features and functions make stylizing your presentations easy.
Do
trash your current template and create a unique presentation for each opportunity. Your presentation should have a structure (introduction/objectives/conclusion) and content that is exclusive to your audience.
Don’t
equate quality with quantity. Your goal should be five words or less per slide and zero bullet points. If someone can read your slides and understand all that you’re going to say, why are you speaking?
Don’t
brand every slide with your logo, or your client’s logo. It’s “noise” and takes away from the impact of your message. A simple elegant design scheme will speak for itself.
Don’t
insert clip-art. Negative association with clip-art is strong and can immediately detract from your presentation and message.
Don’t
use unusual fonts. Fonts such as Comic Sans and Cookies have no place in your presentation. Again, this creates more noise as well as a formatting nightmare.
Don’t go overboard with animations and transitions.
Transitions and animations can be powerful tools when underscoring a position, but refrain from using transitions for every slide.
Good
Do
simplify your messages. Focus on one statement per slide. Create “sticky” messages, which according to the authors of Made to Stick, have six key attributes: simplicity unexpectedness, concreteness, credibility, emotions, and stories. Think of unique ways to drive your point home.
Do purchase and incorporate quality royalty-free pho-
tography, such as iStockPhoto or Dreamstime. For free images, try Microsoft Design Gallery Live.
Do
spend time with page layout, chart, and graph. How your presentation looks is just as important as what you have to say.
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Bad w w w. p r o f i l e r m a g . c o m
Don’t
Your New
e-lodex? by Scott Klososky
“W
hat is an eCommunity?” It is a question I hear often, and it is usually followed by an answer that does little more than scrape the surface of this powerful tool. The term eCommunity has been used to describe Facebook and MySpace type networks, but this is a limited view of what has the potential to be a very powerful business networking and marketing tool. Each of us has the tools to create a network (or community) of contacts and connections that is aided — or even driven — by technology. Your eCommunity is what used to be defined as your rolodex of personal relationships you could contact by phone or in person. The Internet has now provided a way for us to completely redefine our “business/personal community,” and more important, how we nurture and grow it. By making a conscious effort to leverage the new tools available, we can take dramatic strides in reaching our business goals.
“How do I begin?” Sign up for Plaxo Pulse and use it to keep your contacts up to date. Sign up for LinkedIn and use it to formalize your network contacts and connect to their contacts. Build a Facebook profile and use it to communicate in a deeper way with your regular contacts. What’s more, this is a great way to introduce yourself to new contacts. Join an industry eCommunity that puts you in the stream of conversations about your industry. These four communities will provide you with built-in tools to build and manage your community. For example, LinkedIn allows you to contact prospects with a warm invite instead of a cold call. Plaxo Pulse
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automatically keeps your contacts updated, so you never lose anyone and are always notified of useful data, including work anniversaries and birthdays. Facebook applications allow you to update your activities and projects so your “friends” (business contacts) can keep track of your progress and remain up to date on your professional projects.
Don’t be left on the
sidelines
Business people who have invested in this new technology are seeing a significant return on investment. Recently, I helped a second-level contact gather information for a professional presentation. He was looking for stories from people who had recently experienced bad customer service. By reaching out to his eCommunity, he was able to gather the information he needed by sending one email. I also had success myself using LinkedIn to track down a former board member with whom I had lost contact. Upon reconnecting through LinkedIn, I called her, filled her in on my latest activities and was able to re-establish an important business relationship that will assist me with a current opportunity I am working on. You, too, can have such success. Find some time over a weekend to set up your profiles, and get yourself started. Then set up a meeting with yourself for 15 minutes twice a week and take the time to further bolster your online presence and strengthen your eCommunity. Don’t be left on the sidelines with only your Outlook contact list as your eCommunity. It takes only a small investment of time to have a tool that you can leverage for great results.
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