Utilizing Good Data to investigate fraud, waste, and abuse

Updated: Jan 23



No matter what your profession, it’s painfully evident that healthcare costs are out of control. From skyrocketing premiums, to erroneous payouts, the healthcare world is confusing, and without the right help, can be ripe with fraud, waste, and abuse. Luckily, this is where Scott Ward and the team at Health Integrity LLC come in. With a team of 75 investigators nationwide, Health Integrity provides data-driven analysis for the healthcare industry, with a particular eye on fraud, waste, & abuse.

Here at Healthcare Simplified, our aim is to help you better understand the sometimes confusing landscape of the healthcare industry, and Scott was kind enough to sit down on a recent episode and talk about a number of things, including the criticality of good data, transparency in the marketplace, medical review & analysis, & common schemes that are all too prevalent in the industry.

The Criticality of Good Data

The importance of not just data, but good data, cannot be overstated. When you are dealing with something as crucial as an investigation into health care fraud, waste, & abuse, you have to be sure that you are making decisions off of the best possible information.

This doesn’t just mean using the data to make decisions in an office.

Take the data that you have, then do patient interviews. Did they actually get the service that the plan was billed for? Did they actually see the provider that is making the claim? Use the data to interview the staff at clinics and labs. Is what you are seeing in the data accurate? Maybe the plan was billed for an MRI, but the facility doesn’t actually have an MRI machine, or they referred the patient to a different clinic, but still billed for the service. Having investigators in the field that can take the data and validate it and confirm its truth will lead to less waste, less fraud, and increased transparency. But how is that done?

Performing Medical Review & Analysis

Health Integrity not only employs investigators, but teams of registered nurses, as well as physicians from various fields and specialties. Their task is to do medical reviews and analysis of records to ensure that they are documented properly to support the types of claims that have been submitted for payment.

A majority of the time, claims are paid and forgotten. The provider bills the plan, the plan pays, and life goes on. It really is a trust based system, but unfortunately, people aren’t perfect, and occasionally, people do violate that trust.

Maybe it’s intentional. Maybe the provider knows they can get away with billing for services not rendered, or billing twice for a service that was only provided once. More often than not however, the problem is likely an issue of education and training. Maybe the clinic staff aren't aware of what appropriate documentation needs to be made in order to support a claim. Having a team of RNs and physicians to do medical reviews of those records will highlight where there is fraud, and where there is simply need for education and awareness.

Creating Better Transparency in the Marketplace

Let’s face it. The healthcare industry is known for a lot of things, but transparency isn’t one of them. Everyone has heard the stories of trying to get a straight answer from a provider about how much a service costs, or an answer from the insurance company about what they will cover.

Health Integrity highlights that as much as fifteen to twenty five percent of claims could be identified for fraud, waste, & abuse. Think about that number.

When payers or plans find out that roughly one fifth of what they’re paying out is either fraudulent, abusive, or erroneous, they are obviously far more likely to want to rein that in. When you put some analysis on the data and look at claims patterns, perform medical records analysis, and do on site audits to target the quality of care, you begin to cut down on the erroneous, as well as get a little more transparency.

Imagine it this way; if you could keep even half of the erroneous payments from going out the door, that’s ten percent. What would it look like to save ten percent on a self funded health plan? The savings are astronomical.

Pay & Chase vs Prepay

Traditionally, an insurance claim is paid, and then the insurance company chases down the documentation to make sure that the claim was legitimate. Granted, most insurance companies have a short delay in payment to help alleviate fraud or mistakes, but they still pay and chase.

According to Health Integrity, if a claim is paid erroneously, there’s less than a five percent chance of recovering any of the funds that were paid out that should never have gone out the door. This is a problem.

With a prepayment review, the claim can get reviewed in depth before payment is ever released. Does the claim meet the criteria of medical necessity? Is there appropriate documentation for the type of claim? Having someone who can perform this type of service for your company could save you a substantial amount of money, because those erroneous payments will never go out the door in the first place.

Common Schemes in the Industry

Knowing the common examples of fraud, waste, & abuse will give you a better idea of what to look for. Obviously there are a plethora of ways this could take place, but here are just a few

Unbundling

This occurs when a patient needs a service that may contain a number of smaller services. The service is supposed to be billed under one all inclusive code, but the provider knows that they may be able to get paid a bit more by unbundling those services and billing them separately.

Upcoding

This is when someone comes in for a specific service, but the provider bills the plan using a higher code, even though the individual may not meet the criteria for the higher code.

Over-utilization

Some providers will administer the same set of services to every patient that walks in the door, no matter what the symptoms are. Maybe the patient has a cold, but the provider orders labs and blood test even though it’s not necessary for that particular ailment. Again, this is a problem that needs to be brought to attention.

It’s evident that having a team like Health Integrity on your side could prove invaluable to your business. If a self insured employer spends $20M a year, and fifteen to twenty percent of that is erroneous, that’s a four million dollar savings that could be realized.

If you want to learn more about Health Integrity or enquire about how they might best be able to help your business, you can find them online at healthintegrity.org

This post is based on an interview with Scott Ward from Health Integrity LLC. To hear this episode, and many more like it, you can subscribe to Healthcare Simplified. If you don’t use iTunes, you can listen to every episode by clicking here.

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