Complex Made Simple

How ME companies should fight health insurance fraud

Healthcare fraud and abuse are big problems with even bigger consequences – so what can we do about it? One of the most effective ways for a company to combat the abuse of the system is by educating its workers.

Employees need to be aware of:

* Their insurance benefit schemes.

* The problem of fraud and abuse.

* How fraud and abuse impacts benefits.

* How to spot fraud and abuse during a consultation or while signing forms.

Psychological research shows humans to be more sensitive to losses than gains, so knowing what is at stake will motivate your employees to keep an eye out for fraud. Below is a four point checklist that we should all keep in mind when visiting a clinic, hospital or pharmacy, and which can also be used to confirm claims with employees.

1. Check all forms: Any form requiring a signature should be thoroughly checked, but be especially aware if you have to sign more than one. Ask questions if there is information missing or one of the forms is blank; for example, if the diagnosis is left off or you are told the form will be ‘filled in later’.

 2. Check the diagnosis: Always confirm the diagnosis and correlate this with the information on the form. A false or inflated diagnosis is known as ‘up-coding’ and it’s seen more commonly where an individual or institution has more opportunity to take advantage of the system, such as in private hospitals.

In 2003, a study published by Dartmouth College in Massachusetts used data from the US Medicare system to assess up-coding in for-profit and not-for-profit hospitals. It found that over a seven-year time period the shift to the highest diagnostic groups (worsening health with increased costs) increased by 10 per cent in the not-for-profit hospitals but 23 per cent in the for-profit hospitals. The differences couldn’t be accounted for by changes in the health status of patients or efficiency of billing practices, just that the financial goals of the hospitals were different.

 3. Question the treatment: Confirm the reason for tests or scans before having them, especially if they appear unrelated to the condition. Also ask why a branded medication is being prescribed when generics are often available. Overuse of expensive equipment and branded drugs is a big problem in hospitals all around the world. One study in The American Journal of Managed Care found that 30-50 per cent of all lower back MRI scans in one US hospital were unnecessary, especially as most back problems clear up within a couple of weeks. The researchers suggested that the primary reason was the practise of ‘defensive medicine’ by doctors who feared being wrong. However, it was also noted that, in a different healthcare environment, ‘financial incentives may exacerbate the problem’.

4. Question the need for a medical card: Alarm bells should start ringing if medical card information is requested when paying by cash, or if special discounts are offered in exchange for your medical card details. This information is only required if a claim is going to be made.

(By Simon Stirzaker, Regional Leader, Health & Benefits at Al Futtaim Willis, UAE. He came to the Middle East in 1994 where he was instrumental in the shaping and development of the health insurance market in both the UAE and Saudi Arabia and has over 20 years’ senior management experience in the region. Prior to Al Futtaim Willis, Stirzaker was the Regional Head of Development & Strategy for Middle East at the Royal Bank of Canada. He holds a BA degree in accounting and finance from Birmingham University, UK.)