What Highmark reveals about fraudulent billing claims

Health insurer Highmark Health said it saved more than $245 million last year by rooting out fraud, waste and abuse that quickly angered doctors.

The Blue Cross Blue Shield Association requires its 35 member companies to have such programs to detect illegal claims, but it does not publish aggregated results publicly. Pittsburgh, Pennsylvania-based Highmark said it wants to be open about the savings its program is generating, which has been worth nearly $1 billion since 2017.

“We think it’s important to help our consumers really understand what we’re doing to help them lower their healthcare costs,” said Kurt Speer, vice president of Highmark’s Financial Investigations and Vendor Reviews.

At first glance, fraud detection may not seem controversial. But Highmark’s report highlights tensions between insurers conducting what they see as routine claims reviews and insurers who see the effort as overly aggressive and cutting into their revenues.

Highmark’s report provoked a sharp reaction from the influential American Medical Association. AMA President Dr. Gerald Harmon said in a statement that fraud and abuse efforts must be guided by transparent rules that distinguish intentional fraud from accidental or accidental billing or coding errors.

“Health insurers should not be allowed to subject practices to burdensome administrative processes or intimidate doctors who are simply victims of convoluted, complex and opaque health insurer payment rules and requirements,” Harmon said.

Most of what programs like the Highmark program uncovers are routine billing errors, according to Nathan Ray, partner at West Monroe in health and life sciences, most of what is revealed by programs like the Highmark program: a former member changed jobs or the bill had to be sent to an auto insurer. . The Highmark numbers would be more useful if they showed the proportion of accidental billing errors versus intentional fraud, he said.

Ray noted that the AMA publishes content to help physicians understand how to properly fill out applications.

“So they themselves understand that there is an appropriate decorum for how you handle a claim, and if these things are not met, the claim should not be paid or at least should be considered,” he said. “That’s, by and large, where those dollar numbers come from.”

According to Haymark Spear, the vast majority of cases his program finds are simple billing errors. For example, a medical practice that provides an incorrect code makes the claim invalid.

However, the COVID-19 pandemic has prompted a number of suppliers to come up with schemes to inflate reimbursements, Speer said. Some have opened COVID-19 testing sites or vaccination clinics, but billed for additional services such as expensive respiratory panels. Others have demanded that patients become members of their practice in order to receive COVID-19 shots, he said.

In real fraud cases, Highmark engages law enforcement, Speer said. If the problem is drug-related, the company works with the Federal Bureau of Investigation or the Drug Enforcement Administration. Highmark said his findings have resulted in 94 arrests, charges and convictions in 29 states since 2014.

Of the $245 million saved by Highmark through the program in 2021, about $152 million came from employer-sponsored insurance, $49 million came from the Blue Card program, which gives Highmark customers access to the national Blue Cross Blue Shield networks, 19 million dollars from Medicare. Benefit: $16 million came from Affordable Care Act exchange plans and $9 million came from the Federal Employees Program. Most of the 2021 savings — $184 million — was from fraud, waste and abuse in Pennsylvania. Another $25 million was linked to cases in West Virginia and $23 million in Delaware.

The Highmark program has been running for at least 15 years and saves about $200 million annually, Speer says.

He added that Highmark’s annualized return on investment is roughly eight to one for its fraud team of about 80 people. Highmark’s 2020 revenue was $18 billion.

Eight to one is a “very good” return on investment for a scam program, said Adam Block, an assistant professor of public health at the New York College of Medicine, who also runs a return on investment consulting practice. According to him, four to one is the “minimum threshold” at which it is worth continuing the fraud program.

It’s no wonder Highmark is making its results public: they demonstrate the value the company delivers to consumers, Block said.

“When you weed out fraud in the claims process, you lower insurance premiums, you show service providers not to try this with your organization, otherwise you do it so that you will be blamed for it,” he said. “I’m not surprised they issued a press release because no one really supports scams and abuse.”

However, it remains an open question whether all of the items mentioned by Highmark are real examples of fraud, waste and abuse, Block said. Let’s say a provider does a lot of MRIs for lower back pain. He added that even though this practice is not supported by scientific evidence, this does not mean that it is not subject to payment if the provider considers it necessary.

“These may have been legitimate expenses that were detected by the Fraud, Waste and Abuse Detector and the claims were denied, but the use was not fraudulent,” Block said.

Spear touted Highmark’s use of artificial intelligence to identify potential examples of fraud, waste, and abuse. The insurance company also has a team of medical professionals and coders who review any claims flagged by the program.

AI and machine learning are valuable tools, but West Monroe’s Ray said these cases still involve real people reviewing and reviewing claims.

“I think these tools are important, but the idea of ​​AI is no different than the idea of ​​being able to identify things that need to be tested,” he said. “Nothing that happens with the help of AI creates an activity that is completely devoid of human participation due to fraud, waste and abuse.”

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