Fraud Prevention Program Axed in Health Reform Plan

Cheryl Clark, January 15, 2010

A Senate plan to create a system in which government agencies can inform private health insurers about fraudulent providers and their schemes—and vice versa—was a victim of the lawmaking sausage factory, although advocates say that it could prevent millions if not billions of dollars lost in scams.

The federal Healthcare Integrity and Protection Data Bank Web site reports that healthcare fraud losses range from 3% to 10% of all healthcare expenditures.

The provision, which was written in the Senate Health, Education, Labor and Pensions (HELP) committee's bill this summer, would have established a structure for sharing suspicious information in hopes of reducing healthcare fraud.

For example, a health plan might tell the feds about a fraudulent wheelchair sales operation. Conversely, investigators for the Centers for Medicare and Medicaid Services could let a health plan know a provider was engaged in a pattern of diagnostic upcoding.

Health plans and government agencies now share information, but on a voluntary, informal basis, often through conferences or occasional meetings through the National Health Care Anti-Fraud Association, says Louis Saccoccio, the group's executive director. The group has 85 health insurance companies who are members, and already share information with each other and the federal government on a regular basis.

Saccoccio says that so far, such cooperative discussions have uprooted scams that would have otherwise cost payers "in the millions."

Robert Zirkelbach, spokesman for America's Health Insurance Plans, expressed a similar view, saying "government has a very poor track record of uncovering fraud and abuse," but health plans are regularly sharing what they know through the Healthcare Integrity and Protection Databank.

It couldn't be determined why the Senate HELP Committee's proposal wasn't incorporated anywhere in the 2,409-page Senate reform bill, except to suggest that the bill was already too massive.

Specifically, the HELP bill would have established a "Health Care Program Coordinating Council," which would "develop a strategic plan for improving the coordination and information sharing among Federal agencies, State agencies, and private health insurance coverage with respect to the prevention, detection and control of fraud waste and abuse, including fraud and abuse of consumers of the health care program or private health insurance issuers," according to the legislation.

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