Fraud Prevention Program Axed in Health Reform Plan

Cheryl Clark, January 15, 2010

The effort should recognize "that fraudulent activity in the health care system can affect both public and private sector health insurance coverage and that the prevention, detection, investigation and prosecution of fraud against private health insurance coverage is integral to the overall effort to combat health care fraud," the proposed legislation said.

The council would have evaluated "ways to ensure that private health insurance coverage is included in investigative and data sharing programs, to the maximum extent feasible" with protections for sensitive information about criminal subjects or targets and law enforcement efforts. "The information sharing should be one that recognizes that private coverage may be responsible for fraud, waste and abuse of public and policyholder funds."

Most of the time today, Saccoccio says, it's the private plans that tell federal agencies about suspicious or proven fraud. "That's not to say the public side doesn't share information too, but they're more restrictive. Sometimes they'll come to us and say we're investigating a particular provider and we want to see if any of their providers are committing fraud against a private insurer."

For example, Saccoccio says at an association meeting several years ago, private health plans relayed to federal officials a Southern California "Rent-A-Patient" scheme. Federal officials prosecuted several surgical centers that recruited patients to undergo unnecessary gynecologic, nasal surgeries or "sweaty palm" surgical procedures in exchange for money so the doctors could bill health plans over $1 billion, according to federal officials.

"Quite frankly, when the federal government goes after this stuff with strike forces, they're going to win," Saccoccio says.

In other examples, government and private payers came together to share information about fraudulent home infusion in South Florida, in which providers set up clinics that obtained patient identifications to file false claims, a scheme that led to many convictions, Saccoccio says.

Saccoccio's group wants a more formal structure of cooperation "incorporated into healthcare fraud efforts and reform legislation, so it's clear what is expected, and so each payer is alerted as soon as possible to new fraudulent activity."

Of course, questions would remain, such as when during the course of an investigation the disclosure is appropriate, and whether health plans would want to share information that could potentially benefit a competitor.

"A coordinating council is something we've always supported and pushed, and we will continue to do so," Saccoccio says. But he adds that in the end, for private and public payers to tell each other about fraud, even at the stage when activity is merely suspicious, does not require legislation.

"It's the reason this organization exists, to have private and public sectors sit down side-by-side and share."

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