The New Jersey insurer said its fraud fighting efforts included both detective work and analytics. Nationwide, fraud prevention relies increasingly on predictive modeling to keep suspicious payments from ever going out the door.
Anti-fraud efforts by New Jersey’s largest health insurer yielded $43.2M in funds recovered and losses avoided, according to a statement released Wednesday.
Horizon Blue Cross Blue Shield of New Jersey, which covers 3.8 million people, said its Special Investigations Unit opened 988 new cases in 2015 to combat healthcare fraud, and highlighted a serious problem it called the “phantom doctor’s office.” So far this year, it has referred 187 cases to the Federal Bureau of Investigation or state enforcement agencies.
The insurer said the “phantom” office has been seen elsewhere, in known fraud hot spots such as Florida and Texas, and has now surfaced in New Jersey. Horizon’s statement described these enterprises as “shell offices in which fraudulent providers submit bogus claims for reimbursement, then dissolve and vanish.”
“A phantom office can submit claims using stolen member identification numbers, so it is vitally important for Horizon members to protect their insurance identification number, much like they would protect their Social Security number,” said Douglas Falduto, vice president of Administration and Horizon’s chief security officer.
Falduto said the insurer is making recoveries and avoiding losses through a combination of detective work and enhanced analytic tools; the US Department of Justice (DOJ) and HHS recently highlighted the advance of predictive modeling in a nationwide sweep that netted 301 arrests and $900 million in false billings.
CMS Acting Administrator Andy Slavitt has touted the importance of modeling in fighting fraud. A year ago, he said that investments in Medicare’s Fraud Prevention System had allowed the federal government to move away from the “pay and chase” model and halt $820 million in improper payments before they went out the door over a 3-year period.
At Horizon, this predictive approach is seen when investigators spot the “Impossible Day,” in which a doctor bills the insurer for dozens or even hundreds of patients who all were reportedly seen on the same day.
Fraud takes many forms. Sometimes patients are victims—their insurance cards or numbers are stolen and used to bill for bogus diagnoses, services that were never rendered, or services not furnished as billed, a practice known as “upcoding.” The most egregious cases happen when patients are treated for conditions they do not have, or are prescribed medicines they do not need.
Sometimes, however, beneficiaries are in on the fraud, and they provide their healthcare cards or numbers to get a share of the reimbursement, or a “kickback.” According to the DOJ, some licensed clinicians use recruiters to obtain healthcare cards or numbers from beneficiaries in exchange for kickbacks.
Other types of fraud occur when consumers use a false healthcare ID number, submit a false claim, or misrepresent someone as a dependent on their policy to get them coverage. This is why some physician offices now ask to see a form of photo identification along with an insurance card, especially when treating a new patient.
In today’s statement, Horizon said consumers can take several steps to help fight fraud:
· Review the Explanation of Benefits (EOB) statement after a healthcare visit to make sure the services billed were the same ones received.
· Keep insurance cards in a safe place, and destroy old cards.
· Report suspected fraud.