Detectors of Fraud, Waste & Abuse
Part of the Program Integrity & Investigations Department
ENTERPRISE INVESTIGATIONS
EMERGING HEALTH CARE FRAUD
TRENDS & SCHEMES
Emerging Trends in Health Care Fraud and Economics for
the Investigator
ALANNA LAVELLE,
MS, AHFI, CPC
DIRECTOR, ENTERPRISE INVESTIGATIONS
SPECIAL INVESTIGATIONS UNIT
Special Investigations Unit
SIU West
California
Colorado
Nevada
SIU East
Connecticut
Maine
New Hampshire
New York*
Virginia*
SIU Central
and South
Georgia
Indiana
Kentucky
Missouri*
Ohio
Wisconsin
*New York: service area covers 28 eastern and southeastern counties
*Missouri: service area excludes the 30 counties in the Kansas City area
*Virginia: the service area is all of Virginia except for the City of Fairfax, the
Town of Vienna, and the area east of State Route 123.
Coordination of Duties: Regional SIUs
Each regional director is focused
on FW&A in their region
• the regional SIUs perform targeted
investigations of professional
providers, vendors, and facilities to
avoid dollars being paid
inappropriately
• make overpayment demands and
law enforcement referrals
• negotiate resolutions, liaison on
criminal cases
General Activities to Accomplish Mission
• Targeted investigations
• Broad studies/initiatives
• Data mining/predictive
modeling
• Internal and external
outreach
• Compliance
• Fraud and abuse training
• Flagged provider/Pre-pay review
• Investigators attend fraud conferences and other training
yearly through NHCAA, ACFE, BCBS Association, etc.
Who We Are: Background & Approach
• Dedicated SIU function
since 2004 between
• Involves all lines of
business
• Cases approached, in
this order:
• Criminal
• Civil
• Administrative
• Utilize, IBM-FAMs and
McKesson-FICO
InvestiClaim predictive
modeling analytics
• Identify high risk areas for
fraud by predictive
modeling, analytics, rule
based analytics and data
mining
• Maintain a 24-hour Fraud
and abuse hotline, which
is answered by live
associates and led by an
investigative analyst who
trends the referrals
• Associates experienced
and training include:
• physicians
• attorneys
• medical doctors and
chiropractors
• retired FBI and secret
service
• retired Office of the
Inspector General, U.S.
Department of Human
Services
Who We Are: Fraud and Abuse Team
Special Investigators
• Former law enforcement officers (from
the FBI and local law enforcement),
attorneys, and health care industry
professionals
• Perform targeted investigations of
providers—doctors (i.e., professionals),
vendors, and facilities—to avoid incorrect
payments; make overpayment demands and
law enforcement referrals; liaison on
criminal cases, as appropriate
Clinical Investigators
• Provide clinical support to the SIU,
Enterprise-wide, and proactively identifies
clinically-related fraud and abuse through
data mining analysis and audits
• Comprised of a physician, a chiropractor, a consultant podiatrist, and 6
registered nurses with strong medical management background,
primarily in medical claim review
Data Analysts
• Complete complex data mining related to cases and large-scale
initiatives
Sources of Fraud, Waste & Abuse
(FW&A) Cases
• Internal referrals
• Fraud hotline
• Web reporting
• External sources
• Other plans
• Law enforcement
• Anti-fraud association/anti-fraud association alerts
• Fraud detection software – VIPS, Stars, IBMFAMS, McKesson’s InvestiClaim
• Regional blue plans information sharing meetings
• Task force meetings
Fraud, Waste & Abuse Continuum
Creating consistency in the processes…
Identify
Audit
Investigate
Intervene
‣ Identify suspicious provider behavior
via automated and non-automated data
analysis
‣ Collaborate with other business units
to identify areas FW&A should focus
efforts to reduce overall Cost-of-Care
‣Audit providers using consistent methodology and
consistent assets
‣Medical records requests
‣Consistent clinical/coding assets
‣Investigate using a consistent workflow and consistent
process
‣Collaborate and interact with providers consistently
across markets
‣Intervene with providers across markets in a consistent
manner
‣criminal/civil referrals to government agencies
‣change-in-behavior
‣settlement agreements/recoveries
‣pre-payment review
‣savings calculations
Emerging Trends and Schemes
in Health Care Fraud
• Medical identity theft
• Experimental/
investigational coding
misrepresentations
• Kickback
arrangements
• Upcoding
• Medical necessity
(factor cases, etc.)
• Foreign claims
• Facility fraud
• Dialysis fraud
• Chiropractic and podiatric fraud
• Durable Medical Equipment (DME) fraud
Trend: Medical Identity Theft
Examples
• An individual’s purse
or wallet is lost or
stolen and the thief
or person who finds it
uses the individual’s
information to obtain
medical goods or
services
• An individual “loans”
an uninsured friend
or family member
their medical ID
information so that
they may receive
medical goods or
services that would
otherwise be
unavailable to them
Scope of Problem
• Accounts for approximately 3% of all identity
crimes and is 10 times more expensive
• Average payout for regular identity theft is
$2,000
• Average payout for medical identity theft is
$20,000
• Experts estimate 3% of all health care costs
($60 billion) is the result of fraud; of that 1%
($600 million) is attributed to medical identity
theft
• According to World Privacy Forum, stolen
medical information has 50 times more street
value than a stolen social security number
• Street cost for stolen social security number
is $1.00
• Street cost for stolen medical identity
information is $50.00
• Anyone with medical insurance is a potential
victim
Diagnostic Testing
• Hidden provider ownership of labs and radiology
• Increase in expensive genetic testing
• Kickbacks to Doctors for ordering unnecessary labs
• Social targeting through health fairs, mail, internet,
shopping malls and “health screening” and useless
diagnostics tests
• MRI/CT Scans in hospitals and clinics: Hospital often
needs a high volume of procedures to pay for the
expensive equipment
• Allergy testing:
•
Unnecessary IgG/IgE food allergy testing
•
Aggressive screening from doctors office resulting in excessive
billing for immunotherapy serum
Billing for Services outside the U.S.
• Fraudulent claims from West African nations, mainly
Nigeria
• Experimental/Investigational Cancer Therapy for end
stage cancer patients treated in Mexico, Italy, Portugal
and Switzerland
• Submission of billings as though work was performed in
the US
• Air Ambulance claims from foreign country back to United
States often in excess of $1 Million US
• Cosmetic Surgery procedures from Colombia, South
Africa and Mexico – billed as significant conventional
surgeries – Hernia Repair for “Tummy Tuck”; Septoplasty
for “Nose Job”, etc.
Prescription Drug Diversion
• New shift from Class II Controlled narcotics to expensive
non-controlled drugs
• Anti-Psychotics
• HIV/AIDS anti-virals
• Compounds (testosterone)
• Sleep Aids
• Cocktails of pain killers
• Pill Mills and Pain Clinics
• Repurchase unused or unwanted drugs
Durable Medical Equipment Fraud
• Wheelchairs
• Oxygen
• Nutrition Supplies
• Diabetic Supplies
• Prosthetics
• Orthotics (Custom)
• Increase use of “runners who provide kickbacks to
patients such as cash, drugs, food, etc. for use of
insurance card
• Telemarketing: Encouraging resale of excessive volume
of diabetic test strips on E-Bay.
Scheme: Multidisciplinary Clinics
Integration of several doctors in one
practice so that claims can be miscoded,
double billed, up-coded, etc.
Example: DC or PT render services under an
MD’s supervision and circumvents limits on
insurance benefits for chiropractic or physical
therapy care; or PT care is rendered by a DC or
PT, but billed to insurance as if the servicing
provider was the MD; again, done in an effort to
circumvent insurance benefit limits and
maximize reimbursement.
Provider groups with doctors from various
specialties, such as:
• MD/DDS
• MD/DC
• MD/PT
• DO/DC
• DC/PT
• MD/DC/PT
Scheme: Bogus Clinic
Multi-million dollar scheme
against Centers for Medicare
& Medicaid (CMS) and
private carriers
Fraudsters (organized crime, South
Florida):
•
steal UPIN/NPI number from provider
and thereafter purchase medical ID
card numbers
•
sets up bogus clinic with UPS or a
P.O. box address and begin billing
WellPoint (Medicare Advantage)
•
Due to “any willing provider” clause,
claims are paid without question
•
If codes are pended, code shifting
takes place
•
If scheme discovered by payer, the
bogus clinic moves and changes
names and Payers
Schemes: Alternative Medicine &
Emerging Devices
• Chelation
• Sea urchin/insecticide IV
therapy
• Gastric emptying/colonics
• Alternative cancer
treatments drug
• Oxygen chamber
• Meridian stress
assessment
• Live cell transfer as post surgical wound therapy,
billed as a tissue graft
• Prolotherapy
• Neural scans
• Nerve conduction studies
• Pressure specific sensory devices
• Weight loss clinics miscoding
Case Highlight
The GA office of
WellPoint’s SIU received
its largest single
restitution from a provider
that was convicted of
fraud:
$2,450,364.00
United States Attorney David E. Nahmias, Northern District of
Georgia prosecuted
Dr. Howard Berkowitz, of Atlanta, GA who pled guilty to one count
of an indictment in a $3 million scheme to commit health care
insurance fraud.
Additional Schemes
Controlled Substance Utilization
Management Program
• off-label
• off-market
Durable Medical Equipment
(DME)
• prosthetics
• wound therapy/pumps/bone
growth stimulators
• surgical supply trays
Podiatric
• platelet rich plasma
• tissue grafts
• removal of buried wire
Transport
• dialysis
• critical care transports
• mileage
Measuring success: Metrics
• Recoveries
• Corrective Action Savings
• Denied Claims
Questions and Discussion
Alanna M. Lavelle
Director, Enterprise Investigations
Special Investigations Unit
404-842-8128
Alanna.Lavelle@bcbsga.com
THANK YOU