Focus on fraud

Payers and purchasers of healthcare added new twists to the debate over how to reform healthcare, as insurers tried to make the case that they are better at fighting fraud and waste than the government, and a surprising voice added to the call for mandated employer coverage.

As lawmakers pursue their goal of making healthcare reform deficit-neutral, and target waste and fraud in the system as ways to curtail spending, health insurers across the nation said that they are already doing their part.

The Blue Cross and Blue Shield Association said in a new report that its anti-fraud division recovered nearly $350 million in 2008, an increase of 43% over the prior year. The combined savings and return for all Blues insurers was about $7 for each $1 spent on anti-fraud efforts, according to the association.

“Getting results and protecting consumers is our top priority,” said Byron Hollis, managing director of the national anti-fraud department at the Blue Cross and Blue Shield Association, which has about 55 investigators working with law enforcement.

Fraudulent activities uncovered included improper billing practices by providers, false claims and fabricated medical records, and billing for phantom durable medical equipment. Separately, Indianapolis-based WellPoint said that it recovered nearly $75 million in 2008 in anti-fraud efforts, referring 84 cases to law enforcement.

The message was loud and clear: Private insurers are doing their part to root out fraud and abuse in the system. About $68 billion is lost to healthcare fraud each year, or 3% of total healthcare spending, according to the National Health Care Anti-Fraud Association.

Meanwhile, UnitedHealth Group, another leading health insurer based in Minnetonka, Minn., said in a report last week that a $332 billion savings could be achieved by ridding the healthcare system of waste by streamlining administrative processes and adopting technology. For instance, broader use of automated swipe cards could save $18 billion over 10 years in paperwork and red tape, said UnitedHealth, which has issued 30 million magnetic swipe cards.

As insurers touted their efforts to save money, another major player stepped forward to show support for healthcare reform. Wal-Mart Stores, the nation’s largest private employer, said in a letter to President Barack Obama that it backs a federal requirement that employers provide healthcare to workers.

“We are for shared responsibility,” wrote Mike Duke, Wal-Mart’s president and CEO. “Not every business can make the same contribution, but everyone must make some contribution.” The letter was also signed by Andy Stern, president of the Service Employees International Union and John Podesta, president and CEO of the Center for American Progress. The U.S. Chamber of Commerce and the National Retail Federation oppose an employer mandate.

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