Blues get tougher on fraud

With so much hand-wringing about healthcare spending, the people who pay health insurance claims say they're committed to spending less on making criminals rich.

Blue Cross and Blue Shield companies saved or recovered $510 million in 2009 through anti-fraud efforts, according to a survey of members companies conducted by the Blue Cross and Blue Shield Association.

Fraud investigations prevented the companies from paying $318 million in bogus claims, a 62% increase from 2008 credited to more attention and technology dedicated to the problem. The investigations allowed the companies to get back $192 million that had gone out the door. The Blues received 5,028 complaints and referred 1,044 of them to law enforcement, leading to 355 convictions, according to the survey.

To announce the findings, the association convened a news conference that included Peter Budetti, who in February was named director of the CMS' Center for Program Integrity. Budetti noted that HHS this year hosted a healthcare fraud “summit” aimed at pooling fraud-fighting strategies between the government and private insurers.

Budetti said the CMS is working with companies on ways to improve information-sharing and analytics. “We are very committed to working with the private sector because we recognize that it's the same people who are out there creating problems that are on the private side or on the public side—they don't discriminate,” Budetti said. He added that the government is working to do a better job keeping criminals from enrolling as providers and suppliers and identifying bogus claims before they're paid.

“Sure we should chase after them,” Budetti said. “We also want to focus on preventing those problems in the first place and that's a big part of our new initiatives at the Centers for Medicare and Medicaid Services.”

Alanna Lavelle, senior director of investigations for WellPoint's Southeast and Central regions (and a former FBI agent), said the company stopped $33 million in claims from being paid by profiling and then flagging a ring of bogus Atlanta providers in its system. The scheme involved fabricated Medicare Advantage claims for cancer and HIV treatment using stolen physician identification numbers, Lavelle said.

Greg Anderson, a former Michigan State Police detective who serves as vice president for corporate and financial investigations at Blue Cross and Blue Shield of Michigan, described a different sort of scam. Prescription narcotics traffickers recruited a rotation of about 50 addicts to dress in scrubs and pose as doctors, Anderson said. The addicts would be ferried to pharmacies, where they would present phony prescriptions, identification and insurance cards, saying they were picking up medications for patients too ill to travel, Anderson said.

“I know these cases by themselves usually do not reach into the millions of dollars, but they reach into the society we live in,” Anderson said.

Also appearing at the event was Lou Saccoccio, executive director of the National Health Care Anti-Fraud Association, an organization that includes representation from private insurance companies, government health programs and law enforcement. Saccoccio said estimates of healthcare fraud range from 3% to 10% of combined public and private spending, which reached $2.4 trillion last year.

“The thing you have to remember is healthcare fraud is not just a financial crime,” Saccoccio said. “This hurts patients. It has a quality impact. It undermines the system.”