Turning Up the Heat on Health Care Fraud

With health care fraud — particularly in Medicare and Medicaid — costing the nation upward of $100 billion annually, political experts like former House Speaker Newt Gingrich and government officials want citizens on the front lines of prevention.

"As long as you are not involved, the crooks will always have the advantage," Gingrich said.

Gingrich, Blue Cross/Blue Shield President Scott Serota and Ryan Lynch, a fraud investigator for the inspector general of the Department of Health and Human Services, appeared at AARP's "Orlando@50+" conference Friday to discuss the magnitude of health care fraud in a session titled "Turning Up the Heat: Fighting Health Fraud Together."

"You are the front lines, you are real time, you understand what is happening and you can help," Serota told the Florida audience of several hundred people. "Notify us and we can act quickly to solve these problems."

Credit card model

The government is already cracking down by setting new regulations aimed at keeping better track of health care providers, especially those who provide medical equipment and supplies, and new home-health agencies, the sources of much of the fraud. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius have said their most recent initiative, launched in 2009, has produced more than 580 criminal convictions and recovered more than $2.5 billion. But more remains to be done.

Gingrich said that people need to check their "explanation of benefits" forms and Medicare summary notices carefully, and he called for a system that lets consumers know in real time what services and equipment are being billed in their names.

He said health care transactions should be like credit card transactions — when the credit card company notices something out of the ordinary on charges and calls within hours. "We need to reengage the customer, the citizen, the patient with a real-time verification system," he said.

He likened the consumer's responsibility to a trip to a McDonald's drive-through window that his wife, Callista, made recently, in which she was so preoccupied with work that she drove off without her order. When she noticed the mistake, minutes later, she returned to the window and the clerk tossed in an order of fries as compensation for Callista's harried day. He told the story to laughter from the several hundred spectators attending the session, but his point was that the farther "away from the window" we get in health care, the more the crooks have the advantage.

"We need a billing system in which you know what's being billed," he said. "If you get a wheelchair billed in your name, you send a note back to the paying institution saying: 'Wait a second, I didn't get a wheelchair.' " That will help prevent fraud, he said.

Seniors on patrol

Also Friday, the Centers for Medicare & Medicaid Services announced the awarding of $9 million in grants to more than 50 Senior Medicare Patrol programs that fight Medicare fraud. The patrols are made up of volunteers who educate Medicare and Medicaid recipients on how to review their notices to identify errors and possible fraud. With portions of the new health care law already taking effect, the possibilities for fraud also have increased.

"Unfortunately, scam artists are using the new health care provisions of the Affordable Care Act as an opportunity to scare and steal from seniors," said Assistant Secretary for Aging Kathy Greenlee in announcing the grants.

Serota, in a book he contributed to with Gingrich, Stop Paying the Crooks: Solutions to End the Fraud That Threatens Your Healthcare, calls for private insurance agencies as well as the government to crack down on fraud. In it, he said his companies have dedicated more than 600 employees to ferreting out and cracking down on fraud. But they can't do it alone, he wrote.

In the book, Gingrich wrote that the health care field is "rife with endless examples of fraud, and wasted money is flying from the pockets of government programs into the hands of crooks. And yet, too little attention is given to this fraud."

In Orlando, Gingrich said the prospective cost of health care fraud to government over 10 years "could literally have paid for everything President Obama wanted to do out of the money we are going to give crooks." He cited one example of a New York City dentist who was "filing for 982 procedures a day."

According to Serota, the Blue Cross/Blue Shield plans get more than 80,000 calls a year from members and consumers, who often call after they see discrepancies in their "explanation of benefits" forms, which accompany insurance payments. These forms are a good way for consumers to check that they are actually getting the services or equipment that their insurance company or Medicare is being billed for. If a consumer sees something that doesn't look right, he said, their call to the insurance or government agency can be the first step in going after a fraudulent claim.

If a fraud case is prosecuted successfully, the surrounding publicity can also raise consumer awareness and scare off would-be fraudsters, Serota said.

Part of the problem is that because Medicare in particular is required to turn around claims quickly, fraudulent claims are often paid before they are recognized as illegitimate. This results in what is called a "pay and chase" situation, where law enforcement officials go after the fraudulent claims only after they have already been paid. Serota's companies are testing a prepayment identification plan that will target suspicious claims before they are paid, making law enforcement officials' work easier. Serota said under "pay and chase," only about 20 to 30 percent of fraudulent claims are ever caught.

Elaine S. Povich is a veteran Washington-based congressional correspondent.