Who Is Stealing From Your Wallet

Much can be said about the cost of medical care and insurance coverage today in the United States. While there have been numerous initiatives that were supposed to contain and actually bring down medical costs, the amounts paid for medical care as well as medical coverage continues to increase. How come? Who is to blame for this?

Most business transactions in our society require a buyer and a seller in order to be conducted. Medical care is the only three-party transaction. Someone needs care, someone provides the care and someone pays for the care. It is for this reason that our issue of high cost can become difficult to focus in on.

Unfortunately, no one has really taken ownership of this issue. Patients blame doctors, hospitals and insurance companies. Doctors and hospitals blame insurance companies. Insurance companies blame doctors, hospitals and patients. With everyone blaming everyone else, it isn't surprising that no real movement towards a solution has been made.

However, one element that everyone seems to agree on, that has no place in the healthcare or health insurance arena. That element is Fraud, Waste and Abuse (FWA). What are these three items that make up this element? Let's define:

Fraud - Obtaining a benefit that no entitlement would otherwise exist, through intentional misrepresentation or concealment of material facts.

Waste - Incurring unnecessary costs because of deficient management, practices and/or controls.

Abuse - Excessively or improperly using government, public or private resources, resulting in unnecessary costs that are not medically necessary, not professionally recognized or not fairly priced.

As consumers, what can we do to help prevent FWA? One of the best things is to insist on receiving a copy of your Explanation of Benefits (EOB) from your insurance carrier. This item will show what services you (or the patient) received from your medical provider, how much was charged, as well as how much (if anything) was paid. If there are services that were not performed or received, contact your insurance company to make them aware of this. 

Most every insurance company has a fraud hotline that can be utilized, to make them aware of your concerns. All of the Medicare and Medicaid programs also have fraud hotlines. In other words, there are a number of resources that can be used to report FWA.

With all of these resources that are available, consumers might wonder how the industry is doing in the fight against FWA. The sad truth is "not very well". How come? Why isn't a better job being done? There are a number of possible reasons. Let's explore:

1. The "Big Fish" Mentality - Very few of the available resources are willing to focus on individual issues that might not add up to a lot of money. While all of the FWA departments (particularly the States and the Federal Government) want you to provide them with all of the information and details, not much appears to happen with the individual case that you reported. The larger the case on dollars, the more attention it appears to receive.

2. Carriers Desire To Keep Medical Providers Happy - With the focus of the health insurance carriers having drifted away from "health insurance" and have now become wedded to "cash management" administration, the name of the game is "big discounts" and "providers in the network". If a FWA investigation were to be conducted on a certain medical provider who is a valued participant in the network, the provider could become angry, and threaten to leave the carrier's network. Losing a medical provider could affect a carrier's ability to be a desired commodity and keeping its competitive edge. Because of this, FWA prosecution in some situations may not be very high on the list of carrier priorities.

3. Inadequate Staffing in Many FWA Departments - Even though a good FWA Analyst should be able to recover 10+ times the company's cost in salary and benefits for that employee, the issue of FWA does not receive the high priority that it deserves. As a result, limited staffing does not have the resources and tools necessary to pursue cases to the extent that they deserve.

4. Fraud Must Be Proven - Since fraud must be proven to the extent that it was willful, carriers are more apt to pursue waste and abuse. In many cases, carriers may settle a case for a recovery amount as opposed to pursuing a case through Law Enforcement and/or the Legal System. In these types of circumstances, full recovery is seldom achieved.

5. Failure to Take Ownership of the Issue - As mentioned earlier, the medical insurance business is a three party transaction, which helps contribute to the complexity of this problem. Medical providers feel that benefit dollars being spent belong to the insurance company. Insurance companies feel that benefit dollars being spent belong to the consumer. Consumers feel that the benefit dollars being spent belong to the government and the insurance company. If no one feels it is "their" money, they don't get too excited about it. To add further complexity to this equation, many consumers look at their health coverage as an expense account instead of insurance. Accordingly, they are looking to recover every dollar possible. Failure to recover every dollar leaves many consumers feeling they "did not get their monies worth" from their health coverage. In other words, they are not very motivated to "help" an insurance company concerning this issue.

No doubt you have seen or maybe even read some articles about FWA recoveries made by one of the various FWA departments. Recoveries of 6, 7, 8 and even 9 figures have been noted. The question I have always asked to these various departments is "What percentage do your recoveries represent, when compared to the total amount of benefit dollars that you paid out?" For some reason, no one ever seems to have this information available. Rest assured, you will need a magnifying glass to see the results.

Ultimately, it is the consumer that is bearing the cost of these inefficiencies, through higher insurance premiums, higher taxes and additional out-of-pocket medical expenses that insurance coverage does not reimburse. Until the consumer realizes that they need to get involved and demand better efforts and results from this industry, little if anything is going to change.