CQ HEALTHBEAT NEWS
June 24, 2008 – 4:16 p.m.
New Consortium Created to Combat Medical Fraud

Public and private anti-fraud organizations announced a new initiative Tuesday focused on fighting medical insurance fraud nationwide.

Called the Consortium to Combat Medical Fraud, the new entity is a partnership between the National Health Care Anti-Fraud Association (NHCAA), the National Insurance Crime Bureau (NICB) and the Coalition Against Insurance Fraud. The Consortium will also work with the FBI and the Department of Justice.

“Never before have different parts of the insurance system cross-pollinated to seek new ways to prevent fraud,” said Louis Saccoccio, executive director of NHCAA. He said the Consortium aims to create an open environment to share information on the issues surrounding medical insurance fraud.

Losses from insurance fraud accounted for about 3 percent of the roughly $2.3 trillion spent on health care in 2007, which translates into approximately $20 billion per year, Saccoccio said.

About 10 percent of premiums paid by customers to insurers are lost on account of fraud, said Gary Healy, executive director of NCIB. Healy said the crime bureau, which is funded by insurance companies, has set up around 30 medical fraud task forces since 2002 in cities around the country, including New York City, Houston, Los Angeles and most recently the District of Columbia. The task forces are made up of local law enforcement agents and insurance company investigators.

Among its activities, the Consortium will share information on claims and investigations between health insurers, and hold educational programs and conduct industry-wide research.

Consumers strongly support anti-fraud initiatives and are “very heavy proponents of punishment,” said Dennis Jay, executive director of the Coalition Against Insurance Fraud. He said the new initiative is timely because during tough economic times, organized fraud rings have the chance to hone their skills and get involved in scams when people are desperate.

“We’re dealing with people that are not just occasionally submitting a bad bill,” Jay said. “These are people who are cutting corners in the financial reimbursement system,” and if they are cutting corners there, they will also do it with patient care as well. Such fraudulent activities often involve the use of unnecessary surgeries or expensive X-rays and MRIs, Jay said.

Health care is different from other types of fraud because in addition to monetary losses, it can have an enormous personal impact on patients, Saccoccio said.

“The collaborative efforts of both the public and private sector, such as working with the NHCAA and the Consortium, is one of the tools that is available to the FBI to investigate those committing medical insurance fraud,” said Robert Montemorra, chief of the FBI Health Care Fraud Unit, in a press release.

Steve Tyrell, chief of the Criminal Division’s Fraud Section at the Department of Justice, said in a release, “As more people enroll in the Medicare program and private health care plans and the amount of money spent on health care continues to rise, so too does the importance of the Department’s efforts to combat fraud and our cooperative efforts to increase awareness and detection of fraud.”

Source: CQ HealthBeat News
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