By PETER ROUSMANIERE, an expert on the workers' compensation industry
Workers' compensation claims payers have been taking medical-provider abuses much more seriously. Gone are the days when, as a claims executive once said dismissively, medical-provider fraud and abuse was a cost of business to be borne.
There's what one might call "soft" abuse. This is when the provider tries to get away with something that is questionable but plausibly defensible. Then there is "hard" abuse, which is indefensible and could lead to civil or criminal penalties. When confronted, the provider may usually back off, blaming the problem on a staffing error. No well-tested estimates of the incidence of hard abuse exist.
According to Bo Barber, manager of the Major Investigations Team at CNA Financial Corp., insurers have had to cultivate an aptitude among fraud investigators for going after abusive doctors. They have had their work cut out for them. Such fraud is not a traditional target for former law enforcement personnel. They often have to work without much support from state agencies. Some state oversight boards accept a complaint about a suspect provider only from a patient.
Cy King, CEO of Medata Inc., a coaches its clients on how to look for patterns of abuse. Medata, headquartered in Tustin, Calif., provides a bill-review service to claims payers and licenses its software to clients. King suggests to his clients that they zero in on providers that bill at the highest levels of service intensity for office visits, treat over unusually long durations or at unusually high intensity, and order a high level of diagnostic services.
Collusive relationships between providers also need to be rooted out, King said. To discover ties between providers, Barber said, CNA uses a software technique called link analysis to document these patterns. A scenario might involve a chiropractor who routinely refers patients to a pain management doctor in exchange for that doctor writing a letter to support the medical necessity for further chiropractic care. The pain doctor reaps repeated office visits and might dispense drugs.
Sometimes routine claims handling will uncover a scam. A CNA adjuster, for instance, noticed that a chiropractor was aggressively treating an injured worker with an old open claim. It turned out that some of the dates of services were over weekends. CNA obtained from the worker the actual dates of service, and it turned out that the provider was billing for many fictional encounters. Then CNA uncovered that the provider was doing the same with 16 other claimants. The story ended with the provider going to jail. Chicago-based CNA writes more than $1 billion a year in workers' compensation insurance.
Another trend is substantial double-billing by providers. Options and Choices Inc. (OCI), a Greenwood Village, Colo.-based data analytics provider, did a special study in 2009 for a large employer in this issue. The employer was concerned about overlaps between medical care for work injuries and nonoccupational conditions. OCI found that 4.4 percent of medical bills submitted for workers' compensation claims had similar bills submitted to the employer's health plan, reported Archie Anderson, OCI president. In about half of these instances, the bills were 100 percent identical. OCI stopped short of asserting that the duplicate billing was fraudulent. Billing system snafus could have been responsible. In any event, the employer over paid by more than $1 million.
In the ideal world, Medata's King said, providers and payers should work as partners. Until then, keep a sharp eye.
February 10, 2011
Copyright 2011© LRP Publications