Verisk Insurance Solutions-Claims and Crime Analytics
President and CEO
National Insurance Crime Bureau
There's a New Sheriff in Town
A new database ferrets out potential fraud in medical claims related to auto and workers' comp.
The Aggregated Medical Database (AMD) is not quite the Bat Crime Computer, but it is definitely a step in that direction. And the dynamic duo behind its innovation is Joe Wehrle, president and CEO of the National Insurance Crime Bureau (NICB), and Vincent Cialdella, president of Verisk Insurance Solutions-Claims and Crime Analytics.
Medical billing is a multibillion-dollar problem for property and casualty insurers in the United States. Even for legitimate claims, P&C carriers generally pay higher prices than health insurers for health care services to auto and workers' compensation claimants because of the absence of guidelines as well as inconsistent fee structures, internal insurer policies and procedures, and overall operational and procedural infrastructures that health insurers have in place.
Before the AMD, there was no centralized medical billing database for the P&C insurance sector. As a result, it was virtually impossible to conduct strategic analysis exercises, search for fraud trends, identify new forms of medical billing fraud and develop a baseline for medical billing related to auto and workers' compensation data.
"We did not know what we were going to get when we put this together," said Wehrle, "but we knew the data would be very powerful. At the same time, we have made security and patient privacy high priorities. We started with two years of data from member companies, and things began to show immediately."
When AMD unearths an anomaly that indicates possible fraud, NICB issues a "MedAware Alert" to the member carrier. Wehrle stressed that "we are only alerting our members to possible situations. We in no way tell our members what claims to pay or not to pay or what to do with the alert information we provide. That is their decision."
So far, as a result of the AMD, the NICB has issued 385 alerts to participating P&C insurers: 155 in 2011 and 230 in the first half of 2012. Additionally, the AMD has resulted in the referral of suspicious medical provider activity amounting to P&C carrier exposure of more than $101 million.
Wehrle cited one prime example. "There was one physical therapist who was billing about $11 million a year. That was 100 times the national average. We could not say just from the data that it was fraud, but we knew there was something there and we knew it warranted closer inspection.
"With AMD, we are able to start new cases, but so far we have mostly augmented existing cases. It is really very exciting," he said.
The program is a budget item in NICB, funded through the membership fee, as are other programs and services.
September 15, 2012
Copyright 2012© LRP Publications