During a recent webinar – Recognizing and Combatting Medical Fraud, Waste and Abuse in Property and Casualty – Verisk Analytics outlined the ways medical fraud is perpetrated and ways it can be identified and controlled. According to the company, it is estimated that $234 billion goes to medical fraud, waste and abuse in the healthcare system annually – that’s $28.5 million an hour.
And the problem is growing rapidly. In 2000, fraud accounted for 10 percent of Property and Casualty spend. In 2015, fraud accounts for 30 percent. Medical fraud costs an estimated $30 to $50 billion annually. In worker’s compensation, $5 billion annually is attributed to fraud with 30 percent of that attributed to prescription fraud and abuse.
Not surprising, personal injury protection (PIP) fraud totals $6.8 billion annually. One in four PIP claims in New York have a fraud component, while one in three in Florida do. The Florida Office of Insurance Regulation reported no-fault fraud and abuse cost the state’s consumers and insurers about $658 million in 2011.
The Verisk solutions manager outlined the following examples of fraud, waste and abuse: Misidentified procedures; Cost shifting; Drug seeking; Identity theft – patient or provider; High times – when a provider bills for more hours than are in a day; Template billing – everyone seen is billed for the same procedures and diagnoses; Specialty procedure and diagnoses codes mismatch; Upcoding; Evaluation and maintenance codes by PTs and MTs; Boiler plate billing; Accelerated treatment path – Evaluation and maintenance, MRI then surgery; Modifier abuse – code 59 is commonly used indicating more work so extra charges.
Insurance Research Council data released earlier this year found that claims with possible fraud and/or buildup were more likely to include chiropractic treatment, physical therapy, alternative medicine and pain clinics.
With the changes to the U.S. healthcare system over the past few years, there is evidence of a trend towards cost shifting from group healthcare to the Property and Casualty industry. Doctors are trying to make up for lost revenue by charging more in workers’ compensation and auto cases.