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Under HIPAA, healthcare fraud is defined as “knowingly, and willfully executing or attempting to execute a scheme … to defraud any healthcare benefit program.” Unlike waste and even abuse, which are characterized by an unintentional practice that directly or indirectly results in an overpayment, fraudsters are distinguished by their intention to obtain monies that they are not otherwise entitled to receive. The challenge that health plans face is that within the spectrum of fraud, waste, and abuse (FWA), it’s often unclear if a billing mistake is accidental or intentional.
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To decipher between genuine administrative mistakes and blatant, deliberate fraud, the key is to look for patterns of billing behavior, which may help indicate whether a claim error is accidental vs. intentional, as well as where it lives on the FWA scale. Here are a few key indicators to watch out for:
1. Excessive testing. A provider who orders an occasional unnecessary test isn’t cause for concern. However, if a pattern emerges and, over time, the provider has a habit of administering and billing for unnecessary tests, health plans can take note of the activity and monitor it more closely as potential fraud.
2. False claims. One false claim can be discounted as an administrative error. For example, let’s imagine that a man is admitted to a hospital for knee replacement surgery and billed for a pregnancy test. We recognize that this is likely an error made at the time of coding and claim submission. A pattern of a provider billing for psychotherapy services to elderly patients who claim to have never received them, however, is likely a case of fraudulent activity.
3. Unbundling. When a provider bills for multiple procedure codes for services that should have been covered by a single, more comprehensive code, it might be due to poor coding practice, or it might be intentional. Factors that increase the likelihood of such billing being fraudulent include, but are not limited to, repeated offenses over time, multiple schemes of unbundling in the same time period, varying from one to another scheme over time, and targeting unbundling schemes to specific insurance plans.
When keeping these indicators in mind, also consider an approach that uses both analytics and expert review to reveal true-positive patterns of FWA that your health plan can prevent from happening again.
Verscend Fraud Detection combines advanced analytics and clinical investigative review to deliver actionable case referrals to health plan cost containment staff and special investigations units (SIUs). Download our fact sheet for more information on our unique approach.