|Federal Information & News Dispatch, Inc.|
Thank you for the opportunity to provide our input and recommendations on detecting and deterring fraud and abuse in the health care system. We appreciate your leadership on addressing what we believe to be a critically important issue: protecting patient safety and the financial viability of our health care system through detecting and deterring health care fraud and abuse. At a time of rising health care costs, it is essential not only to stop the costly drain on the U.S. health care system, but also to protect consumers' health and safety.
In order to truly make inroads into the problems associated with health care fraud and abuse, WellPoint believes that a holistic view needs to be adopted, since the enormous costs of health care fraud and abuse are borne by all Americans whether they have private health insurance coverage or government-provided health care. Health care fraud and abuse is not just a
In addition, it is important to understand that stopping health care fraud and abuse means that multi-faceted approaches need to be used, as there is more than one problem and more than one source. For example, drug fraud or abuse can be caused by overutilization (drug abuse) or fraudulent prescribing (for financial gain), and can be driven not only by the recipients of the drugs but also by prescribing providers. For this reason, it is important to recognize that a one-size fits all solution does not exist.
One of the significant strengths that WellPoint and other health plans provide is the data available from our integrated health care benefits. This allows us the ability to see the entire health care spectrum and to spot trends and outliers - such as the overprescribing physician or the patient receiving multiple prescriptions from multiple providers or pharmacies. For WellPoint's members that have both pharmacy and medical coverage under WellPoint, we have been able to identify:
. Provider practice patterns regarding the overprescribing of medications or performing unnecessary surgeries or procedures;
. Inappropriate coding by providers to receive greater reimbursement or reimbursement for services not rendered;
. Members in crisis or at risk of harmful prescription drug use, including abusive or potentially addictive usage patterns;
. Members who may benefit from chemical dependency and/or pain management intervention to improve quality of life; and
. Criminal enterprise and/or individuals defrauding the health care system, through the work of our fraud and abuse Special Investigations Unit (SIU).
WellPoint's Special Investigations Unit
To enhance our efforts to combat fraud and abuse, WellPoint has a dedicated fraud and abuse prevention team known as the Special Investigations Unit (SIU). I am one of the lead investigators, overseeing a team in the Southeast region. The SIU, led by a former Los Angeles Assistant United States Attorney, is staffed with employees having prior experience in the
WellPoint's Successful Fraud Prevention Programs
Our goal at WellPoint is to prevent health care fraud and abuse for the benefit of our members' health, as well as for the health care system as a whole. In order to meet this goal, WellPoint has developed a number of different types of programs to identify and prevent health care fraud and abuse, a few of which are discussed below.
1. Controlled Substance Utilization Monitoring (CSUM) Program
Our nation has a significant problem with prescription narcotic drug abuse and patients have at times gamed the system by doctor shopping, making multiple emergency room visits, and obtaining multiple prescriptions for narcotic drugs. Through a Controlled Substance Utilization Monitoring Program, (CSUM), health insurers can aid in patient safety and identify those who are engaged in or contributing to prescription drug abuse.
Our CSUM program in our commercial and
2. Medicaid Restricted Recipient Program
WellPoint has also implemented a restricted recipient program for our
3. Provider Engagement in the Prescription Drug Trade
Provider involvement in the prescription drug trade of narcotics and other expensive drugs is a serious problem in our country, in particular in the state of
4. Pre-pay provider review program
Part of WellPoint's antifraud program activities includes examining physician practice patterns, to determine whether outlier physicians whose practices are different from the norm are engaging in questionable behavior that not only are driving up costs, but also are impacting patient safety. WellPoint investigators are able to identify aberrant provider practice patterns through data mining and analytics in which they look for outlier activities such as significant dollar spikes in payments or cumulative dollar spikes in certain counties. WellPoint has implemented two such pre-pay provider review programs in which the most egregious billers who, after being educated and refusing to modify their billing behavior, are placed on "Flagged Pre-Payment Review." For example, providers are identified as outliers if they show patterns of engaging in billing practices that are extremely aberrant compared to their specialty peers. "Upcoding" (coding a less intensive service as a more intensive procedure), billing an incorrect code to obtain coverage for a noncovered service, or billing at a particular facility to obtain extra reimbursement (e.g., billing a simple toenail clipping performed in an outpatient facility as debridement performed at an ambulatory surgery center) are examples of such outliers.
If a provider shows a pattern of engaging in such outlier behavior, WellPoint investigators and Medical Directors intervene to communicate with the provider to educate and attempt to correct his or her behavior if appropriate. About 60 percent of providers change their practices within 90 days after receiving such communications. However, the 40 percent of providers that continue to engage in incorrect coding may be placed on pre-pay review. In that case, providers must bill with paper claims accompanied by medical records so that we can determine whether the procedures billed for are reflected in the records.
5. Predictive modeling program
WellPoint has recently contracted with a vendor to provide an automated solution to enable WellPoint to continuously monitor medical (professional claims on CMS 1500s) claims across the company in a post-payment or future pre-payment environment. The initial rollout focuses on deploying the solution in the post-payment environment. WellPoint initially rolled out the program in
The program uses advanced neural network technology from FICO n2 to identify previously unknown and emerging fraud and abuse provider/member schemes. FICO-based analytics score suspect claims on a scale of 1-1000 and identify aberrant provider/member behaviors. Suspect providers and claims are reviewed by a triage unit and the SIU to identify potential fraud, waste or abuse, and depending on the type of findings are then assigned to the investigative unit to investigate, prevent and stop ongoing fraud and abuse.
Since we began using this tool six months ago, WellPoint's SIU has opened 90 investigations and has achieved
6. Bogus providers
Bogus providers are those providers that, although they may have National Provider Identifier numbers (which are usually stolen or purchased), do not actually perform services for real patients. Instead, bogus providers steal or purchase patient identification numbers, establish a fake storefront office furnished with limited inventory, obtain a post office box, and proceed to bill insurers for fraudulent services and devices. Bogus providers are a significant problem in both commercial health insurance as well as in the
WellPoint takes a multifaceted approach to identifying bogus providers and preventing their fraudulent billing. SIU's Provider Database team alerts investigators to the presence of new labs, pharmacies and durable medical equipment (DME) clinics, and performs a full background check as well as a drive-by of the provider's purported office space. WellPoint also matches
A great example of the proactive work of the SIU in identifying bogus providers and also collaborating with our public partners at CMS and DOJ involves identifying and deterring health care fraud in the
Our SIU worked closely with claims operations areas to develop a proactive program to assist in identifying any provider fitting the same claim and provider profile as the bogus providers. The proactive process involves identifying any previously unknown provider billing the suspicious high dollar infusion therapy. These providers and their claims are immediately pended in the system and submitted to the SIU for review. Additionally, with respect to providers already in the claims systems with the same billing and provider profile, an edit process was inserted in the claims system to pend and review claims similar to those used by the bogus providers.
As a result of the investigation, in 2011 SIU identified 36 bogus providers who engaged in this scheme. Due to the proactive work of SIU,
7. Review of Emerging Technologies
Every week WellPoint reviews newly emerging technologies to determine whether providers are inappropriately billing for services, devices or medications that are currently experimental or investigational. WellPoint performs data mining to detect the wrongful billing of experimental medications and medical services by the use of codes to make the services appear legitimate. In order to receive health insurance reimbursement, some providers bill for experimental/investigational devices, pharmaceuticals, or procedures by using a set of medical technologies as providers typically advertise them on their websites.
One such fraudulently billed new technology was an experimental back treatment known as VAX-D, a mechanical table used to stretch a patient's spine. WellPoint considers VAX-D to be investigational and not medically necessary, and clearly communicated to health care providers that it did not cover the procedure. From 2004 to 2006, WellPoint's SIU began investigating an anesthesiologist who was providing primarily physical medicine procedures at a privately-owned physician's office. Through patient interviews, the SIU determined that the office was providing back treatments using a VAX-D machine, and recovered a document that identified suggested billing codes to use for VAX-D which deviated from the specific HCPCS n4 code for VAX-D. Most insurers, including WellPoint plans, do not pay on the appropriate HCPCS code for VAX-D, but insurers do pay on the suggested codes.
WellPoint referred its investigation to the
WellPoint has recovered several million dollars (and expects to recover more through restitution), and the seven main perpetrators of the crime have either pled guilty or been convicted and sentenced. n5
The VAX-D investigation has benefited WellPoint members by protecting healthcare dollars that would be lost to purveyors of a device that, to date, has not proven to be clinically effective in treating back pain. As such, the investigation has been a valuable tool to uphold the integrity of the health care system. Other plans have also benefited, as WellPoint has shared its findings with many commercial insurers. Other plans can pursue similar investigations and, given the success of the
Based on our experience in combating health care fraud and abuse, WellPoint offers the following recommendations to enhance future efforts throughout all sectors of health care:
. Medicare Restricted Recipient Program
WellPoint is supportive of giving CMS the authority to establish a restricted recipient program in
. Dual Eligible Beneficiaries
Through our experience in providing health care coverage through both our
WellPoint recommends that dual eligible beneficiaries with evidence of drug-seeking behavior should be locked into one managed care plan, rather than continue to be allowed to switch plans on a monthly basis to evade detection.
. Improved Partnerships
WellPoint supports better coordination and cooperation among CMS, DOJ, and all stakeholders. Right now there is little collaboration between the agencies and the health plans that oftentimes have the information, experience and expertise necessary for preventing and fighting fraud and abuse. In order to be truly effective throughout the health care system, both public and private sectors should be working together to share successful anti-fraud practices, effective methodologies and information about ongoing fraud investigations. For example, while health plans currently share information with the MEDIC, we are rarely informed of the ultimate result, and information collected by the agency is rarely shared with the private payers. However, we are excited by the recent creation of the
. Encourage Fraud Prevention in Private Health Insurance Programs
Experience has proven in both private and public program fraud investigations that fraud prevention is much more effective and cost-effective than pursuing "pay and chase" type fraud investigations. "Pay and chase" investigations recoup only about
One way this can be done is to permit health insurers to lift the current restriction on health insurers' fraud programs in the Minimum Loss Ratio (MLR) calculation. All expenses for health insurer anti-fraud and abuse programs should be included as "activities that improve health care quality" in the MLR calculation, since they reduce waste in the health care system, reduce the cost of health care, and enhance patient safety by helping identify and remove providers and individuals engaging in unsafe and fraudulent practices from the health care system.
Currently the MLR final regulation merely gives insurers a limited credit - up to the amount of fraud recoveries - for fraud prevention activities. In essence, this means that insurers will have to include as administrative expenses their largest portion of antifraud expenses -- those dedicated to fraud prevention. It is truly puzzling that at a time when the federal government is accelerating its efforts to prevent fraud in
If private health insurers are discouraged from keeping their anti-fraud programs in place at the same time that public program anti-fraud efforts are increasing, federal law enforcement will lose a valuable source of information and tips about providers and recipients who may also be engaging in defrauding public programs. These considerations will also be crucial as the
In conclusion, I would like to thank the Committee for the opportunity to testify today on behalf of WellPoint on this critical issue, and pledge our support in any efforts to make the health care system financially viable and safer for our members.
n2 FICO is the acronym for
n3 Of note is that Section 6401 of the Affordable Care Act provides for a ninety-day period of enhanced oversight for the initial claims of DME suppliers where HHS suspects there may be a high risk of fraudulent practices.
n4 "HCPCS" stands for Healthcare Common Procedure Coding System.
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