Health Insurer On Alert For Fraud

Jan. 16--Medical Mutual of Ohio investigates 120 cases of health-insurance fraud on average a year, but that number jumped to 157 cases last year -- and the company recovered a record $9.78 million.

A combination of fine-tuning methods to detect fraud and an increase in schemes is causing an increase in fraud cases, Medical Mutual officials say.

More patients, for example, falsify applications to get health coverage after losing benefits or jobs.

Doctors, hospitals, and other health-care providers are up against dwindling Medicare reimbursements and other financial constraints, so they inflate claims or make other fraudulent moves.

"I think we get better at it [detection] every year," said John Shoemaker, Medical Mutual's manager of financial investigations.

He added: "Providers are trying to get all the money they can right now."

The Cleveland company's 11-member financial investigation unit, which includes three employees at its 500-employee regional office in Toledo, uses increasingly sophisticated data-mining software to detect fraud.

Medical Mutual also works with the FBI and other public enforcement agencies as well as fellow insurance companies that are members of the National Health Care Anti-Fraud Association.

Two Medical Mutual cases investigated last year resulted in federal indictments. In one, the former owner of a medical infusion and medical supply company in Coshocton, Ohio, was indicted on 14 counts, including that Medical Mutual paid more than $700,000 in false claims, according to the U.S. Department of Justice.

The United States spends more than $2.5 trillion on health care every year, and tens of billions of dollars of that amount is lost to fraud, according to estimates from the national anti-fraud association.

As a result, consumers face higher premiums and other expenses, Medical Mutual officials said.

But patients can help detect fraud by questioning doctors about whether suspect tests or other services are necessary, as well as by examining their statements carefully, officials said.

"We try to make it easy for people to tell us about fraud," said Brien Shanahan, Medical Mutual senior counsel and director of litigation and financial investigations.

"If they didn't have something done, we want to know about it."

Said Gary Thieman, Medical Mutual senior vice president and leader of northwest Ohio operations: "We all have to become better consumers in health care."

Just a small percentage of doctors and hospitals statewide commit fraud, Medical Mutual officials emphasized.

The insurance company has had a financial investigations unit since 1983.

About 80 percent of fraud cases involve doctors, hospitals, chiropractors, podiatrists, dentists, and other health-care providers, said Chris Ferrara, the Toledo office's supervisor of financial investigations.

Consumers and insurance brokers account for the remainder of cases, said Mr. Ferrara, who also is former chairman of the anti-fraud association's board.

Medical identity theft is becoming a problem, with patient information being sold to outfits that then bill false claims, said Mr. Shanahan, the senior counsel.

Organized crime also is playing a role in health-care fraud, Medical Mutual officials said.

They had a case in which a group of doctors and chiropractors with locations in several states, including the Cleveland area, were breaking up a treatment into three successive sessions, making a $35,000 to $50,000 charge inflate to $90,000 to $160,000, they said.

Contact Julie M. McKinnon at: [email protected] or 419-724-6087.

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