2nd Global Summit Healthcare Fraud: Prevention is better than cure

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2nd Global Summit Healthcare Fraud: Prevention is better than cure
2nd Global Summit
Healthcare Fraud:
Prevention is better than cure
25-26 October 2012
Beaumont Estate, Old Windsor, UK
The Challenge of Health Care Fraud:
A United States Perspective
Second Annual
Global Health Care Fraud Prevention Summit
Beaumont Estate, Old Windsor, England
October 26, 2012
Louis Saccoccio
Chief Executive Officer
National Health Care Anti-Fraud Association
Health Care in the United States: the programs,
the players, the payers, the numbers
U.S. Health Care System - The Basics
The Federal Government is a Health Care Payer:
•
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•
Medicare
Medicaid
Children’s Health Insurance Program (CHIP)
TRICARE
Federal Employees Health Benefits Program (FEHBP)
Indian Health Service
Veterans Health Administration
U.S. Health Care System - The Basics
State Governments are Health Care Payers:
• Medicaid & Children’s Health Insurance Program (CHIP)
• State Employees
• Other programs as determined by each state
 50 states, U.S. territories & the District of Columbia
U.S. Health Care System - The Basics
County & Local Governments are Health Care Payers:
• Government Employees
• Other programs as determined by each government entity
 3,031 Counties in the U.S. (Louisiana uses the term
“parishes,” Alaska uses “boroughs”)
 Tens of Thousands of Municipalities, Cities, Towns,
Townships, Villages, Boroughs
U.S. Health Care System - The Basics
Private Insurers are Health Care Payers:
• Employer Groups
• Insured
• Self-funded
• Individual Health Insurance
• Medigap
Individual Americans are Health Care Payers:
• Health Savings Accounts
• Health Reimbursement Accounts
• Out-of-Pocket Costs
U.S. Health Care System - The Basics
Federal and State Programs
Medicare
 The Medicare Program was created in 1965.
 Medicare initially provided certain health care coverage to
eligible individuals age 65 or older.
 Expanded in 1972 to cover individuals under age 65 with EndStage Renal Disease (“ESRD”) and some other disabilities.
U.S. Health Care System - The Basics
Federal and State Programs
Medicaid
 In 1965, the Medicaid program was established to provide
health care coverage for certain low-income families, as well as
certain low-income aged, blind, and disabled individuals.
 Medicaid is a joint federal/state program.
 The federal government sets broad eligibility and covered
benefit parameters for the Medicaid program.
U.S. Health Care System - The Basics
Federal and State Programs
Children’s Health Insurance Program (CHIP)
 Created as part of the Balanced Budget Act in 1997, it
was dubbed the State Children’s Health Insurance
Program (SCHIP) – now simply called CHIP
 Designed to provide health coverage for uninsured
children in families with modest incomes that are too high
to qualify for Medicaid.
 Provides matching federal funds to states.
U.S. Health Care System - The Basics
Keeping Track of the Numbers
Office of the Actuary,
Centers for Medicare & Medicaid Services
 The source for the most reliable data on United States health care
financing.
 Annual publication of National Health Expenditure Data (NHE).
http://www.cms.gov/Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/NationalHealthExpendData/index.html
 NHE data is available as “historical” (2010 is the most recent); and
as “projected” (2011-2021)
U.S. Health Care System - The Basics
Health Insurance Enrollment*
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Medicare:
Medicaid:
CHIP:
Other Public Programs (DoD & VA):
Employer-Sponsored Insurance:
Individual Health Insurance:
Medigap:
Uninsured:
46.6 million
53.6 million
5.5 million
12.5 million
165.9 million
13.3 million
8.3 million
47.2 million
*2010 historical data, CMS Office of the Actuary; due to overlaps in
coverage the data are not additive
U.S. Health Care System - The Basics
Annual Health Care Expenditures
• National Health Expenditure (NHE) was
$2.6 trillion in 2010
• That’s $8,402 per person
• $2.6 trillion represented 17.9% of Gross
Domestic Product (GDP) in 2010
U.S. Health Care System - The Basics
Annual Health Care Expenditures
 Medicare Spending grew 5% to $525 billion in 2010, or 20% of
total NHE.
 Medicaid spending grew 7.2% to $401 billion in 2010, or 15% of total
NHE.
 Private spending grew 2.4% to $849 billion in 2010, or 33% of total
NHE.
Note: The remaining 32% of NHE falls into the following categories: out-ofpocket spending (11.6%); investment (5.7%); other health insurance programs
(3.7%); other 3rd party payers and programs (10.6%).
U.S. National Health Expenditure
2010 National Health Care Expenditures*
in Billions of Dollars
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
$794
$518
$259
$141
$102
$72
$70
$44
$36
*CMS Office of the Actuary
U.S. Health Care System - The Basics
Annual Health Care Expenditures –
What the Future Looks Like
 Growth in NHE was 3.9% in 2010 and expected to average
5.7% per year over the projection period (2011-2021).
 The health share of GDP reached 17.9% in 2010 and is
expected to reach 19.6% by 2021.
U.S. Health Care System - The Basics
Health Care Reform
• H.R. 3590, The Patient Protection & Affordable Care Act
• H.R. 4872, Health Care & Education Reconciliation Act of 2010
Both became law in March 2010.
Collectively known at the
Affordable Care Act (ACA)
Talked About and Well-Known Provisions
of The Affordable Care Act
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Individual Mandate
Medicaid Expansion
Elimination of Pre-existing Condition Exclusions
Ability for children to remain on parents’ policy to age 26
Employer Requirements
Health Insurance Exchanges
Premium Credits
Small Business Tax Credits
The Affordable Care Act was challenged
in the Supreme Court
• On June 28, the Supreme Court upheld the ACA, including its controversial
individual mandate provision, which requires individuals to purchase health
insurance providing a minimum level of coverage or face a "penalty."
• The case was heard before the Court March 26-28 with an unprecedented six
hours of oral arguments over three days.
• The government offered three arguments for upholding the individual
mandate—via the Commerce Clause, the Necessary and Proper Clause as an
adjunct to the Commerce Clause, and Congress' power to tax.
• The Court upheld the mandate in a 5-4 decision, with Chief Justice Roberts
providing the deciding vote. The Chief Justice held that the "penalty" provision
for not obtaining health insurance was a "tax," which came within Congress'
taxing authority. The four other justices in the majority would have approved
the penalty as being within the scope of Congress' power to regulate interstate
commerce.
The Affordable Care Act was challenged
in the Supreme Court
• Medicaid expansion under the ACA—it was estimated that 16
million newly and previously eligible people will be enrolled in
Medicaid and CHIP in 2016 as a result of the law.
• The Court did strike down one ACA provision relating to Medicaid
which would have eliminated all federal Medicaid funding to a
state that does not participate in the Medicaid expansion. As a
result of the Court's 7-2 holding, states that choose not to
participate in the expansion will not lose their existing Medicaid
funding. Several states are now considering whether or not to
implement the expansion.
Fraud in the United States
Health Care System:
Quantifying the Problem
How Big is the Problem?
 Estimates of the amount of fraud in the U.S. health care
system vary widely with most estimates ranging from 3%
to 10% of NHE
 No one has a definitive answer because:
 It is a crime that, by its very nature, depends on
going undetected.
 The U.S. health care system is very large, complex
and diffuse with multiple payers and programs,
involving hundreds of thousands of providers.
 The blurring of the lines of what is fraud, compared
to waste and abuse.
How Big is the Problem?
 NHCAA estimates that the financial losses due to health care
fraud are in the tens of billions of dollars each year.
 Other estimates:
 Institute of Medicine of the National Academies estimates health care
fraud at $75 billion a year (2012)
 The FBI estimates the loss between $78 billion and $260 billion (2011)
 The Journal of the American Medical Association (JAMA) estimates
fraud and abuse to be between $82 billion and $272 billion (2011)
 The Centers for Medicare and Medicaid Services (CMS) has
estimated that Medicare and Medicaid made $70 billion in “improper
payments” for FY 2010
 An April 2012 study by a RAND Corporation analyst and a former
CMS administrator (published in JAMA) estimated that fraud and abuse
cost Medicare and Medicaid as much as $98 billion in 2011.
The Fraud Fighting Landscape
The Health Care Anti-Fraud Landscape
Federal and State Agencies
Department of Health & Human Services,
Office of Inspector General (HHS-OIG)
 The mission of the Office of Inspector General (“OIG”) is to protect the
integrity of Department of Health and Human Services (“HHS”*) programs
(Medicare, Medicaid, etc.), as well as the health and welfare of the
beneficiaries of those programs. The OIG has a responsibility to report both
to the Secretary and to the Congress, program and management problems
and recommendations to correct them. The OIG's duties are carried out
through a nationwide network of audits, investigations, inspections and
other mission-related functions performed by OIG components.
*The U.S. Dept of Health and Human Services (HHS) is a Cabinet department of
the U.S. government with the goal of protecting the health of all Americans and
providing essential human services. CMS, FDA, NIH, CDC, etc. all fall under HHS.
The Health Care Anti-Fraud Landscape
Federal and State Agencies
Center for Program Integrity (CPI) within the
Centers for Medicare & Medicaid Services (CMS*)
 Created April 2010 to bring together under one management
structure the Medicare and Medicaid program integrity groups
 Program integrity policies and operations in Medicare & Medicaid
 Prevention and detection of national and statewide fraud and
abuse issues in the Medicare and Medicaid programs and CHIP
* The Centers for Medicare and Medicaid Services (CMS) is the U.S.
federal agency with the U.S. Department of Health & Human Services
(HHS) which administers Medicare, Medicaid, and CHIP.
The Health Care Anti-Fraud Landscape
Federal and State Agencies
U.S. Department of Justice
(led by the United States Attorney General)
 Four entities with responsibility for health care fraud:
 Criminal Division
 Civil Division
 U.S. Attorney Offices
 FBI
The Health Care Anti-Fraud Landscape
National Health Care Fraud & Abuse Control
Program (HCFAC)

The HIPAA Act of 1996 established a national Health Care Fraud &
Abuse Control Program under the joint direction of the Attorney
General and the Secretary of the Department of Health & Human
Services to be “a far-reaching program to combat fraud and abuse
in health care, including both public and private health plans.”

Acting through the HHS-OIG, HCFAC is designed to coordinate
Federal, state and local law enforcement activities with respect to
health care fraud and abuse.
The Health Care Anti-Fraud Landscape
National Health Care Fraud & Abuse Control
Program (HCFAC)
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In its 15th year, the success of HCFAC confirms the benefits of a
collaborative approach to identify and prosecute health care fraud, to
prevent future fraud or abuse, and to protect program beneficiaries.

The HCFAC account has returned more than $20.6 billion to the
Medicare Trust Fund since the inception of the Program in 1997.

HCFAC Report is issued each Fiscal Year. Most recent is Fiscal Year 2011.

All HCFAC reports, beginning with 1998, are available at
http://oig.hhs.gov/reports-and-publications/hcfac/
The Health Care Anti-Fraud Landscape
Health Care Fraud Prevention & Enforcement
Action Team (HEAT)

Established in May 2009

Inter-agency effort between the Department of Justice
(DOJ) and Department of Health & Human Services (HHS)

HEAT is a cabinet-level commitment to prevent and
prosecute Medicare fraud.
The Health Care Anti-Fraud Landscape
Health Care Fraud Prevention & Enforcement
Action Team (HEAT)

The HEAT program adopted and has expanded the
Medicare Fraud Strike Force model launched in 2007.

Medicare Fraud Strike Forces are inter-agency teams of
federal, state and local investigators designed to combat
Medicare fraud through the use of Medicare data
analysis techniques and an increased focus on
community policing.
HEAT – Current Strike Force Areas
1.
2.
3.
4.
5.
6.
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8.
9.
Miami Dade County
Los Angeles
Detroit Metro
Houston Metro
Brooklyn, NY
Baton Rouge, Louisiana
Tampa, Florida
Dallas, Texas
Chicago
The Health Care Anti-Fraud Landscape
Federal and State Agencies
Medicaid Fraud Control Units (“MFCU”)
 MFCU is a single identifiable entity of state government.
 Annually certified by the Secretary of the U.S. Department of
Health and Human Services (HHS).
 Conducts statewide programs for the investigation and
prosecution of health care providers that defraud the Medicaid
program.
The Health Care Anti-Fraud Landscape
Federal and State Agencies
Various State Agencies:
 Office of the Attorney General – commonly the state MFCU resides
in this office.
 Department of Insurance – commonly contains the state insurance
fraud bureau.
 Department of Health – depending on the state, may have
jurisdiction over health insurance issues and oversight of state health
care entities.
 State Professional Licensing Boards – responsible for licensing
and disciplining various health care professionals.
The Health Care Anti-Fraud Landscape
The Role of Private Insurers
• Most private insurers have a “Special Investigations Unit” (SIU) tasked
with fraud prevention, detection and investigation responsibilities.
• The SIU is typically a separate department that might report to Legal,
Audit, Compliance, Claims, Operations or even the Executive Office.
• Because private health insurance are regulated primarily at the state
level, SIU requirements and responsibilities vary.
• Insurer SIUs can have different missions and priorities in terms of how
they apply limited resources to anti-fraud activities.
The Health Care Anti-Fraud Landscape
The Role of Private Insurers
• Because an insurer is limited to accessing and reviewing only its
own claims, information sharing, partnership and cooperation with
other payers—private and public—is vital.
• Remember that private health insurance is the largest category
of national health expenditures (NHE) at 33%.
• Some insurers are single-state, some regional, some national.
The Health Care Anti-Fraud Landscape
Affordable Care Act
The Significance for Anti-Fraud Efforts
Several provisions aim to put the new federal health care
programs and related programs established by the ACA
on the same footing for anti-fraud purposes as other
federal programs (e.g., by ensuring that the False Claims
Act will apply to these new programs).
ACA – notable anti-fraud provisions
• Provider screening and other enrollment requirements
under Medicare, Medicaid, and CHIP.
• Payment Suspensions under Medicare & Medicaid
• Temporary moratorium on provider enrollment
• Expanded Data Matching – Integrated Data Repository
• Return of Overpayments
• Enhanced Penalties (civil & criminal), sentencing
guideline review
ACA – notable anti-fraud provisions
• Recovery Audit Contractor (RAC) program – Medicaid,
Medicare Parts C & D
• Increased Funding fir Anti-fraud Activities
 $10 million more to the HCFAC Account for each year from 20112020
 An additional
 An additional
 An additional
 An additional
$95
$55
$30
$20
million
million
million
million
for
for
for
for
2011
2012
each of fiscal years 2013-2014
each of fiscal years 2015-2016
• Medical Loss Ratio (MLR) Requirement
• Credible Allegation of Fraud defined for Medicare & Medicaid
Information Sharing,
Cooperation and Partnership
NHCAA’s Role
• As a national association with private- as well as publicsector members, NHCAA provides a trusted venue for
facilitating information sharing, cooperation and partnership.
• We were founded in 1985 as a private-public partnership
against health care fraud and that theme has remained
central to what we do.
NHCAA Member Organizations
1199SEIU Benefit & Pension Fund · AdvanceMed Corporation · Aetna · American Specialty Health, Inc. ·
AMERIGROUP Corporation · APWU Health Plan · Arkansas Blue Cross Blue Shield · Blue Cross Blue Shield
Association · Blue Cross Blue Shield of Alabama · Blue Cross Blue Shield of Kansas · Blue Cross Blue Shield of
Louisiana · Blue Cross Blue Shield of Massachusetts · Blue Cross Blue Shield of Nebraska · Blue Cross Blue Shield of
Rhode Island · Blue Shield of California · BlueCross BlueShield of Minnesota · BlueCross BlueShield of Mississippi ·
BlueCross BlueShield of North Carolina · BlueCross BlueShield of South Carolina · BlueCross BlueShield of Tennessee
· Capital BlueCross · Capital District Physicians Health Plan, Inc. · CareFirst BlueCross BlueShield · CareSource
Management Group · Catamaran · Centene Corporation · Central States Funds · CIGNA · Community Health
Network of Connecticut, Inc. · Coventry Health Care, Inc. · Crossroads Healthcare Management LLC · Delta Dental
Plans Association · EmblemHealth · Excellus Blue Cross Blue Shield · Florida Blue · Government Employees Health
Association, Inc. · Guardian Life Insurance Co. · Harvard Pilgrim Health Care, Inc. · Hawaii Medical Services
Association · Health Care Service Corporation · Health Integrity, LLC · Health Net Federal Services Tricare ·
HealthFirst · HealthMarkets · HealthNow New York, Inc. · HealthSpring, Inc. · Highmark · Horizon Blue Cross Blue
Shield of New Jersey · Humana · IHC Health Solutions · Independence Blue Cross · Independent Health · Kaiser
Permanente · Magellan Health Services, Inc. · Medical Excess LLC · Medical Mutual of Ohio · Meridian Health Plan of
Michigan · Mutual of Omaha · MVP Health Care · National Elevator Industry Benefit Plans · Nationwide Specialty
Health · Network Health Plan · Organización de Servicios Directos Empresarios · Premera Blue Cross · Prime
Therapeutics LLC · Principal Financial Group · SCAN Health Plan · State Farm Insurance Companies · The Regence
Group · TMG Health, Inc. · Travelers Insurance · TriWest Healthcare Alliance · Trustmark Insurance Company ·
Truven Health Analytics · Tufts Health Plan · UnitedHealthcare Employer & Individual ·
UnitedHealthcare/OptumInsight · UnitedHealthcare/Public & Senior Market Group · Universal American · Universal
Health Care · UPMC Health Plan · Virginia Premier Health Plan · Vision Service Plan · WEA Trust · WellCare ·
WellPoint, Inc. · Western-Southern Life Insurance Company · Wisconsin Physicians Service · XLHealth
NHCAA Law Enforcement Liaisons
Alameda County District Attorney's Office, Consumer & Environmental Protection Division · Amtrak, Office of Inspector General · Arizona Health Care Cost
Containment System, Office of Program Integrity · Arkansas Department of Insurance, Criminal Investigation Division · California Department of Insurance,
Fraud Division · California Dept. of Health Services, Audits & Investigations · California Dept. of Managed Health Care, Office of Enforcement · Cape May
County Prosecutors Office · Connecticut Department of Insurance · Connecticut Department of Social Services · Cumberland County District Attorney's Office ·
DC Dept of Insurance Securities & Banking · Florida AHCA, Bureau of Medicaid Program Integrity · Florida Department of Financial Services, Division of
Insurance Fraud · Idaho Dept. of Health & Welfare · Iowa Insurance Fraud Bureau · Kansas Insurance Department · LAPD, Worker's Compensation Fraud
Coordination Unit · Los Angeles County Metropolitan Transit Authority · Louisiana State Police · Maryland Dept. of Health & Mental Hygiene, Board of
Chiropractic Examiners · Maryland Dept. of Health & Mental Hygiene, OIG · Maryland Insurance Administration, Insurance Fraud Division · Massachusetts
OAG, Insurance and Unemployment Fraud Division · Massachusetts Office of Inspector General · Medicaid Fraud Control Unit of Iowa, DIA · Medicaid Fraud
Control Unit of Kentucky, OAG · Medicaid Fraud Control Unit of Louisiana, OAG · Medicaid Fraud Control Unit of Massachusetts, OAG · Medicaid Fraud Control
Unit of Missouri, OAG · Medicaid Fraud Control Unit of Montana, DCI · Medicaid Fraud Control Unit of Nebraska, OAG · Medicaid Fraud Control Unit of Ohio,
OAG · Medicaid Fraud Control Unit of Pennsylvania, Office of the Attorney General · Medicaid Fraud Control Unit of South Dakota, Office of the Attorney
General · Medicaid Fraud Control Unit of Texas, OAG · Medicaid Fraud Control Unit of Vermont, Office of the Attorney General · Michigan Office of Health
Services Inspector General · Minnesota Dept of Commerce, Insurance Fraud Division · National Association of Attorneys General · National Association of
Insurance Commissioners, Anti-Fraud Task Force · National Association of Medicaid Fraud Control Units · Nebraska Department of Insurance · Nevada
Attorney General's Office, Insurance Fraud Unit · New Jersey Dept. of Banking & Insurance, Bureau of Fraud Deterrence · New Jersey Office of the Insurance
Fraud Prosecutor · New York City Human Resource Administration · New York City Police Dept., Health Care Fraud Task Force · New York State Insurance
Department · New York State Office of the Comptroller · New York State Office of the Medicaid Inspector General · New York State Workers' Compensation
Board · North Carolina Dept of Insurance, CID · North Dakota Insurance Department · Ohio Bureau of Workers Compensation · Ohio Department of
Insurance · Ohio State Chiropractic Board · Oklahoma Insurance Department, Anti-Fraud Unit · Ontario Provincial Police · Orange County District Attorney's
Office · Pennsylvania Insurance Department · Pennsylvania Insurance Fraud & Auto Theft Prevention Authorities · San Diego County District Attorney's Office
· Somerset County Prosecutor's Office · South Carolina Department of Health & Human Services · State of Alabama, Dept. of Public Health · State of
California, Office of the Inspector General · State of Georgia, Dept of Law, Georgia Medicaid Fraud Control Unit · State of Utah, Insurance Fraud Division ·
Texas Department of Insurance, Fraud Unit · Texas Health & Human Services Commission, OIG · U.S. Dept. of Defense, OIG-DCIS · U.S. Dept. of Defense,
TRICARE Management Activity · U.S. Dept. of Health & Human Services, CMS · U.S. Dept. of Health & Human Services, OIG-OI · U.S. Dept. of Homeland
Security, TSA · U.S. Dept. of Justice, Criminal Division, Fraud Section · U.S. Dept. of Justice, Drug Enforcement Administration · U.S. Dept. of Justice, Federal
Bureau of Investigation · U.S. Dept. of Labor, Employee Benefits Security Administration · U.S. Dept. of Labor, OIG · U.S. Dept. of Treasury, Internal Revenue
Service, CI · U.S. Dept. of Veterans Affairs, OIG · U.S. Dept. of Veterans Affairs, Purchased Care, Directorate of Program Oversight & Informatics · U.S. Gov't
Accountability Office, Office of Special Investigations · U.S. Nuclear Regulatory Commission, Office of Investigations · U.S. Office of Personnel Management,
OIG · U.S. Postal Service, Postal Inspection Service · United States Attorney's Office, District of Montana · United States Attorney's Office, District of Nebraska
· United States Attorney's Office, Western District of Missouri · United States Railroad Retirement Board · Washington State Dept. of Social & Health Services
Info-Sharing, Cooperation, Partnership
NHCAA’s Toolbox
• Case Information Discussion Roundtable Meetings
• SIRIS (Special Investigation Resource & Intelligence System)
• Requests for Investigation Assistance (RIAs)
• Inside SIRIS, monthly intelligence report
• The Compass, quarterly newsletter with investigative case
information and intelligence from SIRIS, law enforcement and
insurer SIUs
• Fraud Alerts
• Peer Experience Resource Center (PERC)
Info-Sharing, Cooperation, Partnership
NHCAA Outreach
• NHCAA devotes itself to building relationships that yield
cooperation among private- and public-sector members
• NHCAA maintains a robust Education & Training program that
brings private- and public-sector anti-fraud professionals together
to learn the latest health care fraud developments and to network
• For that last several years NHCAA has worked to promote
greater reciprocal sharing of information between private insurers
and law enforcement
Info-Sharing, Cooperation, Partnership
Other Information-Sharing Venues
• United States Attorney General’s (USAO)-sponsored health care
fraud work groups/task forces
• Regional or state-based information-sharing groups (not law
enforcement-sponsored)
• Reporting (to state departments of insurance or other
appropriate agencies)
Info-Sharing, Cooperation, Partnership
National Summit on Health Care Fraud
January 28, 2010 in Washington, D.C.
 Signaled a new era leading to greater private-public cooperation
against HCF – NHCAA was a participant
 Co-hosted by U.S. Dept of Health & Human Services (HHS)
Secretary Kathleen Sebelius & U.S. Attorney General Eric Holder

Purpose:
• To bring together leaders from the public and private sectors to identify
and discuss innovative ways to eliminate fraud, waste and abuse in the
U.S. health care system.
• Part of the Obama Administration’s coordinated effort to fight health care
fraud under the Health Care Fraud Prevention & Enforcement Action Team
(HEAT) initiative.
National Health Care
Fraud Prevention Partnership
• More than two years in development
• A series of informational discussions and meetings
among several interested parties to develop the idea
• A joint HHS-DOJ project together with associations,
insurers, and other private, government and law
enforcement groups
• Primary goal in developing the project was better
information sharing as a means to fight health care fraud
National Health Care
Fraud Prevention Partnership
• Formally announced July 26, 2012 at a White House event.
• The FFP Charter offers the purpose and framework.
“The Partnership's purpose will be to exchange facts and
information between the public and private sectors in order to
reduce the prevalence of health care fraud. The Partnership will
also enable members to individually share successful anti-fraud
practices and effective methodologies and strategies for
detecting and preventing health care fraud.”
National Health Care
Fraud Prevention Partnership
Framework
• Executive Board
• Data Analysis and Review Committee (DARC)
• Information Sharing Committee (ISC)
• Trusted Third Party (TTP)
• Administrative Office (AO)
• Participating Entities—organizations that have medical
claims payment or other data that they wish to share with
the Partnership in order to combat health care fraud.
National Health Care
Fraud Prevention Partnership
Participants
• CMS (Administrator)
• DOJ (AG’s Office)
• HHS (Secretary’s Office)
• HHS-OIG
• FBI
• National Association of Insurance Commissioners (NAIC)
• Healthcare and/or fraud related associations: NHCAA,
NAMFCU, AHIP, BCBSA, CAIF, NICB
• Private-sector insurers and/or health plans
The Future of
Health Care Fraud Fighting
Adjusting to the Changing Threat
The Nature of Health Care Fraud
• An opportunistic crime.
• Continuously changing, morphing and migrating, taking countless
forms, limited only by the creativity of the perpetrator.
• Because the U.S. health care system is so complex, health care fraud
is inevitably a complex crime. Fraudsters exploit the complexity of the
system—there are so many entry points and variables at play.
• Detection of health care fraud often requires the application and
knowledge of medical and clinical best practices and terminology and
arcane coding systems – ICD-9, CPT and CDT codes, DRGs, etc.
Adjusting to the Changing Threat
The Nature of Health Care Fraud
• Health care fraud isn’t just a financial crime. Patients can be put at
risk for, or be a victim of, physical harm through unnecessary or
dangerous procedures.
• The sheer volume of health care claims makes fraud detection a
challenge. Those committing fraud have the full range of medical
conditions, treatments and patients on which to base false claims.
• The majority of “claims” are submitted, not by the insured, but by
medical providers – hospitals, physicians, dentists, pharmacies, etc.
• It most often entails patient access to health care and involves the
health care profession, which is well-respected and trusted. These
factors make it a particularly challenging crime to address.
Adjusting to the Changing Threat
The Role of Technology
• Our health care system depends on billions upon billions of data
records—claims, codes, etc.
• Health care fraud has increasingly become a crime dependent
upon exploiting our technology systems.
• The use of technology (together with traditional investigative
work) has become vital in fighting fraud.
• The shift away from “pay and chase” to prepayment fraud
detection demands better technology solutions for better, more
efficient and more immediate data analysis.
Adjusting to the Changing Threat
The Role of Technology
The CMS Example
• A 2010 law established predictive analytics technologies requirements
for the Medicare fee-for-service program.
• CMS launched its predictive modeling program July 1, 2011,
called the Fraud Prevention System (FPS).
• Employs risk scoring based on sophisticated algorithms and
models to prioritize integrity workload.
•The first-year report is anticipated beginning of October 2012.
• National Fraud Prevention Program—holistic approach involving
predictive analytics for claims and provider screening for enrollment.
• Automated Provider Screening (APS) system launched in Dec 2011.
Adjusting to the Changing Threat
The Future is Now: Data Analytics
This Idea encompasses concepts such as:
•
•
•
•
•
•
Predictive Modeling
Retrospective Modeling
Rules (based on algorithms)
Predictive Scoring Models
Data mining queries
Billing patterns
Caution: There are challenges with the new wave of technology-based
fraud-fighting tools: false positives, unmanageable numbers of leads,
technology demands investments in training, etc.
Adjusting to the Changing Threat
Maintaining a Sufficient & Skilled Anti-Fraud Workforce
• The shift to investigative work that’s dependent upon technology
solutions does not diminish the need for human capital—in fact, the
increased complexity urges greater investment in the anti-fraud
workforce
• Fraud units must make adopting new skills and attracting different
types of workers priorities
• The mercurial nature of health care fraud—with constantly
changing schemes—requires that investigators keep pace
• Continuing education and training are necessities
Adjusting to the Changing Threat
Continuing to Build Upon Our Successes with
Information Sharing, Cooperation and Partnership
• Identify like-minded partners at home and abroad
• Build upon relationships and establish trust
• Health Care Fraud is a global problem and we need to look
beyond our own borders for solutions and ideas
• The promise and value of GHCAN
Opportunities Exist
• The problem is enormous—the resource
investment will likely never be big enough, therefore,
we must prioritize to efficiently use the resources we
do have.
• Our best chance to effectively combat health care
fraud involves all of us working together, building
pathways for information sharing, cooperation and
partnership.
Questions?
Contact
Louis Saccoccio
Chief Executive Officer
NHCAA
[email protected]
202.349.7990
2nd Global Summit
Healthcare Fraud:
Prevention is better than cure
25-26 October 2012
Beaumont Estate, Old Windsor, UK

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