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Health plans are used to risk. In fact, it’s part of their DNA. But if there is one risk health plan leaders would like to never have to deal with – the risk of fraud might rank high on their list.

At the recent RISE National Conference in Colorado Springs, Christi Grimm, HHS Inspector General, explained to an audience of more than 1,700 health plan executives, providers, and vendors exactly how challenging fraud, waste, and abuse have become in healthcare.

Fraud Associated with Medicare Advantage

Ms. Grimm said the problem is particularly acute in Medicare Advantage (MA) now that enrollment has surged.

To emphasize the point, she told the audience that across 17 Office of Inspector General audits in 2019, the staff could not find support for 69% of diagnoses used for risk adjustment. She said the staff also identified a total of more than $100 million in overpayments made by Medicare to plans.

Ms. Grimm added that fraud is not isolated to health plans, but also involves providers and vendors as well. Ms. Grimm also said it affects Medicare’s ability to serve current enrollees, while also impairing the long-term sustainability of the program itself.

The Inspector General provided examples of how fraudsters have jumped on the Medicare Advantage bandwagon.

In one case, the husband-and-wife owners of a medical equipment company were fraudulently billing Medicare B for orthotic braces. When law enforcement put a stop to those efforts, the couple opened a new company and started billing Medicare Advantage plans instead.

According to Ms. Grimm, another area of concern for the OIG is gaming, where the risk involves upcoding, stinting on care, or misrepresenting data. For example, the Office found that 20 companies received over a half billion dollars in risk adjustment for patients diagnosed with serious mental illness, such as depressive, bipolar, and paranoid disorders. And yet, according to an audit by the OIG, no service records showed these enrollees received treatment for their illness.

Three Reasons to Combat Medicare Advantage Fraud

While she felt the risk of fraud was real and significant, she explained three reasons why she thought health plans should prioritize combatting the risk.

1. Healthy compliance is smart business.

First, she said plans have a stake in the Medicare Advantage program achieving its goals of delivering equitable, comprehensive, person-centered care that is sustainable and affordable. She said fraud, waste, and abuse can impede those goals and jeopardize the future success of the program and the bottom line of health insurance companies.

2. Medicare Advantage is under increasing scrutiny.

Ms. Grimm said plans can demonstrate that they take problems seriously through proactive self-policing and responding effectively to the problems unearthed. Companies and others that dismiss problems uncovered by oversight often find themselves defending their actions later in other forums, such as in relator lawsuits.

3. Because fraud schemes are increasingly sophisticated, there is tremendous value in collaboration among plans and with law enforcement to stop fraud.

She added that promising communication models include having plans’ investigative units hold regular meetings with Federal and state law enforcement. Good communication, she said, can and does detect and stop fraud early.

Finally, she pointed out how critically important it is to have complete, accurate, and timely data. Improving data within Medicare Advantage, she said, is essential to fighting fraud, waste, and abuse.

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