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AHIP, Blues Join Anti-Fraud Effort

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Private health plans are joining with public plans to try to root out fraudulent billing.

America’s Health Insurance Plans (AHIP), Washington, and the Blue Cross and Blue Shield Association, Chicago, will be teaming with organizations such as the U.S. Justice Department, the Centers for Medicare & Medicaid Services (CMS) and the Federal Bureau of Investigation (FBI) in an anti-billing-fraud effort.

The coalition also includes large health insurance companies such as Humana Inc., Louisville, Ky. (NYSE:HUM); UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH); and WellPoint Inc., Indianapolis (NYSE:WLP).

Some of the other members of coalition are regional or single-state health insurers; the National Association of Insurance Commissioners, Kansas City, Mo., and other groups of regulators; and at least one property-casualty insurer — Travelers.

One coalition goal is for the members to “share information on specific schemes, utilized billing codes and geographical fraud hotspots, so that action can be taken to prevent losses to both government and private health plans before they occur,” according to officials at CMS’ parent, the U.S. Department of Health and Human Services (HHS).

Coalition members also want to gain the ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities.

Eventually, officials say, coalition members hope to develop and use better fraud detection analytical tools.

The board of the coalition, its data analysis committee, and its information-sharing committee will start meeting in September, officials say.

Several working groups that include both government officials and representatives from private organizations are meeting now to set up the structure of the coalition and create a draft initial work plan, officials say.

AHIP President Karen Ignagni is calling the start of the new organization a “major step forward in the fight against fraud and abuse in our health care system.”

“The cost of fraud can far exceed what is paid for falsified claims,” Ignagni says in a statement. “It can cause real harm to patients who are intentionally exposed to radiation, invasive surgeries, and medications they do not need, or suffer the lasting consequences of receiving a fraudulent diagnosis.” 

Many commercial health plans already operate special investigations units (SIUs) that use statistical analyses and traditional methods to identify and  investigate possible fraudulent claims, Ignagni says.

The SIUs appear to be helping large insurers get an average of about $3 in net savings per enrollee per year, AHIP says.

The average net savings appear to be $1 per enrollee at midsize insurers and $2.70 per enrollee at small insurers, AHIP says.