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If Medicare Pays, You Pay...Right?

If Medicare Pays, You Pay...Right?

by Pat Bailer, Life/Health Global Chief Claims Officer, Gen Re

There is rampant fraud and abuse in the Medicare system. It’s no secret healthcare fraud costs taxpayers conservatively $68 billion each year. The impact last year looked something like this:

  • $377B Medicare payments were made, of which:
  • $52B were fraudulent/improperly made or 13.7% of claims paid, and:
  • $2.4B of the $52B was recovered… So, where did the rest go?

Healthcare fraud crosses all product lines such as Individual Disability, Group Long Term Disability, Short Term Disability, Medicare Supplement, Dental and Critical Illness.

Medicare fraud’s impact isn’t limited to healthcare. It can and does impact liability decisions in multiple products. If you take a peek at some of the headlines posted by the Office of the Inspector General, you’ll see fraud crosses all product lines in our industry:

  • Billings Hospital pays more than $23M to resolve false claims
  • Hollywood doctor charged with bilking Medicare out of $33M by charging for unnecessary services and medical equipment
  • Respironics to pay $34.5M for false claims to Medicare, Medicaid and Tricare for sale of masks to treat sleep apnea
  • 9 individuals in New York charged in connection with $58M in physical and occupational therapy scheme
  • 11 charged with $110M in HHC and glucose monitor devices

The costs are not limited to paying claims that should not be paid. Undetected and unreported fraud also increases premiums paid by honest Insureds.

The old school of thought is that if Medicare pays, the carriers pay. However, Medicare Supplement claims need to be managed just like any other product in your company’s portfolio with the same attention to detail, policy language and specific facts of the claim in mind.

Applying the SIFT concept in your claim organization should be the first step.

  • S = Shift resources away from old school thinking to new investigative mindset
          –  if Medicare pays, we MAY pay
  • I =  Implement processes and procedures to identify and prevent potential fraud
          and abuse
  • F = Fight ever-evolving fraud with the right tools
  • T = Teach fraud prevention, and stay apprised of emerging fraud schemes and
          trends to remain vigilant

Join Gen Re in our live polling session at the ICA Annual Conference to learn more about emerging fraud trends/themes, schemes, providers and vendors negatively impacting our industry and the role, if any, machine learning has in detecting and preventing fraudulent claims.