SmartLight Analytics

Reducing healthcare costs for self-funded employers

fraud

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Employers face COVID-related fraud schemes

While the government works to prosecute COVID-related fraud schemes, employers have ways to eliminate those lost dollars, too

As the pandemic seems to be easing its grip on the United States, analytic reviews of healthcare claims are uncovering the after-effects of the widespread COVID-19 testing on self-funded employers’ healthcare spend over the past year. Employers saw costs for testing even with the free options provided by the government and some found fraudulent or abusive add-on testing that resulted in wasted dollars. The dramatic increase in the use of telemedicine is also an area ripe for fraud, waste, and abuse in the future as the pandemic wanes but remote healthcare looks to stay.

Several factors needed to tackle the overwhelming aspects of the pandemic made it easier for an unscrupulous few to take advantage of the massive amounts of COVID-19 testing, including:

  • New codes added to address the COVID-19 public emergency (e.g., modifier CS)​.
  • COVID-19 related testing no longer require an order from the treating physician.
  • Relaxation of the physician ordering rules could allow more leeway for fraudulent billing of unnecessary add-on testing​.

Instead of charging $50 or $150 for the test, SmartLight Analytics found suspect labs bill more than $500 for add-on testing with COVID claims​. One lab was found to have billed identical codes in almost all its claims despite differing diagnosis – a red flag for fraud. The federal government’s recent announcement last month regarding COVID fraud cases confirms that fraud is happening across the country.

The Department of Justice announced in a statement May 26, 2021, that it had found COVID-19-related scams in the hundreds of millions of dollars. In total, the DOJ charged “14 defendants, including 11 newly-charged defendants and three who were charged in superseding indictments, in seven federal districts across the United States for their alleged participation in various health care fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.”1

While the government will continue to pursue COVID-related fraud, including telemedicine and other schemes,2 employers are left waiting while investigators build criminal cases. This was an issue prior to the pandemic with investigations into healthcare fraud. In addition to the federal government, insurance companies have Special Investigations Units that work on payment integrity within their claims. However, to build a case against a suspected fraudulent provider, they will often continue paying claims – which means the employer continues to lose money.

A more immediate option for self-funded employers who want to avoid losing more money to COVID-19 fraud, or any other fraud for that matter, is to have concurrent reviews of healthcare claims on an on-going basis by a third-party. SmartLight Analytics is finding fraud in employer claims right now and arming employers with the information they need to tackle the issue alongside their payer partners. Identified claims can be addressed by employers and insurance providers while the government continues to work to uncover schemes and prosecute scammers.

In the same May 26 announcement, the DOJ along with the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) announced “it took adverse administrative actions against over 50 medical providers for their involvement in health care fraud schemes relating to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.”1 Those numbers may rise before they dip as the pandemic slows. But while COVID-19 testing may slow, the pandemic has likely permanently left telemedicine at the forefront of healthcare. And if the DOJ’s findings are any indication of the future, telemedicine could be the next area ripe for fraud.

In another type of COVID-19 health care fraud scheme announced by the DOJ, “defendants are alleged to have exploited policies that were put in place by CMS to enable increased access to care during the COVID-19 pandemic. For example, pursuant to the COVID-19 emergency declaration, telehealth regulations and rules were broadened so that Medicare beneficiaries could receive a wider range of services from their doctors without having to travel to a medical facility. The cases announced today include first in the nation charges for allegedly exploiting these expanded policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that did not occur.”1 It is likely similar fraud exists in commercial payer claims.

“Our goal is to have a more immediate return for employers who have already been hard-hit by the pandemic and years of rising healthcare costs,” said Dr. Franklin Baumann, Chief Medical Officer at SmartLight Analytics. “The great majority of healthcare providers are owed a huge debt of gratitude for the work they did during the pandemic and for what they continue to do daily. We aim to help employers avoid losing precious healthcare dollars to that small minority of scheming providers. And what we’re seeing in our data is that our inferential analytics followed by our clinical reviews is uncovering COVID-related fraud and will likely continue to find it for the rest of this year at the least.”

1. “DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19.” Department of Justice, U.S. Attorney’s Office Western District of Arkansas. May 26, 2021.  https://www.justice.gov/usao-wdar/pr/doj-announces-coordinated-law-enforcement-action-combat-health-care-fraud-related-covid

2. Madden, Jason. “Combating COVID Crimes: First Wave of DOJ Enforcement Actions Target Fraudulent Schemes.” Proskauer Health Care Law Brief. June 9, 2021. https://www.jdsupra.com/legalnews/combating-covid-crimes-first-wave-of-5967109/

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Exposing waste in our healthcare system means taking action now

The rising cost of healthcare in the United States is unsustainable for big companies who must provide health coverage for their employees in order to attract and retain talent. This was an issue long before COVID-19 became a regular part of our vocabulary and will be long after the pandemic is under control. Seeing healthcare costs through the lens of data analytics gives employers with self-funded healthcare plans the view to one way in which the problem can be addressed right now. Eliminating even a portion of the dollars being lost to fraud, waste, and abuse within healthcare claims would have a substantial impact in lowering per member per month costs for employers. Industry experts estimate that billions of dollars are leaking out of the system with no end in sight. Making a meaningful impact on the rising cost of healthcare can begin with using statistical, clinical, and claims expertise to deliver the most complete cost reduction solution directly to the actual stakeholders: self-funded employers.

As more and more companies shift toward the self-funded model for healthcare, business leaders have little awareness of how their dollars are being spent. There is waste within the system as well as significant fraud and abuse with extraordinarily little transparency. Since processing healthcare claims is outside the core competency of most employers, patterns of error often go unnoticed and result in the unnecessary spend of health plan dollars. Employers need the expertise necessary to evaluate payments for appropriateness in the form of independent, pro-active intervention on a regular basis and for every claim.

Insurance carriers, in the role of third-party administrators, do their best to manage the waste in the system while processing claims, but their focus lies on moving claims fast and paying claims. The addition of an independent review using statistical, clinical and claims experts can deliver the most effective cost reduction solution on the market, customized to each employer’s unique population. There is real value – trackable ROI – in eliminating fraud, waste, and abuse from healthcare claims. Finding providers duping the system through pass-through billing schemes or waste in the form of medically unnecessary testing or abusive ER users can bring employers up to 5% or more reduction in costs.

The best reviews are done with independent experts and carriers as partners in the process of analyzing claims and identify areas for savings. When a regular and complete review using methods such as inferential analytics and predictive modeling is used to help carriers do their job it can fill in the gap when it comes to fraud, waste, and abuse oversight.

Finding the well-hidden and overlooked fraud, waste and abuse that is contributing to the rising cost of healthcare can be done. It just takes employers who are willing to address the issue and work through process that will ultimately drive value and improve care for their employees.

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Healthcare Fraud Investigator joins SmartLight Analytics team

SmartLight Analytics recently welcomed Bill Young to its team of analytics and clinical experts as the new head of the clinical operations. Young brings a wealth of knowledge, including 20 years of federal healthcare fraud investigative experience, to the SmartLight Analytics mission of helping self-funded employers reduce healthcare spending by identifying and eliminating fraud, waste, and abuse in healthcare claims.

Young spent the last 13 years with HHS/OIG supervising and conducting criminal and civil investigations of waste, fraud and abuse in Medicare and Medicaid programs. He has comprehensive knowledge of investigative techniques, best practices and HHS Compliance Guidance.

“Bill’s experience will be extremely valuable to SmartLight and our customers,” said SmartLight Analytics CEO Asha George. “We are continually working to bring a new level of depth to our analytical, clinical and data expertise. Bill’s background in working with Medicare and Medicaid will give us great insight in working with these claims. He is also a great addition to our leadership team.“

“Having worked on the government side of healthcare, I am looking forward to taking the lessons learned from 21 years of working with public insurers and applying those lessons to the private paying community,” Young said of his new role.

Young has a law degree from Saint Louis University and served as an adjunct instructor at the Federal Law Enforcement Training Center in Glynco, GA. He served as Lead Special Agent assigned to white-collar/healthcare fraud investigations for HHS for seven years. He spent 13 years as Assistant Special Agent in Charge for the HHS Office of Inspector General Office of Investigations supervising and conducting criminal, civic and administrative investigations of waste, fraud, and abuse related to HHS programs including Medicare and Medicaid. His team of investigators produced 357 criminal convictions and civil monetary recoveries in excess of $334 million.

Young will work with a team of analysts to review model output to identify fraud, waste and abuse in clients’ claims data and communicate those findings to the client’s administrative partner to ensure the issues identified are addressed.

SmartLight Analytics uses advanced inferential analytics coupled with expert clinical claims review to drive cost-cutting solutions for large, self-insured employers. As a partner with the Health Transformation Alliance, SmartLight works with some of the nation’s largest employers.  With expertise in statistical analysis, healthcare data, and clinical medicine, SmartLight helps organizations prevent unnecessary fraud, waste, and abuse in employee healthcare claims.  

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SmartLight Analytics named “Outstanding Service Innovation” winner in the D CEO 2020 Excellence in Healthcare awards

SmartLight Analytics is honored to be recognized by D CEO as a 2020 Excellence in Healthcare Award winner for our work to reduce healthcare costs for self-funded employers. The work to identify and eliminate fraud, waste and abuse in healthcare claims this year has become especially important as employers continue to provide coverage for employees during the pandemic.

For the team at SmartLight Analytics, however, the opportunity to make an impact in making healthcare more affordable is our true reward. We also want to thank Health Transformation Alliance, who nominated SmartLight for this award. Our partnership with HTA has broadened our ability to help self-funded employers across the country to eliminate wasteful and fraudulent spending in their healthcare plans. Moving into 2021, we are ready to partner with more companies to reduce healthcare costs without disruption to the quality of care and coverage for their employees. Making healthcare more affordable is our continued mission.

D CEO 2020 Excellence in Healthcare winners

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Eliminating fraud, waste and abuse in employee healthcare claims adds value without disruption

By: Vispi Jilla, SmartLight Analytics Principal Advisor 

Healthcare and benefits are tools companies use to gain a competitive advantage to attract and retain talent. Both are used in the recruiting process to attract high performing employees. The question is how do you continue to offer competitive benefits to attract and retain talent while costs for healthcare, in particular, continue to rise?  

Businesses focus on profits and cost savings. So, reducing the cost of healthcare benefits for self-funded employers is paramount. It is important to provide the best coverage to attract and retain the top talent, but without jeopardizing company profits. SmartLight has the tools — not just the analytics but the medical expertise — to find fraud, waste and inefficiencies existing in employers’ healthcare spending. Identifying, remediating, and eliminating these costs will allow employers to find those savings needed to limit excess health costs and continue providing quality healthcare coverage to employees.  

How are savings realized? When it comes to reviewing claims data, what many do not understand is that statistical models and algorithms are not the only required tool to find payment errors in healthcare claims. Experience and expertise is also are instrumental to detecting outlier patterns and anomalies in claims. Many companies rely on analytic know-how but do not have the expertise in house to review claims at this deep level. SmartLight combines data analysis and the clinical expertise to provide a new and significantly increased level of review. This depth results in greater savings.  

In most companies, executives rely on “runs” from payers, say BCBS for example, to explain the expenses going into employee healthcare claims. Most often, HR pays the expense without much review. Seldom is anything ever done to investigate the healthcare claims because the numbers are so opaque and the expertise is not there to analyze claims. Businesses classify the expense as “healthcare inflation” and just keep passing the increase on to employees in the form of higher premiums or co-pays or deductibles. The rising costs of healthcare can also eat into profits. 

Partnering with SmartLight Analytics’ team of experts provides is on average a 4X ROI. If you are a self-funded employer with $100 million in healthcare costs, saving $3-5 million from fraud, waste and abuse will allow you to pass that savings (instead of expense) on to your stakeholders in the form of profits, and to employees through possible reductions in premiums. Working to reduce these inefficiencies in healthcare claims can also help improve the quality of employee care. When done correctly, it is a win-win. 

HR is tasked with so many processes in today’s corporate world; these executives need an independent advocate with the necessary expertise to find and reduce the rising healthcare costs in their sponsored healthcare plans. Unlike an expense like purchasing steel or trucks where you can simply shop around for cost saving options, it is not easy to change healthcare providers. It can cause considerable employee dissatisfaction when changing insurance carriers.  The better option is to make your existing healthcare provider more efficient and eliminate fraud, waste, and abuse in the claims, it adds value without disruption. Then HR can focus on other things instead of spending finite resources on deciphering healthcare costs.