In previous blogs I have discussed how to detect possible employee workers compensation claim fraud and possible inflated workers compensation claims.  This blog will discuss one other area of possible fraud that your organization may encounter - fraud committed by healthcare providers.

This involves medical provider bills for services not provided, intentionally inflating charges for services, or bills for services provided by non-licensed or unqualified personnel. In today’s healthcare environment the bulk of problems your Claim Coordinator will experience in this area are due to honest, yet extremely costly and frustrating, errors in provider billing methods. You personally may have experienced this when you or a family member received healthcare. Many doctors and hospitals provide bills that are incorrect for a wide variety of reasons. If not carefully reviewed these costs can be paid by the insurance adjuster and, ultimately, by the organization. However, there are times where medical bills are fraudulent, and these should be handled promptly and appropriately. Most states have stringent laws protecting your organization from fraudulent billing and have provided methods for reporting incidents for legal action.

There is one other reason why bills may be in error. Frequently an injured employee will go to the clinic, doctor or hospital and tell the healthcare practitioner about conditions that are not work related. The practitioner will treat this unrelated condition and bill you on a consolidated basis. In other words, part of the bill is work related and part is not.

For all these reasons the Claim Coordinator should insist on copies of all medical bills and require that they be itemized. Otherwise the Claim Coordinator will not be able to identify the items that are not work related, and the organization will pay the price. Many insurance carriers have services that carefully review medical bills for accuracy and fraud. It is strongly recommended that the organization review these capabilities with the underwriter and place its insurance only with insurance carriers that have this service.

Red flag indicators that may signal health-care provider fraudulent activity include:

• Injured worker doesn’t recall having received the billed service;
• Provider’s medical reports read almost identically, even though they were submitted for different patients with different conditions;
• Much higher health-care costs than expected for the allowed injury type;
• Frequency of treatments or duration of treatment is greater than expected for allowed injury type, especially for older (non-catastrophic) claims;
• Frequent billing in older (non-catastrophic injury) claims;
• Larger volume of prescription drugs billed than expected for the allowed injury type;
• Billing for treatment on consecutive dates of service for minor allowed conditions;
• No change in treatment regimen or no measurable improvement after an extended period;
• Same provider(s) and attorney(s) are repeatedly associated with questionable claims;
• Unexplained sudden increase in a provider’s billing and payment levels;
• Provider services are billed (for non-emergency care) for dates of service on weekends or holidays or on dates when the patient was hospitalized;
• Provider bills for dates of service within time periods for which the provider had previously billed and received payment;
• Provider bills for dates of service after the effective date for change of provider of record;
• Managed care organization knowingly participates in schemes intended to cause BWC to pay monies that it otherwise would not pay;
• Documentation does not support service billed and/or is inconsistent with the services billed;
• Frequent delays in the submission of requested records;
• Great distances between the provider and injured worker;
• Submission of bills with non-industrial diagnosis or bills resubmitted with codes changed to an allowed diagnosis;
• Billed procedures are inconsistent with allowed conditions or industrial conditions;
• Billed procedures are identified by American Medical Association as being for “one or more areas” billed with multiple units of service;
• Billed procedures are for evaluation and management codes only;
• Provider is actively billing multiple claims for an injured worker;
• Day or date of service is inconsistent with the type of provider;
• Provider billed for services that were not likely to have been performed.

If the Claim Coordinator encounters any of these telltale signs he or she should consider doing the following. First, report the incident to the claim adjuster. The adjuster will be pleased to know of this situation and should not pay the medical bill until it has been carefully investigated and audited.

Second, inform the injured employee that the bill is being investigated. Often the healthcare practitioner will send the bill the employer after 30 days for payment. This will irritate the employee and even encourage them to get an attorney if they have not already done so. The Claim Coordinator should tell the injured employee that if they get a bill from the healthcare provider they should bring it to the Claims Coordinator for handling. Also, reassure the employee that all accurate medical bills that related to their work-related injury will be paid once they have been verified.

Third, report the incident to your state regulatory authorities. Quite often the regulatory website has a link that will provide information on how to report these fraudulent acts.