How to tame the $234B healthcare fraud beast

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Estimates suggest the annual bill for fraud in the U.S. hovers between $68 and $234 billion, or 3 to 10 percent of healthcare expenditures, while efforts to curb fraud have achieved modest success at best, according to a commentary in The American Journal of Managed Care. The authors recommended physicians partner with regulators and employ health services research to address “rampant” Medicare and Medicaid fraud and waste.

In 2010, the Obama administration launched a campaign to cut waste, which, according to a recent Government Accountability Office report, has yielded limited success, according to Laurence F. McMahon, Jr., MD, MPH, and Vineet Chopra, MD, Msc, both from the University of Michigan Health System in Ann Arbor.

McMahon and Chopra partially attributed the lackluster performance to the complex nature of fraud and abuse. “Despite these exacting definitions, no ‘line item’ on a healthcare claim isolates intentional fraud or abuse.”

Current less-than-fruitful approaches to identifying fraud rely on third-party recognition of aberrant claims, such as highly specialized computer systems and Strike Force teams. Although these methods have had some wins, the authors pointed out, “Less than $20 million of the $102 million spent on audits related to Medicare fraud has been recovered.”

Health services research (HSR) may help close the gap, according to McMahon and Chopra. This multidisciplinary field focuses on the relationships between access to services, costs, delivery and outcomes; and may be appropriate for investigation of fraud.

Three HSR tools pre-dispose the approach to analysis of fraud and abuse. HSR uses a robust set of statistical tools related to clinical practice, analyzes claims and billing data (i.e. the language of fraud recovery measures) and often targets high-cost and questionable interventions.

How might HSR detect fraud? The method could identify Medicare enrollees who undergo screening colonoscopy at shorter intervals than the 10-year guideline-endorsed interval, or find providers who fail to perform guideline-recommended testing prior to percutaneous coronary intervention.

Using HSR to identify fraud and abuse hinges on a few changes, according to McMahon and Chopra. The first is funding to attract HSR investigators. Second, local and national payers need to share detailed patient-, provider- and procedure-level data for analysis, a shift that requires clinically oriented information-exchange networks and databases. HSR investigators also must be indemnified from repercussions related to their work.

“Relatedly, we physicians must stop making excuses for those who systematically and predictably provide care outside accepted guidelines of practice. Instead, we must call this behavior exactly what it is—fraud and abuse,” wrote McMahon and Chopra.