MUSIC DAN: We’ve all heard the horror stories of
fraudulent behavior by business professionals across the country. But how
common is it in the health care industry and could it happen to you?
The answers might scare you. MUSIC DAN: Thanks for tuning into
Blue Promise. I’m Dr. Dan McCoy and I’m the president of Blue Cross and Blue Shield
of Texas. I’m joined in the studio today by Ryan Zarfoss He’s our senior manager of
special investigations here at Blue Cross. OK Ryan, start off here,
what’s Special Investigations? RYAN: Ok, Dan. Special
Investigations is really the group that any insurance company has
to look further at fraud, waste and abuse. We don’t really have a requirement to have
an SIU or Special Investigations Unit but there is clear rules that say an insurer like us have to have
a way to detect and prevent fraud, waste and abuse. DAN: OK. So, before you
started to, so these terms, I think most people kind
of group them all together. It’s kind of like you know it’s just a wasteful
money. People are stealing money, things of that nature. But what is fraud,
waste and abuse? RYAN: OK.
Great question, really simple. Fraud is intentional,
and fraud is a misrepresentation. Here at Blue Cross we get thousands
of claims a day. Most cases of fraud means that somewhere on that claim form that we
process there’s probably something that’s not true. Not in every case, but in most. So, it’s intentional
and there’s a misrepresentation to try and get paid DAN: So, is that a crime? RYAN: Very often it’s
going to be a crime. It’s a federal crime. It’s also a crime at the state
level under a number of different statutes. DAN: Ok, so let’s go
about waste. What’s waste? RYAN: Waste is just excess or sloppy
use of resources. I mean think of it as ok you’re going into an O.R., they
use up a lot of surgical trays equipment. You’re doing needed work but maybe you’re
inefficient and you really use up too much stuff. That’s waste and it can often get billed
and paid for by an insurance company DAN: And eventually a customer. RYAN: And eventually a customer. DAN: Or a patient.
RYAN: Right DAN: What about abuse? RYAN: Abuse is really just
performing services that you really shouldn’t, that you really don’t
have entitlement to. Kind of like misuse of things under
fraud but with abuse there’s no intent. You might really be doing the services,
but they’re just not really needed. DAN: Ok so why is this important? RYAN: Why is it important?
There’s a real cost to all of us whether we’re the members, whether
we’re employers. There’s a real impact to us that ultimately
trickles down to who pays. DAN: So, any idea on what the
impact of that cost would be? RYAN: Oh sure. You know we
have investigations in our department which span all types of cases and
there is one where it’s still ongoing. There’s an impact of about
20 million to a single employer group. DAN: So, these kind of fraud in
schemes if you will, sound pretty sophisticated. So, tell me a little bit about the team that
we have here, and the industry usually has, to kind of help detect this? It seems like
it would require some special expertise. RYAN: It does and we’re very fortunate in
Blue Cross Texas to have a really, really complimentary group of people.
I’ll start with a data analytics folks. We have people that their sole role is to
look at what’s going on with claims and other information coming to our company and to
see anomalies, to see things that don’t look right, and they identify schemes in many
cases right off the bat from doing that work. And they lead to
investigations in the company. DAN: This might be an example that you probably
don’t need 20 wheelchairs within a 3-week period? RYAN: It could very well be something like that. They pick up on things that don’t meet the norms that we see
across industries or provider types and they refer them over to the
investigation side. So, we’re strong in that area. Another group that we have is we have people
with professional experience in this company whether it’s claims processing,
coders often have clinical backgrounds. They’re the ones that answer the
questions. Does this actually look right the way it’s presented to us? They know
what the right answer is. They’re part of SID. DAN: So basically, that’s a little bit of
a tacit knowledge of just people being in the industry for a long time.
They can look at the smell test. RYAN: You need that. It’s
absolutely essential in what we do because we also have medical
directors as part of Special Investigations. They’re the ones that are reviewing the medical
documentation under those claims when we ask for them to make sure that people are following those
medical policies. And also, our reimbursement policies. We have attorneys in SID as well
to make sure we stay on track legally. And then there’s the last part that’s you
know I’m one of the investigators or part of the investigative team and we get those from
people who have been in the industry a long time. We also have investigators with
a little clinical background as well. And then there’s people like myself
again who come from law enforcement. DAN: But really it takes that kind of team
approach because it, I’m going to kind of make a suggestion here and you tell
me if I’m right. Health care is complicated, and that complicated nature probably
lends itself to fraud, waste and abuse. RYAN: It does, health care like
we were just talking a minute ago, there is a tremendous
learning curve in addressing fraud. So, it takes it takes knowledge
of what a fraud scheme is. It also takes knowledge of
what the health care industry is all about. It’s a lot of moving parts that you
have to put together to understand, is what I’m seeing right
or is what I’m seeing a real problem. DAN: It also seems to me in maybe
as a physician that a lot of what happens in health care is based
on trust. So, you trust your doctor, you trust the pharmacist, you trust the nursing,
you trust the billing that comes from the office. So, a lot of people are kind of they
don’t even think that it crossed their mind that this activity this procedure,
this bill, could actually be fraudulent. And that’s one of the challenges
isn’t it? Because getting people to actually think about it
because they’re there in this trust relationship. RYAN: It’s absolutely a trust
relationship and it’s a problem if you ignore what’s going on underneath
just your visits to a doctor. What I mean by that is, when we send out
those explanation of benefit forms it’s a really good idea for you to look at those to understand
what’s being billed and what’s being billed by whom. Just doing that is a great deterrent or a
great indicator to somebody that hey is there a problem, maybe I just need to call my
doctor and find out what’s really going on here. Or maybe there is a bigger
problem and I need to report it. DAN: So basically, what may need to
happen is somebody may need an explanation of that explanation of benefits right? RYAN: Correct. DAN: It’s nothing wrong with calling up
and saying hey these codes on here I don’t really understand.
Does this make sense to me? I mean I just had, I just was on an
airplane and a member you know said hey and they always show me their
Blue Cross card when they find out what I do. And they said you know I just got
home from vacation and I had a whole list of pharmaceuticals that were
delivered to my door that I didn’t order. Right. And I realized that I’d been gone for three
months and I had been paying I’ve been getting billed for three months for
these pharmaceuticals, what do I do? And I told them that you know I said I’m from
Blue Cross, pull out your card and call the number but tell us what do you do if you’re a patient
and you think you’re a victim of fraud waste or abuse. RYAN: OK. There’s a number of
things that you can do. First, we talked about hey maybe it just needs to be a
call to your doctor to understand what’s really going on. It could be that ok, I still
don’t understand what’s happening. Now, I really do want
to report this as suspected fraud. That’s a little sometimes challenging for
people, it may unnerve them to do that, but we provide multiple ways
to do that. There’s a phone number that you mentioned,you can go on
our Web site and make an online report. You can report fraud to even the Blue Cross
Association or even a local investigative agency. But it’s important once you become
convinced that there is a problem that your doctor can’t solve for you,
that you consider reporting it. DAN: And it’s also not just
not just physicians, either right? I mean the interesting thing about health
care today, a lot of other a lot of other components of what people pay for health care,
everything from home health to pharmaceuticals in nature so that also lends
itself to that complexity too. RYAN: It absolutely does. There is
a lot that goes in to formulating claims, to sending us things that really
like I said it’s a learning curve for everybody involved not just in the company
but in SID to get a hold of what might be the new problem,
the new type of issue of the day or the year. DAN: Well, so the person on the airplane
has an interesting story and she said you know I don’t know that I want to do
that, because I really like my doctor, so I want to keep my relationship,
right. But I have a feeling that if they pick up the phone and they call
that number and they want an explanation, you don’t just run out an arrest the doctor. RYAN: No, no, we don’t do that.
Here’s really what happens when you call. First of all, every call to our fraud hotline
for example gets answered and every one of those gets forwarded to
Special Investigations. At that point, we’ve got some of those people
I mentioned earlier those people with a long in the tooth company experience
who understand the claims process. They look at those and say hey maybe this
is a service unit issue where we need to send this back to the right expert here to give
that member a call and explain to them what’s really going on with this claim.
Others, they might be indicators of fraud and that’s when I look at
them and there’s quite a few of those. And my job is to really either decide this
is something we need to handle, or this is something that might even already connect
to an ongoing investigation or department. I spend a lot of time on that prioritization,
on that connectivity issue with figuring out what do we do with this
member’s complaint or concern. DAN: Let’s walk through a couple of
scenarios. It can be interesting for our audience. Let’s say for instance that airplane neighbor
of mine sitting next to me, you call and you look at the information and it looks like
they may be using a few too many surgical trays and you know you look at the rest of
the data and it’s not much there. What do we do? Do you educate the provider, or I mean
what’s the next steps in that in that scenario? RYAN: Education is a core
component of what our mission is. Not everything that we do leads to a refund
or recovery or even a law enforcement referral. We do what we call a peer to peer
education with our department. If it’s something that we initially look at
and spend the time analyzing or even investigating and then we basically determine look, this
is really just the provider not understanding exactly how their work is supposed to fit
in with you know our company policies that we do, and we connect with them,
but we do the education. It might be in person. It might be you know on a WebEx or some
other electronic form, but we attempt to do this in person as much as possible and we’ll review
step by step medical director to that provider. What the concern is, what the right way to
go is, and then we’ll probably be monitoring that situation after that point to
see if there’s any change in behavior. DAN: Because over the years I’ve known
your group for a long time here and got to know you, many of these things that happen are it could be
it’s always been done that way but the policy’s changed. I went and saw a coding consultant who showed
me how to raise my revenue and said it was OK. Maybe one of my buddies, I joined the
practice and that’s what they do in this practice. And so, I just sort of followed suit
or maybe I don’t even look at my bills. Is it fair that some degree some of this may
just be not oversight in not knowing the rules. RYAN: It is it’s very fair to say that you
know not everybody is a coding expert. There is a lot of opinions
on what is correct coding. In fact, there are examples to add to the
complexity. Not every payor has the same set of rules. And if you’re a provider and you are
billing this company and that company, there are some differences. And that’s
why we take the education component seriously to make sure providers can you
know if necessary refocus and understand exactly what the Blue
Cross policy is on that issue. DAN: And there’s absolutely opportunities
where clearly though this was an intentional way to take money from the patient either
through their premium, through their insurance product or directly from the patient.
And what do you do about those? RYAN: OK. You’re really talking about
fraud those cases that are clearly, clearly not accidents are not just
lack of education, those we carry further. And another one of our core roles is when
a case meets the level of fraud that we believe, we will refer it to a law enforcement entity
and we want to do two things when we do that. We not only want to be able to clearly state
where the fraud is that we see, we want to give some pointers and guidance to
those law enforcement entities on. We think if you look here, you will find additional
places where the fraud that we allege is being supported, you know we’re an insurance company,
we can’t do everything that law enforcement does. But one of the nice things about having this
former law enforcement, we can kind of project and go, we know where we would go
next in this type of investigation. So, we want to tell these entities
here’s what we think you would find if you go elsewhere
and look in these logical places. DAN: And actually, just to be complete here. You know we’ve kind of picked on the provider
community, we’ve used doctors in these examples but in reality, it’s not just physicians,
right? Even people that hold the card, members can commit
fraud I mean it’s unfortunately it’s something that’s kind of open
door for a lot of people to walk into. RYAN: This is one of again the many challenges
we’ve already talked about a few of them but you have not only doctors, you have marketing
companies, you have unlicensed individuals that acquire ownership of some of these service
companies, whether it’s durable medical equipment, home health agencies, whatever you want to
list there is, the door is open for all kinds of players not just those certified,
licensed, and credentialed people. DAN: And I think also it’s fair to say that
in my role, we learn from these schemes and make our systems better. Right. I mean that’s one of
the one of the big take homes from your department. RYAN: We do and part of that education
process that goes on is that’s also being reported up through SID into these other entities
that we work with within the company. We have regular connection you know with
network representatives, with our legal department. They’re fully aware of what we do in in in
certain settings that we have regularly with them. So, there is that learning component so that
we can improve our process and improve our products. DAN: So, one of the challenges that I’ve
heard before and it would be interesting to get kind of your thoughts on that is that I’ve
had people say well why don’t you just look at every claim or how come you don’t
catch all the fraud that goes through there? But there are some challenges to that. RYAN: There is, there is a lot of challenges. We process of course a tremendous
number of claims on a daily basis. And here in Texas, we are also subject to
some pretty rigorous prompt pay rules. We just don’t make arbitrary decisions about
taking our time to pay claims, we pay them in a timely manner because the law says we
have to and because fraud detection and fraud reporting takes a little work and a little
effort we don’t always know at the get go that you know hey this entity out there
that’s billing us is conducting fraud. If it takes a few months for us to identify
it or for us to have that reported to us. Fraud can all already be
recurring can already have been paid. And in a number of cases that’s what happens. DAN: So those prepay laws are really kind of in some
respect, they limit the ability to do fraud detection? RYAN: They are a challenge to doing fraud
detection. They don’t, it’s not a hurdle we can’t cross. But it does make you look at some
cases and go OK. We’ve already had fraud. We can see it. It’s that money is out
the door. So maybe in what we’re doing we need to shift gears and have a component
of we’re gonna try to get that money back somehow. It may be internal process,
it may be working with law enforcement. DAN: So, Ryan, it’s been it’s really been
a great discussion. So, if I’m listening and I’m a patient what can I do to prevent
fraud, waste for abuse from happening to me? RYAN: There’s a couple of things you can do. First of all,
we talked about those explanation of benefit forms. I know a lot of us get them
electronically now and they might come online. But please take a look at them
review them just understand that hey, does this actually connect to a real service
I had, is this provider really the one that I recognize? Doing that goes a long way.
The next thing that you should do is be very, very aware that you just
don’t hand out your insurance information. There’s all kinds of scams going on where
people are soliciting via the phone and online to get that number off
of your card and your name. You should only be giving it out when you’re
seeking medical treatment and services and then you just educate yourself on you know
the best practices that you can go through for fraud. If you don’t know how to do that, go to our
website, go to Blue Cross and just type in fraud, you’ll find all kinds of tips to remind
you how to stay aware of fraud schemes and how to protect yourself
from unnecessary costs. DAN: So Ryan, thanks for being here today.
Thanks for joining us for this episode of Blue Promise.