MUSIC DAN: Just like any other industry the health
care system is full of good and bad actors. Fraudulent behavior might be
happening right under your nose and it impacts more
than just your bottom line. MUSIC Thanks for tuning into
Blue Promise. I’m Dr. Dan McCoy and I’m the president of
Blue Cross 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. So, Ryan just before we get started,
we’ve done some podcasts before but what is fraud,
waste and abuse? RYAN: Really quickly,
fraud is just intentional misrepresentation. That’s when we get that claim form
and there’s probably something on there that’s just not true.
And in an attempt to get paid. Waste is just you know it’s being
sloppy or using excessive resources to accomplish needed
health care. And then abuse is really performing services
that really aren’t necessary. Now you may have
really performed them. That claim form is absolutely true.There
just no real basis for performing the services. DAN: So, you and I were chatting and
were kind of chatting in the break a little bit about a case that you just
worked on. Tell me a little bit about that. RYAN: We’ve had an interesting case where
a marketing company links up with one of those diagnostic laboratories or reference laboratories
and pairs them with a long-term care facility. And the purpose in doing that is those
diagnostic lab tests that the lab is going to do are going to be billed by that long-term
care facility. And the reason that happened is because that marketing company knew
that there was a contract provision under outpatient services that they
can make a whole lot more money by having the long-term care
facility bill for those labs. Our investigation, when we got rolling with
that, ultimately showed that that’s what exactly what was happened so
those claims were a misrepresentation. And oh, by the way, that long-term
care facility, they didn’t even have the capability to do the
services that they were billing for. And as a result, we paid
a whole lot of money for those services. And plus, there was probably in my
mind a patient risk aspect to that as well. DAN: Ok. So, let’s
back up because this is really kind of fascinating it’s kind of a complicated
case. So, let’s define some of these. I’m going to use a fancy crime
word here, perpetrators right. Let’s use this word. Let’s talk a
little bit about this marketing company. These are companies that really are, their
sole purpose is to figure out a way to bill a patient or an insurance company or an
employer for a service. That’s their sole purpose. RYAN: That is right. There are many
companies out there doing that right now. DAN: So, they’re going around marketing
their services, figuring out ways that they can enter the system. So that’s
the first thing that was kind of odd. The second thing is these
services might have a legitimate purpose in the right hands with the
right doctor in unique circumstances. I mean these are often tests that I mean
they’re tests that theoretically could be ordered. RYAN: In theory yes. DAN: In theory yes.
And so, they search out and find a way where maybe
a contract provision or something that’s outside the norm that can slot
around the radar like a long-term care facility. Which may or may not have any
reason whatsoever to order these tests. RYAN: That’s correct. DAN: And they just order the test through
there, so they can charge the employer more money. RYAN: They’re charging more
money because the contract allows it. And I would say you know when you go to
that patient risk aspect, in this particular case, those laboratory samples, you know those
drug testing and urine samples of blood samples. They were being shipped hundreds of
miles from where those samples were drawn, and those test results
were taking a long time to generate. All in the name of trying to get more money
for those tests because that reference lab wasn’t even an area or
regional lab for all those patients. So, think about that as a medical professional
about how long some of those samples are sitting. Are you really getting valid
test results from that? Are patients really getting the results that they need because
people are trying to make too much money? DAN: OK. So, I talk a lot around the
state and around the country and people and I mention fraud, waste and abuse and people immediately kind of go, they kind of minimize it. Well, okay somebody billed for the wrong test,
but this was a pretty big fraud and not unusual. RYAN: It’s not unusual in the fact that we’ve
got more than just one example of this going on with our special investigations unit right now.
We have multiple cases that touch on this concept. DAN: So, what kind of dollars are we talking
about? Are these like thousand-dollar frauds? RYAN: We’re talking in the case that I’m
referencing in a four-and-a-half-month period, one provider made about
nine point six million dollars. DAN: One provider. RYAN: One provider who really didn’t have
the capability to even perform the tests but because they got a higher reimbursement
rate there was money to be split between them, the lab doing the tests,
and the marketing company. DAN: So there’s a lot of people involved
in this scheme which isn’t unusual. But walk me through how these
people benefit from that kind of fraud. RYAN: OK. Well, again if you’re
paying more than you should have because the lab should have
only gotten say x amount of money. If you paid a lot more than that to another
entity, that entity has a relationship with a marketer and the lab and they’re regularly
making payments back to those other entities because that marketing company is controlling
where all of those laboratory samples come from. DAN: Ok. So, I’m pretty
familiar with this industry and it sounds to me some of
that might have been a kickback. Kickbacks aren’t allowed
in healthcare spending right? RYAN: Kickbacks are
not allowed in health care. Kickback arrangements are illegal and it’s
you know something that you often encounter when you start
looking at straight up fraud. DAN: So, we talked a little bit about the
patient safety aspect which is horrible. But how does it impact maybe the employer
that was paying for those for those services? RYAN: Sure.There’s a couple
different impacts to employers. First of all, is straight
up there’s cost impacts. If you’re a fully insured group with us you
know initially those claims just get paid. But at some point, you may come up for renewing
your agreement with Blue Cross and unnecessary and excessive services that were paid are
probably going to impact those insurance rate. Now compare that to some of our groups who
are administrative services only groups where it’s really their money, well they’re paying
straight up in a way for those excessive services, for that fraud. And that’s
coming out of their pocket. So first of all,
there’s really a cost aspect. And then second of all, there can be a
productivity aspect you know for employers. If you’ve got people, members or your employees
caught up in say bad care where they’re getting referred out for unnecessary
physical therapy or services that are repetitive, you’ve got people that may not be on
the job. They’re out there getting health care. And sometimes we see it as it’s not really
needed or necessary. In fact, it could even be harmful. DAN: So, it’s taking people away from
the time that they could be at work or even enjoying their time with
family. So, you know we have pretty sophisticated systems here at paying claims. I
mean we’re really good at detecting you know either something that’s coded incorrectly or
doesn’t seem to fit what the diagnosis was. But I think what’s interesting about this
example and I think I want you to talk a little bit about it. When
people are being intentional. I mean they’re being very
intentional to figure out ways to deceive. It becomes harder and harder
to solve these kind of crimes. Right? I mean it’s just every time you turn
around there’s another scheme out there. RYAN: That’s part of the challenge of working
in special investigations the schemes constantly modified to try and stay ahead of what we
learn as enforcement entities whether it’s the insurance side or working
with the law enforcement side. Very, very challenging
the schemes always change. DAN: So, we’re always watching, and we
had a great podcast on what we think patients and employees should watch for.
What should employers be able to look out for? RYAN: Employers should be really on the
lookout for I would say a couple things. First of all, is the basics that I kind
of touched on them a minute ago. How are your employees
doing? Are they coming to work? What’s attendance look like?
Are there changes you know in say a small employer setting? Is that key person
doing ok? In a large employer setting, do we have a measurable
change in just attendance or work patterns with our workforce
and why is that? Do we know through some reason that you know
there’s something out there now that’s drawing or people away and then also
on the individual level, behavior. And what I’m talking about here
is you know there’s also a lot of schemes that we look at that deal
with prescription drugs. And unfortunately, there are schemes that
will unduly affect our members by pushing or putting them on
medications that they may not need. Some of them just have bad side effects.
Some of them are actually highly addictive. So, be on the lookout you know through your
managers and through your mentors, through your employee assistance
staff in your company to be on that lookout change and behaviors
amongst your employees. DAN: And ask questions. I think
that absolutely that it’s ok to ask questions. What have you seen some
employers do to help battle it? RYAN: Ok. There’s really,
I think two ways you can go to address you know fraud
impacting you as an employer. One way is you know you
can change your benefits. An example that’s really recent is
we had one large employer group that had a certain
level of benefit for hearing aids. That benefit was we’ll
pay for a hearing aid every year. There’s no cap but that’s part of what
we offer. Well about 19 million dollars later and some criminal convictions
with an entity that was really pushing those hearing aids that benefit was
changed to now it’s once every three years. Now there is a price tag cap on that
benefit and the benefit in our estimation is very reasonable still.
But it did cause a benefit change. The other thing that you can do is a little
bit more innovative and I will use us as an example as a company
because we really really promote wellness. We train and educate our
employees on healthy habits. We offer them wellness services whether it’s
how to eat right or you know exercise programs. We also do things like you know that biometric
screen where you can get measured because preventive care is also a key to fraud
not just a healthy life. If you can stay out of your doctor’s office because you have good habits
and your employer encourages those good habits, you’re automatically addressing and reducing
the aspects of fraud as a byproduct of that. DAN: Well, Ryan this is great information
for our employers and great information for everyone. Thanks for joining today and thanks for
joining us for this episode of Blue Promise.