New Fraud Opportunities with Healthcare Reform
While much of the focus of the public discussion surrounding healthcare reform has centered on the expansion of coverage to the uninsured, we are all aware that the reform will also have a major effect on both fully-insured and self-insured employer sponsored plans. By now, employers should know that failing to meet government mandates for coverage and affordability will result in monetary penalties.
But a seldom discussed impact of healthcare reform on employers is their increased exposure to fraud, waste and abuse. For example,
1) No lifetime or annual limits: If plans have ineligible members or dependents on their plan… now there is no limit to how much employers could be inappropriately paying for coverage of ineligible members.
2) Extension of dependent coverage: Now that employers must allow dependent coverage to continue for an adult up to age 26, plans will have an influx of new dependents… that means more potential ineligible dependents.
3) Waiting periods limited: Employers will have to provide coverage within no more than 90 days… that means employers face the risk of paying for ineligible dependents sooner.
Employers that do not regularly conduct eligibility audits, to ensure that they are not extending coverage to ineligible members and dependents, will face a significant increase in risk due to employee abuse (intentional or not) of benefit coverage. Eligibility audits are a simple way stop inappropriate healthcare expenditures. The reality is that when rules change, “the ethically challenged” will find new ways to capitalize.
For more information on the impact of healthcare reform, check out McGuireWoods Healthcare Reform Guide: Installment No. 8.