Rebecca highlighted the fact that a good foundation based on fraud risk assessments needs to be established to fight fraud. She also points out that insurers and providers need to regularly audit all network activity to assess risk and potential vulnerabilities where holes might be found.

Her opinion on Healthcare Reform – it might lead to an increase in insurance fraud in the short term as information systems are adjusted and new rules are implemented but should eventually decrease fraud, as more individuals will receive health coverage.

The answer is surprisingly simply ­ it hits your wallet first. Insurance premiums are increasing at a staggering rate ­ 33% in the last five years. If this continues, most individuals will not be able to afford any type of insurance, costing taxpayers even more because they will be the ones footing the bill for the uninsured.

Insurance premium increases hit the employer even harder. Many times employers (especially small businesses) are forced to reduce their workforce to accommodate the rising costs or even cut healthcare benefits entirely.

Prescription drugs are an area that is greatly affected by fraud. Fraudsters are fans of selling counterfeit medication. Consumers ingesting this medication (many times laced with poison ­boric acid for example) can end up in the emergency room with complications costing thousands.

The recent passage of Healthcare Reform is also proving to be good news for fraudsters. Many consumers have little to no knowledge of the bill and scammers have found multiple ways to cheat the innocent out of their money.

Fraudsters prey on the fear and confusion brought about by the bill. Going door-to-door selling fake insurance, scammers advertise an “ObamaCare” plan and insisting consumers better act fast due to a “limited enrollment” period. These scams bilk consumers out of thousands of dollars and leave them without any real insurance, so if a medical emergency where to occur, they would be left footing the bill.

So, what can the consumer do to help combat healthcare fraud? First, understand exactly what you’re being charged for and always ask for clarification on any charges for services that you do not recognize. Second, know where your medical identification is and alert proper authorities when your insurance card has been stolen ­ medical identity theft crimes can leave you sorting out medical bills for the rest of your life. Finally, be a conscientious healthcare consumer. Be aware of current fraud schemes and check out the Food & Drug Administration website to ensure your medication is not on the counterfeit list.

A recent ABC News article, “Health Care Fraud: Two Ways Scammers Are Trying to Take Your Money” describes two “ingenious” ways fraudsters are stealing your money. The article explains that because of all the healthcare hoopla occurring, people do not understand and are unaware of current policies – leaving what they call “anxious Americans.” This is how the scammers get you.

The first scam that was highlighted was “Door-to-door salesman selling bogus policies.” What does that entail? Scammers are going door-to-door selling fake insurance policies by stating that current legislation is accounting for the low “limited enrollment” period fees. They are confusing people by essentially telling them that if they don’t buy the insurance now, the price will increase excrementally and they will not be able to afford it in time.

The next scam “1-800 advertisements promoting scams” is very similar to the door-to-door scam; however, this time the fraudster are taking it to the airwaves and asking people to call and 1-800 number for “limited enrollment specials made possible by new legislation.”

As always, don’t forget about Medical Identity Theft – this practice is increasing by 375%. The key to any insurance deal is if it is too good to be true than it probably is.

1. Rent-a-Patient Scheme
In this scheme organizations pay for—or “rent”—individuals to go to clinics for unnecessary diagnostic tests and cursory examinations. The scary thing is that licensed physicians sometimes participate in the rent-a-patient scheme. Case and point: Robert Bourseau, 75, was sentenced to 37 months in prison and ordered to pay $4.1 million in restitution for his role in a scheme to defraud Medicare and Medi-Cal. He pleaded guilty in June to paying a recruiter to deliver homeless patients to his hospital for unnecessary medical services.

2. Pill Mill Scheme
In this scheme, separate health care individuals and entities (usually including a pharmacy) collude to generate a flood of fraudulent claims that Medicaid pays. After a prescription is filled, the beneficiary sells the medication to pill buyers on the street who then sell the drugs back to the pharmacy. Example: Rick Kloxin, pharmacist in charge of Hogan’s Pharmacy in Lyons, Kans., was found guilty in an internet pill mill scheme. Kloxin pled no contest and was found guilty of 14 misdemeanor counts of violating Kansas Pharmacy laws.

3. Drop Box Scheme
This scheme uses a private mailbox facility as the fraudulent health care entity’s address, with the entity’s “suite” number actually being its mailbox number. The fraudulent health care entity then uses the address to submit fraudulent Medicare, Medicaid, and other insurance claims and to receive insurance checks.

4. Third-Party Billing Scheme
The third-party billing scheme revolves around a third-party biller—who may or may not be part of the scheme—who prepares and remits claims to Medicare or Medicaid (electronically or by paper) for health care providers. It is possible, however, for a third-party biller to defraud Medicare, Medicaid, and others by adding claims without the providers’ knowledge and keeping the remittances or by allowing fraudulent claims to be billed to Medicare or Medicaid through its service. Example: Recently, in Miami, Ihosvany Marquez and several alleged conspirators were indicted on charges of having filed $55 million in phony Medicare claims for HIV, AIDS, cancer, pain and varicose vein treatments.

The bipartisan bill would end the common practice of mailing reimbursement checks to post office boxes. However, we first should all be asking a very important question. Who thought it was responsible to send reimbursement checks to post office boxes in the first place? What reputable healthcare provider doesn’t have a permanent address where to send checks?

The Act will mandate that all government sponsored health programs pay healthcare providers and suppliers by using direct deposit. This certainly seems to be a step in the right direction and into the 21st century. Direct deposits will eliminate an easy way for criminals to get their hands on reimbursement checks, save the government money on stamps, envelopes, paper check etc., and don’t forget about the environment.

Congress, please say, “Yes,” to healthcare reform.

WellPoint – an independent licensee of Blue Cross and Blue Shield – also announced that they recovered $75 million due to waste, fraud and abuse in their system. According to their estimates, for every $1 spent on investigating fraud the company saves or recovers $11.

Read full article.

If insurance companies can find ways to combat waste, fraud and abuse in their systems, Medicare and Medicaid need to find more productive methods. An estimated $68 billion every year – or 3% – of all healthcare expenditures is stolen. The government could insurance millions with that “extra” money.