Health Plan Fraud

Employers See Greater Health Care Savings Through Dependent Eligibility Audits
Excerpt:"'Employers are realizing just how much money the audit process can save, especially now,'. . . .'They're beginning to see that removing excess costs associated with ineligible dependents will help them offset any increases in plan costs they expect under health care reform.'"(News-Medical.Net)

[Guidance Overview] What Does HIPAA Say About Patients Who Want to Hide Information from Their Health Plan?
Excerpt:"If you are a health care provider, . . . the HITECH amendments to HIPAA include a new right: When a patient receives treatment and pays for that treatment entirely out of his or her own pocket, the patient may request that you not share information about the treatment with the patient's health plan -- and you must honor that request."(Warner Norcross&Judd LLP)

Removing Ineligible Dependents Could Save Companies Between 4% to 6% of Their Annual Health Care Costs.
Excerpt:"To offset [expected] higher expenses, companies will raise premiums on plans and systematically weed out ineligible individuals . . . ."(CNNMoney.com)

Fringe Benefits a'Key Area'of Upcoming IRS Audits
Excerpt:"The IRS is on a mission to learn what issues are hiding in employers'records; thus, the [employment tax national research program] audits will prove to be more invasive than they would be if auditors had a specific target."(Thompson Publishing Group Inc.)

GAO Proactive Testing of ARRA Tax Credits for COBRA Premium Payments
9 pages. Excerpt:"Employers claiming COBRA credits use quarterly or annual payroll tax returns to report the number of former employees on COBRA and the amount of premiums paid. These returns do not require employers to provide any supporting information about individuals enrolled in COBRA or premiums paid on their behalf, potentially allowing unscrupulous employers to lower their payroll taxes by fraudulently claiming COBRA credits."(U.S. Government Accountability Office)

Companies Crack Down on Defining Dependents in Employee Benefit Plans
Excerpt:"A dependent audit comes from your employer, who wants proof that the people you're carrying on the company health plan really are your dependents."(The New York Times; free registration required)

[Guidance Overview] The Fraud and Abuse Provisions of the Health Care Reform Act
Excerpt:"The recently enacted Affordable Care Act includes . . . fraud-and-abuse provisions affecting health care providers, including amendments to the False Claims Act (FCA), changes to the Anti-Kickback Statute (AKS), and new requirements related to the return of overpaymemts, as well as additional funding and new enforcement powers to fight fraud and abuse. Many of these changes are effective immediately. The developments that are most significant for health care providers are [covered in the target page]."(Proskauer Rose LLP)

Rescissions After The PPACA ? A Preview
Excerpt:"Under the PPACA, rescission is prohibited except in cases of fraud or misrepresentation. . . . The health insurance industry agreed to comply with this requirement ahead of the September effective date."(Roy Harmon via Health Plan Law)

[Guidance Overview] What's Next for Health Care Fraud Investigations under Health Care Reform?
Excerpt:"[Partner Daniel R. Margolis and health care senior associate Douglas Grimm] discuss modifications to the Anti-Kickback Statute under the Patient Protection and Affordable Care Act, the new trends in prosecution of such cases and the implications of the 2009 Physician Payments Sunshine Act."(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] Health Care Reform Legislation Makes Significant Changes to Fraud and Abuse Laws
Excerpt:"In keeping with the federal government's increased focus on health care fraud and abuse, the Act makes substantial changes to the Stark law. These changes have the potential to significantly affect providers'business and compliance strategies. Close attention should be paid to the issuance of HHS's regulations, as they will provide further guidance on implementation of the statutory provisions . . . ."(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] Health Care Reform's Fraud-Fighting Provisions Increase the Potential for Liability for All in the Health Care Industry
Excerpt:"Because many of the provisions that target fraud, waste, and abuse became effective upon enactment, the health care industry should begin to understand these provisions immediately. This article highlights key provisions, with a particular focus on the impact the legislation will have on enforcement of the Anti-kickback Statute, the False Claims Act, the Stark law, the Civil Monetary Penalties Law, and new provisions mandating reporting and refunding of overpayments."(Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)

Health Care Reform Law: Health Care Fraud and Abuse and Program Integrity Provisions
Excerpt:"The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (the Healthcare Reform Law), contains more than 32 sections related to healthcare fraud and abuse and program integrity and makes significant amendments to existing criminal, civil, and administrative anti-fraud statutes."(Morgan, Lewis&Bockius LLP)

Considering a Health Plan Dependent Eligibility Audit? (PDF)
Pages 7-8 of 8 pages. (Milliman)

Making Your Healthcare Plan More Cost-Effective Through a Dependent Audit (PDF)
Excerpt:"While a private-sector employer may see an audit as a way to help the bottom line, a public-sector employer could better serve the public interest through the audit -- since it is funded through tax dollars, it could save money on behalf of the public by verifying that claimed dependents are valid. Public-sector employers at the federal and state level have an additional reason to consider holding their own dependent audits -- the possibility of a watchdog government agency conducting an investigation."(Thompson Publishing Group)

Health Care Fraud Costs U.S. More Than $60 Billion Annually, According to Justice Department
Excerpt:"Health care fraud remains a significant problem, estimated to cost the public and private sectors more than $60 billion each year . . . ."(Wolters Kluwer)

Using Dependent Eligibility Audits to Keep Health Plans Healthy: A Case Study
Excerpt:"Because health plans are established for the benefit of eligible participants, any resources diverted to ineligible persons puts a strain on the plan's health, to the detriment of eligible participants. A recent project with a long-time client provides a good case study of the process and possible benefits of conducting a dependent eligibility audit."(Milliman)

[Guidance Overview] 2010 Medicare Premiums, Deductibles and Coinsurance
Excerpt:"Plan sponsors that pay the Medicare Part B premium or deductible should carefully review their plan documents and communications to assure that they are accurately stating the amount that the plan intends to pay. For example, plans that simply promise to pay the'Part B deductible'may want to set that payment at a firm amount or maximum."(Segal Company)

Pfizer Settles Largest Health Care Fraud Case in History
Excerpt:"Pfizer Inc. was already under a corporate integrity agreement (CIA) stemming from an earlier Department of Justice (DOJ) settlement when it allegedly broke civil and criminal laws, triggering the largest health fraud settlement in American history. Now the pharmaceutical manufacturer will break another record, implementing what is believed to be the most extensive CIA ever imposed by the HHS Office of Inspector General (OIG)."(AISHealth.com)

$5-a-Day Cinergy Health Insurance Piles Up Complaints
Excerpt:"TV ads touted Cinergy Health's low-cost medical insurance for as little as $5 a day -- the cost of a pack of cigarettes or a hamburger. But the policies promoted by the Aventura company delivered far less coverage than the ads promised, say New York state insurance regulators, who ordered Cinergy to take the ads off the air in mid-August. Florida may soon take action, as well. After an investigation, state insurance regulators also determined that the company that actually writes the policies, American Medical and Life Insurance, defrauded consumers with ads indicating that its limited-benefit health insurance plan offers comprehensive medical coverage. American Medical's license to sell insurance in Florida could be revoked."(The Miami Herald)

[Guidance Overview] Employee Who Signed Up Ineligible Individual for Health Plan Must Repay Benefits
Excerpt:"EBIA Comment: Numerous reported decisions have permitted ERISA plans and administrators to recover benefit overpayments made to plan participants and beneficiaries. And although the Knudson case took a narrow view of the remedies available under ERISA . . ., the Ninth Circuit made quick work of this case, citing ample support for restitution where fraud or wrongdoing is involved."(Employee Benefits Institute of America)

Dependent Audits Surge As Employers Look for Cost-Cutting Alternatives
Excerpt:"These days, employers will stop at nothing to eliminate excessive health plan costs. Increasingly, more benefit managers are finding they can wipe out millions of dollars worth in one fell swoop by conducting dependent eligibility audits. Employers conducting such audits generally realize 3% to 12% of covered dependents are not eligible for their plan, according to research by BMI audit services - thus, the increased interest."(Employee Benefit News; free registration required)

[Guidance Overview] 9th Circuit Affirms Reimbursement of Benefits for Fraudulent Beneficiary
Excerpt:"The 9th U.S. Circuit Court of Appeals has affirmed a lower court's decision that that a health plan administrator should be reimbursed for benefits it paid for a woman who was falsely represented as a participant's legal spouse. EBIA reports that the appellate court agreed with the U.S. District Court for the Western District of Washington that the $70,000 reimbursement is considered equitable relief under the Employee Retirement Income Security Act (ERISA). The courts rejected Ralph W. Cutter's argument that because the benefits were not paid directly to him and were not in his possession, the plan could not seek reimbursement from him."(PLANSPONSOR.com; free registration required)

Health Plans Ramp Up Efforts, Employ New Technologies, to Detect and Thwart Fraud
Excerpt:"Blues carriers are showing significant improvement in the use of technology to analyze claims. For example, . . . companies are better at putting prepay edits in place to watch out for claims that are impossible (e.g., pregnancy tests for a male) or improbable (e.g., services rendered on a national holiday). Moreover, . . . Blues plans have become savvier at finding aberrant bills through the use of post-pay analyses of claims."(AISHealth.com)

Blue Cross Accused of Deceptive Practices
Excerpt:"A federal [suit] accuses Blue Cross of a wide-ranging scheme to underpay claims from out-of-network hospitals. Methodist Hospital of Southern California claims Blue Cross refuses to let it transfer patients from emergency rooms, then underpays the hospital and sticks patients with hefty bills, falsely claiming the patients'requested'to stay put. Methodist Hospital of Southern California accuses Blue Cross and Anthem affiliates in 10 states of RICO and ERISA violations. The insurance company faces similar actions in courts across the country. The scheme follows a well established pattern, according to the hospital, which quit the Blue Cross network in 2008, citing low payback rates that were'onerous and one-sided in favor of Blue Cross.'"(Courthouse News Service)

California Regulators Shut Down Alleged Health Insurance Scheme
Excerpt:"California regulators said they had shut down a labor union health insurance scheme that put hundreds of consumers at risk of losing coverage. The Department of Managed Health Care said Tuesday that it had obtained an order from an administrative judge barring Raymond and Jean Palombo of Riverside from selling health maintenance organization and preferred provider organization policies in California."(Los Angeles Times)

Health Insurers Refuse to Limit Rescission of Coverage
Excerpt:"Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive. The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system."(Los Angeles Times)

Health Insurers Refuse to Limit Rescission of Coverage
Excerpt:"Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive. The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system."(Los Angeles Times)

UAW OKs Healthcare Benefits Reduction for GM Retirees; DB Plan to Continue
Excerpt:"[I]nstead of GM contributing about $20 billion in cash and other contributions, the new VEBA will receive a note, payable in cash, with a principal amount of $2.5 billion. The note will make cash payments of $1.38 billion, including accrued interest, in 2013, 2015 and 2017. The VEBA also will receive preferred stock in the restructured company with a face value of $6.5 billion. The stock will pay an annual cash dividend of $585 million for as long as the VEBA holds the stock. Finally, the VEBA will receive 17.5% of the common stock issued by the restructured GM . . . ."(Business Insurance)

Employers See Substantial Savings from Dependent Eligibility Audits
Excerpt:"Mercer is seeing a dramatic rise in the number of inquiries and new business involving health plan dependent eligibility audits, with the number of Mercer-conducted audits more than doubling every year since 2006. According to a Mercer news release, the immediate and long-term savings gained from these audits can be substantial. Mercer conservatively estimates that 3% to 8% percent of covered family members (spouses and dependents) cannot produce valid verification of eligibility during an audit, and $1,900 is the average annual cost of providing health coverage for one dependent, based on data from Mercer's National Survey of Employer-Sponsored Health Plans."(PLANSPONSOR.com; free registration required)

Health Care Regulatory Update: 2008 Year in Review
The extension listings also include fraud and abuse settlements and court decisions. (Faegre&Benson)

Employers Use Eligibility Audits to Control Health Care Costs
Excerpt:"With cost-savings in mind, some employers are conducting dependent eligibility audits to accurately determine who is covered under their plan. A recent survey conducted by the International Foundation of Employee Benefit Plans (IFEBP) found that 26% of U.S. employers conduct eligibility audits for their health care plans.'Employers conduct an eligibility audit to ensure that every person covered by their health plan is an approved dependent,'said Julie Stich, Senior Information/Research Specialist with the IFEBP, in a press release.'When the audit is conducted, employers often discover many people -- former spouses, adult children, non-immediate family members -- who are covered under the health plan even though they do not qualify as a dependent.'"(PLANSPONSOR.com; free registration required)

New Jersey Audit of Health Benefits Botched, Unions Charge
Excerpt:"Some three weeks after the state launched an audit of roughly 225,000 public employees throughout New Jersey to root out ineligible dependents receiving health benefits, the workers and their unions are seething over how the effort is being conducted.'People were quite upset because this was handled so badly,'said Hetty Rosenstein, area director for the Communications Workers of America. Union leaders say there was little or no advance notice of the audit and the information it would seek.'People get a letter and they're being asked for extremely invasive, very personal information,'Rosenstein said."(The Star-Ledger (Newark, New Jersey))

Some U.S. Employers Searching for Workers Who Are Collecting Health Benefits for Which They Aren't Eligible
Excerpt:"In recent years, such'dependent eligibility audits'-- where employees are required to provide documented proof, rather than just give their word, that spouses and children are eligible for corporate medical coverage -- have become increasingly popular among large employers seeking to rein in rising medical expenses."(The Wall Street Journal)

Fact Sheet: EBSA Achieves Nearly $12 Billion in Total Monetary Results in Last Eight Years
Excerpt:"In FY 2008, [the Employee Benefits Security Administration] closed 3,570 civil investigations, with 2,696 (75.52%) resulting in monetary results for plans or other corrective action. Since 2001, EBSA has closed 32,338 civil cases, with more than two-thirds (68.31%) resulting in monetary results or corrective action."(U.S. Employee Benefits Security Administration)

Managing Workforce and Benefit Program Risks during an Economic Downturn (PDF)
Excerpt:"The eligibility status of any dependent population is in a constant state of change. [Dependent Eligibility Audits] identify ineligible dependents and remove them from benefit plans, and also educate employees regarding the plan's eligibility guidelines. Identifying and removing an ineligible child or former spouse can produce several years of savings. . . . [With regard to retirement plans, in-plan annuities] haven't yet become widely popular but the ability to guarantee an income stream in retirement might be increasingly appealing to participants worried about their savings eroding."(Buck Consultants)

State High Risk Pools for Health Coverage Information Page, September 2008
Excerpt:"The NCSL Health Committee took an in-depth look at this topic in April 2008, inviting two national experts to describe latest activities and future proposals. The description and speakers'resources are linked [on the target page]. (National Conference of State Legislatures)

Dependent Health Care Audits Become'Hot Topic'
Excerpt:"A growing number of employers have launched dependent health care audits as a relatively painless effort to reduce health care costs."(Workforce Management; free registration required)

More Than 500 Backlogged Whistle-Blower Cases Allege Health Care, Drug Company Fraud
Excerpt:"Whistle-blower lawsuits alleging that pharmaceutical companies and government contractors defrauded the federal government have created a backlog of more than 900 cases at the Department of Justice, the Washington Post reports. According to the Post, more than 500 of the cases involve the health care and pharmaceutical industries, as well as Medicare and Medicaid."(Kaiser Family Foundation)

Three Groups Announce Formation of Consortium To Fight Health Insurance Fraud
Excerpt:"The National Health Care Anti-Fraud Association, the National Insurance Crime Bureau and the Coalition Against Insurance Fraud on Tuesday announced the formation of the Consortium to Combat Medical Fraud, which will seek to fight health insurance fraud nationwide, CQ HealthBeat reports. The consortium, which will work with the FBI and the Department of Justice, will share information on fraud claims and investigations among health insurers, hold educational programs and conduct industrywide research."(Kaiser Family Foundation)

Medical Scans Face Scrutiny by Insurers, Doctors Over Safety, Expense, Even Fraud
Excerpt:"Insurance companies are taking a harder look at advanced medical scans like CT scans, citing spiraling costs and safety concerns. And some doctors agree there's emerging evidence that these scans are being over-prescribed."(AP via San Francisco Chronicle)

[Opinion] Criminalizing Health Insurance Disputes
Excerpt:"A small book could be compiled of cases in which the federal judiciary has construed ERISA as condoning'wrongs without remedy'. Without taking a position on the proper allocation of duties and obligations, suffice it to say that society expects that wrongs will have remedies. Unfortunately, the politically inspired prosecutor may tap into that vein of public discontent to deliver a remedy that fails in proportionality. Perhaps it is too much to say the outcomes can be'remedies without wrongs', but the danger lies in that direction."(Health Plan Law blog by Attorney Roy F. Harmon III)

LA City Attorney Alleges Health Net Defrauded Policyholders by Dropping Patients Who Needed Costly Care
Excerpt:"One of the state's largest insurers, Health Net Inc. of Woodland Hills, sold individual policies with the promise of medical coverage while engaging in a secret and illegal scheme to drop patients if they needed expensive treatment, the Los Angeles city attorney contended in a lawsuit filed [this week]."(Los Angeles Times)

'Health Plan'Promoter Sentenced to Four Years for Embezzling Premiums Paid by Small Businesses
Excerpt:"According to the U.S. Department of Justice, his business offered health-care coverage through its TRG Health Plan. Enrollees in the plan paid premiums to TRG Marketing. [William P. Crouse] embezzled funds from the premiums, and used $546,732 of it to buy a private residence. He no longer owns the home."(Indy Star)

Health Insurance Scams Targeting Small Businesses, Individuals Increasing
Excerpt:"The Wall Street Journal on Sunday examined the increasing number of small employers and individuals'searching for affordable health insurance'who fall'victim to scams and misleading offers.'"(Kaiser Family Foundation)

Auditing for the Health Insurance Ineligibles
Excerpt:"Companies save millions by weeding out grown children, ex-spouses and other employee dependents who are no longer eligible for benefits."(Workforce Management; free registration required)

Health Insurance Audits Becoming All the Rage
Excerpt:"A growing number of employers are embarking on dependent audits to cull ineligible dependents from their health-care rolls in an effort to cut health-care costs, observers say. Experts say these audits can result in the removal of 5% to 10% of dependents from their rolls, on average, and depending on the particular plan, can save companies hundreds of thousands, if not millions, of dollars. They also remove potential liability under the Employee Retirement Income Security Act and Sarbanes-Oxley, observers say."(Financial Week; free registration required)

Proposed California Rescission Regulation Could Mean New Expenses for MCOs
Excerpt:"The California Department of Managed Health Care (DMHC) and the California Department of Insurance (DOI), which jointly proposed parallel sets of regulations, say the rules, if enacted, will be the nation's'strongest protection for consumers against the illegal rescission of health insurance.'"(AISHealth.com)

Calif. Agencies Release Proposed Regs to Prevent Improper Cancellations of Health Insurance Policies
Excerpt:"The California Department of Managed Health Care and Department of Insurance on Tuesday proposed new regulations intended to prevent insurers from improperly canceling individual health insurance policies, the Sacramento Bee reports . . . . The agencies said the new rules reinforce existing laws prohibiting insurers from rescinding coverage unless they can prove policyholders intentionally omitted information or lied on a medical questionnaire . . . ."(Kaiser Family Foundation)

Overview: IRS Goes After Abusive IRC Sec. 419(e) Schemes
Excerpt:"From Spencer's Benefits Reports: In two notices and a revenue ruling issued on October 18, the Internal Revenue Service has provided a series of warnings and cautions in an attempt to curtail the growing use of certain trust arrangements under IRC Sec. 419(e), which are being sold to professional corporations and other small businesses as welfare benefit funds."(Wolters Kluwer Financial Services)

Benefits Audits Turn Up Signs of Anger in Workers
Excerpt:"It's the hot topic in benefits, and no one is hotter about it than workers: employers demanding proof that family members qualify for insurance coverage. Workers often are offended that their company seems to be questioning their honesty. Others are just irritated at having to dig out old tax returns, birth and marriage certificates, or college transcripts. Some don't respond to requests for documents."(Chicago Tribune)

Opinion: EHRs'Place in Fraud Management Focus of Report
Excerpt:"[The target page is a letter written in] response to Joseph Conn's'RTI report includes controversial EHR requirement': The article cites the report recently released by the Office of the National Coordinator for Health Information Technology in which a panel of experts selected by RTI International under a contract from ONCHIT crafted recommendations for requirements of electronic health records that could assist in fraud management and improve data quality."(Modern Healthcare; free registration required)

Identifying and Eliminating Internal Theft and Abuse in Health Care
Excerpt:"This article presents significant points to consider when examining an organization's internal accounting systems and offers real-world examples of fraud that have taken place in the health care industry."(International Foundation of Employee Benefit Plans)

The Real Obstacles to Health Care Reform: A Checklist
Excerpt:"[The author of this blog offers two points to consider:] Lack of Accountability For Public Funds [and] Outpatient Treatment Centers and Physician Self-Referrals."(Health Plan Law blog by Attorney Roy F. Harmon III)

Guarding Against Employee Fraud and Theft in Health Care Organizations
Excerpt:"Although in previous EBN issues I have offered advice to employers on SAS 70 audits, I recently have been fielding calls regarding health care fraud. What follows is a sampling of the questions I've received, and my advice to employers to protect themselves."(Charles Denyer via Employee Benefit News)

BenefitsLink Named'Best of the Web'by Human Resource Executive Online
We're the only site in the'Benefits'category! Thanks for letting us share this news with you. Excerpt:"With that in mind, we considered it fitting to present in this anniversary issue 10 of the best HR Web sites and 10 of the best HR blogs for your browser's Favorites/Bookmarks list. . . . [I]f it's about benefits, you'll find something about it on BenefitsLink. Just a cruise down its left side navigation/links bar, and you quickly get the idea how they chose the site's name back in 1995."(Human Resource Executive Online; free registration required)

Benefits Fraud&Abuse: Ten Danger Signs
Excerpt:"[The target page provides] some simple lists that identify important warning signs."(Health Plan Law blog by Attorney Roy F. Harmon III)

Blame-the-Lawyer Stratagem Fails in ERISA Suit Against Fund Trustees
Excerpt:"A New Jersey federal judge's dismissal of legal malpractice and breach-of-fiduciary-duty claims against counsel in an ERISA case shows that trustees sued for misfeasance can't easily pass the buck to their lawyers."(New Jersey Law Journal via Law.com)