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Reducing Health Care Fraud, Waste & Abuse: How Much Is Enough?

Every day I see headline-worthy stories of convictions and legal settlements for fraud and abuse in health care around the world. Many health care payers’ SIUs or forensics teams spend their days “grinding it out” in the fight against health care fraud, waste and abuse — they may only aspire to these kinds of headline results.

So how does a health care payer measure success in payment integrity? How much is enough? Each payer tends to have their own point of view.

Here are four examples of “How much is enough?”

  • Some years ago, a payer came to us with a simple goal. With just one employee in their SIU shop and very simple tools, they had suffered a significant fraud loss while their one SIU employee was away during the Christmas – New Year’s holiday. In response to this loss, their Board of Directors defined “How much is enough?” as “Let’s not have that happen again.”
  • Historically, RFPs for administration of government-funded health care insurance programs in the United States have included a requirement that the administrator fight fraud. Since this kind of administration contract is often awarded to the bidder with the lowest price, it’s possible that a small, low cost SIU shop which produces any kind of result will be “enough.”
  • We did a one-off project for a payer that unexpectedly identified significant fraud and abuse committed by an extremely powerful provider. For this payer, “enough” did not include addressing the behavior of this powerful provider.
  • We have a client in a country that is publicly agonizing over a culture of corruption which permeates every industry, including health care. For this payer, “enough” will probably be the day that they are recognized as having achieved a level of payment integrity which defies that norm. They are on their way!
So how do you set your goals in the fight against losses to fraud, waste and abuse? How much is enough?

Whether your goal is to achieve structural change, or your goal is incremental improvement, we recommend that you do the following things.

  • Recognize that payment integrity includes attention to a range of types of losses, not just fraud, but also to waste (unintentional or unnecessary payment) and abuse (manipulation).
  • Fraud is traditionally addressed by the SIU or forensics. Engage your stakeholders to mitigate losses to waste and abuse.
  • Quantify your losses with a project that validates the integrity of your historical paid claims so that you can establish a baseline of losses which is relevant to your business.
  • Establish achievable goals for measurable results that impact your organization’s bottom line.
  • Be prepared to balance your goals and the needs of your stakeholders. Challenge your stakeholders to make the case for their interests in measurable terms.
  • Be prepared for change, because the people who inappropriately take your money are entrepreneurial.
  • Benchmark your losses and your results against industry best practices, for celebration of success and to support your case for the resources that you need to achieve your goals.
In my next blog on health care fraud, waste and abuse, I'll ask: “Who Do You Task with Responsibility for Payment Integrity?” I welcome your comments.

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