Government signs on insurers to fight healthcare fraud

WASHINGTON Thu Jul 26, 2012 9:11pm EDT

U.S. President Barack Obama speaks at a Cabinet Meeting in the Cabinet Room at the White House in Washington, July 26, 2012. REUTERS/Larry Downing

U.S. President Barack Obama speaks at a Cabinet Meeting in the Cabinet Room at the White House in Washington, July 26, 2012.

Credit: Reuters/Larry Downing

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WASHINGTON (Reuters) - President Barack Obama's administration launched a new partnership with private insurance companies, state officials and other stakeholders to scale up efforts to tackle widespread and increasingly sophisticated healthcare fraud.

Speaking from the White House at a table surrounded by leaders from many of the country's biggest health insurers, Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder launched the new initiative, which builds on past efforts to root out crimes that cost U.S. taxpayers billions of dollars every year.

"Bringing additional healthcare industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our healthcare system," Holder said.

The project increases a focus on data sharing between public and private health insurers, using new technology that helps track medical claims in real time. Many large insurers have already signed onto the program, including Humana Inc, UnitedHealth Group and WellPoint Inc.

"In the past, we followed a ‘pay-and-chase' model, paying claims first - then only later tracking down the ones we discovered to be fraudulent. Now, we're taking away the crooks' head start," Sebelius said.

Over the past two years, Holder and Sebelius have sought to identify major centers of healthcare fraud, meeting with local organizations, investigators, prosecutors and state officials to better understand the nature of common fraud schemes and to bring new stakeholders into the conversation.

Fraudulent claims to the government's Medicare health plans for the elderly are estimated to cost $60 billion a year, making it a focus of large-scale busts by the U.S. Department of Justice. In May, U.S. authorities conducted the biggest Medicare fraud sweep to date, arresting more than 100 people across the country - including doctors, nurses, office managers and other providers - for trying to defraud the system of nearly half a billion dollars.

Officials did not give specific details of how the new partnership would be rolled out. But department officials said that a third party would be brought in to conduct computer analysis to spot patterns of fraud and comb through millions of claims and other associated billing data.

The partnership announced Thursday builds on previous collaborations, including HEAT, the Health Care Fraud Prevention and Enforcement Action Team, designed to strengthen data sharing and partnerships at all levels of government.

Obama's healthcare law, known as the Affordable Care Act, earmarks hundreds of millions of dollars for anti-fraud measures and gives greater authority to insurers and law enforcement officials, including enhanced screening of Medicaid and Medicare providers and tougher laws and sentences for people who commit these crimes. Holder said that in 2011, anti-fraud initiatives recovered $4.1 billion in cases involving federal healthcare programs.

"That was a new record," said Holder. "Over the last three years, for every dollar we've spent fighting against healthcare fraud, we've returned an average of $7 to the U.S. Treasury, the Medicare Trust Fund and others.

"It's clear that our approach is working - and that our investments in anti-fraud efforts are yielding extraordinary returns. But - as today's announcement proves - this is only the beginning," he added.

(Additional reporting by Lewis Krauskopf in New York; Editing by Tim Dobbyn, Michele Gershberg and Lisa Shumaker)

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