Ileana Hernandez of Manatt, Phelps & Phillips spoke recently about her perspective on how fraud affects insurance premiums.
Ms. Hernandez said that “fraud is a significant cost in our economy and healthcare, there are different kinds of fraud…healthcare has become an attractive target…one of the biggest areas is unnecessary tests.”
According to the National Health Care Anti-Fraud Association, more than ten percent of healthcare dollars are stolen by fraud each year. Sometimes this comes in the form of patients being overcharged for services they never received. Other times it can be physicians or healthcare entities who have billed for services they never actually provided.
Ms. Hernandez said that “the Affordable Care Act and the new healthcare exchanges, with the increased amount of information and transparency and sharing between doctors and hospitals, is going to help…increase public awareness about this problem…and give us a better chance to catch it more quickly.”
In addition to the “financial cost,” said Ms. Hernandez, there are also actual costs to patients who are being subjected to unnecessary tests or treatments, which may lead them to “undergoing a surgery that they don’t need…it can have a devastating effect on their health and in some cases their lives.”
In addition to those who perpetrate the fraud, Ms. Hernandez believes that those dealing with insurance companies should also be aware of how their claims are being processed and reimbursed. In many cases, people see a medical bill from a doctor or hospital and just pay it “because they think that’s what they owe…but if you look at it, there are a lot of errors that are taking place.”
Ms. Hernandez said that “if you want healthcare costs to go down, the only way is for us all to start paying attention…to how money is being spent.” She also encouraged people not to be afraid or feel intimidated when dealing with insurance companies and to “know your rights.”
An area where people often feel they don’t have any say or control is when it comes to medical coding, said Ms. Hernandez. As she explained, there are different kinds of coding—diagnostic codes and procedure codes—and if a patient isn’t happy with what has been coded, they can choose. For diagnostic codes, the physician or the patient can talk to an “effective coder” and have it re-coded. With procedure codes, she said, “that’s where I think people get intimidated…but you legally have 60 days from when you get billed from the provider to look at it and question it.”
In terms of procedure codes, Ms. Hernandez said that “the key is you have a right to look at your medical bill…and if there is a problem with a procedure code, you can always ask for an informal conference…and then going through the appeals process…to have it re-coded.”
Ms. Hernandez said that “there are a lot of ways that healthcare costs can be saved, but one of the biggest areas is unnecessary tests…and if people just take a look at their diagnostic code and compare what was done with what should have been done, they may reduce their healthcare premium considerably.”