By MARK S. SMITH and RICARDO ALONSO-ZALDIVAR, Associated Press
WASHINGTON (AP) -- The Obama administration is upping the ante in the fight against health care fraud, joining forces with private insurers and state investigators on a scale not previously seen in an attempt to stanch tens of billions of dollars in losses.
Announcing the new public-private partnership Thursday, Health and Human Services Secretary Kathleen Sebelius said it "puts criminals on notice that we will find them and stop them."
Fraud is an endemic problem plaguing entitlement programs like Medicare and Medicaid as well as private insurance companies. Sebelius said the new program will collate claims data from all those programs and mine it for signs of bogus billing.
"Lots of the fraudsters have used our fragmented health care system to their advantage," Sebelius told reporters during a White House meeting with insurance executives. "By sharing information across payers, we can bring this potentially fraudulent activity to light so it can be stopped."
The agreement is also unusual because it brings the Obama administration and longtime foes in the insurance industry together to tackle a common problem. While carrying out the requirements of President Barack Obama's health care overhaul law, insurers are also lobbying to roll back some of its provisions, such as new taxes on the industry and cuts to private plans offered through Medicare. Obama continues to rail against industry "abuses."
But industry leaders stressed that combating fraud is in everyone's interests.
"It's just gotten a great deal harder to prey upon the public," said Karen Ignani, CEO of America's Health Insurance Plans, one of a number of industry groups backing the partnership.
Attorney General Eric Holder, who took part in the announcement, said industry and government will "come together as never before to share information while protecting patient confidentiality."
Details of the collaboration remain to be worked out, but the possibilities include sharing information on new fraud schemes as they pop up, using claims data to catch scams such as payments billed to different insurers on the same day for care purportedly delivered to the same patient in different cities, and using computer analysis to spot emerging patterns of fraud.
An industry official familiar with the discussions said the partnership aims to produce tangible results within six months to a year, but that some issues -- including extensive sharing of claims data -- will take longer to work out. Initially, the collaboration will involve sharing of such information as billing codes associated with fraud for different insurers.
"This is about getting stuff done, not about holding meetings," said the official, who declined to be identified because the official was not authorized to discuss the subject in public and spoke on condition he not be named.
Fraud is estimated to cost Medicare about $60 billion a year, and the Obama administration has beefed up the government's efforts to stop it, bringing in record settlements with drug companies for marketing violations as well as using new powers in the health care law to pursue low-level fraudsters with greater zeal.
Yet, although Medicare is becoming a harder target, it's too early to say if the tide has turned.
Some antifraud efforts launched with great fanfare have yet to deliver convincing results. For example, a $77-million computer system unveiled last summer to stop Medicare fraud before it happens had prevented just one suspicious payment by Christmas.
Likewise, the new public-private collaboration could face problems. Privacy advocates may object to extensive scrutiny of claims data, and doctors have traditionally pushed back against routine computerized monitoring of their practice patterns.
Supporting the partnership are America's Health Insurance Plans, the leading industry lobbying group, the Blue Cross and Blue Shield Association, and major companies including UnitedHealth Group and WellPoint, Inc. Formal working meetings are scheduled for September.
"The cost of fraud can far exceed what is paid for in falsified claims," said Karen Ignagni, the industry's top lobbyist. "It can cause real harm to patients who are intentionally exposed to radiation, invasive surgeries and medication they do not need, or suffer the consequences of receiving a fraudulent diagnosis."
The analysis of data from Medicare, Medicaid and private health plans will look for suspicious patterns and other evidence that might indicate fraud, White House officials said. A "trusted third party" would comb through the data and turn questionable billing over to insurers or federal investigators.
Officials said those who submit fraudulent claims often do so for both government programs and private insurance plans. Separately, such claims might not raise suspicions, but taken together they could raise a red flag, such as when a doctor bills for more than 24 hours in a day.
Law enforcement organizations taking part in the collaboration include the FBI, the Health and Human Services Inspector General's Office, the Justice Department, and state and private insurance fraud control units.