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How physician education and engagement can stem waste and abuse

Wasteful and abusive behavior isn't always intentional, and payers who recognize this can help stem the losses.

7 min read


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Fraud, waste and abuse are a persistent target in efforts to stem rising health care costs, but headlines often focus on dramatic cases involving intentional acts of law-breaking. Waste and abuse are more insidious, and as General Dynamics Health Solutions experts Dr. John Maguire and Jala Attia note, wasteful and abusive practices in clinical care and billing may not be intentional. They spoke with SmartBrief about how this type of behavior develops, and how health care stakeholders can work with – not against – physicians to address it.

Fraud, waste and abuse (FWA) are often grouped together as if they were the same thing, but, of course, they are not. Can you explain why it’s important to draw distinctions among these terms and how that might enable solutions? 

Jala Attia

Jala Attia:  Payers have an obligation to report behavior that appears to be fraudulent to state and federal agencies as well as to take steps to recover and prevent inappropriate payments.

In our experience, when a health care provider is subject to a health care fraud investigation, the assumption is that the physician is purposefully gaming the system. When guided by this assumption, payers may encounter significant difficulty engaging a provider to discuss how his or her billing or documentation behavior doesn’t comply with standards and requirements.

The word “fraud” carries a harsher connotation than “waste and abuse.” Language around waste and abuse tends to invite more conversation and resolution between payers and providers. This is because, despite the scientific rigor of modern-day medicine, there is tremendous variability in care provided, according to specialty, region and other variables. Providers do not want to be stigmatized with being the subject of a fraud investigation when more often billing and documentation abnormalities are unintentional on the part of the clinician.

Put us in the shoes of a young doctor just getting the hang of billing. How might wasteful claims habits develop?

Dr. John Maguire

Dr. John Maguire: The most common way a young physician develops wasteful  or even abusive  claims habits is by working in a group practice where waste and abuse is routine. For example, in a group practice of hospitalists I have worked with, I found it quite routine for staff to copy and paste documentation from the emergency physician for the hospital admission note. A new physician who sees this action routinely might think it is a reasonable way of improving efficiency  particularly if one assumes both notes, if completed independently, would say the same thing. However, this is an abusive practice. 

Another common reason wasteful habits develop among young physicians is fear of malpractice lawsuits. Young physicians commonly overprescribe expensive testing and are quicker to admit patients to the hospital as a way of protecting themselves against litigation, when the patient simply needs the doctor to spend a little more time on history, physical evaluation and close follow-up care.

Could you outline some steps that would start to address this problem?

Attia & Maguire: It’s clear that education is a big part of this, which is not an original idea. Standards exist that explain what is considered FWA. The problem is there are a number of unique situations that could lend themselves to waste and abuse. It is impossible to have explicit recommendations for every scenario a clinician faces. For that reason, providing more education can help provide a knowledge base for clinicians to make the correct decisions in different scenarios.

Additionally, states have incentives to mitigate FWA on behalf of their Medicaid programs. It would be relatively simple to drive specific education as a prerequisite for maintaining licensure. Another logical approach could include required education driven by specialty societies or as part of certification maintenance by board-certifying entities.

One thing we’ve seen is physicians who put all their faith in the billing services they hire to handle coding and submission of claims. We would recommend that physicians question the credentials of their coding teams and ensure that there is no incentive for the billing entity to “maximize reimbursement” to the provider.

Lastly, payers have an inherent interest in driving education, as it ultimately should lead to lower premiums for members.

What recommendations can you offer for payers that want to engage physicians on this topic?  

Attia: One best practice that payers should consider is the use of analytic tools to help engage and educate physicians about how they stack up against their peers. We have seen payers provide “scorecards” that compare the individual physician or practices to their peers. Physicians need facts. Many do not see their billing behavior the way investigators see it. And as investigators, we love data. When you can show doctors how their practices look from a data perspective, it is quite compelling. 

Also, don’t wait too long. The sooner you engage a provider whose behavior is outside the norm, the sooner you will see whether the provider’s behavior changes for the better or worse  which could indicate FWA.

Does the move to pay-for-performance affect wasteful and abusive behavior for the better? 

Attia & Maguire:  Ultimately, the transition to pay-for-performance models should dramatically reduce the type of FWA we see today as payment incentives are increasingly tied to the quality of care rather than quantity billed. When clinicians and facilities are reimbursed for outcomes rather than specific services, there is less incentive to up-code or perform wasteful tests and procedures. Further, organizations such as payer-provider entities and accountable care organizations, which take on global risk for a population, are strongly incentivizing themselves to operate efficiently, thus helping to eliminate waste.

That said, individuals who are motivated to game the system for financial gain always seem to find a way to do so when their old methods are thwarted. For example, providers who want to commit fraud in a “pay-for-performance” environment might change documentation to indicate that they treat a sicker population than they do in order to increase risk adjustment payments. Regardless of the payment model, education will always be necessary.

What are the potential long-term ramifications if no efforts are taken to help educate providers to curb the problem of waste and abuse? 

Maguire: Waste and abuse should be viewed as a significant opportunity to unlock savings. It’s common knowledge that at 18% of GDP, the cost of health care in the US and the continued growth in costs are unsustainable. The Institute of Medicine reported in 2012 that well over $700 billion dollars could be attributed to wasteful spending. Reinvesting even a fraction of that money could provide care to countless patients. 

Further, waste and abuse is a part of the puzzle that results in decreased clinician reimbursement, posing a major challenge in a career where the average starting physician carries well over $200,000 in educational debt. As that debt burden grows and pressure on reimbursement mounts, there continues to be less incentive to become a doctor in a health system that is in great need of primary care physicians.

Jala Attia is senior program director of Commercial Program Integrity Solutions at General Dynamics Health Solutions. Dr. John Maguire is chief medical officer at General Dynamics Health Solutions and a practicing emergency medicine physician.