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Working to Prevent Healthcare Fraud

6 min read


Louis Saccoccio, CEO

This post is sponsored by Emdeon.

Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association (NHCAA) since January 2005, works to increase awareness and improve the detection, investigation, prosecution and prevention of health care fraud.

Prior to joining NHCAA, he served as Senior Vice President of Professional Services at America’s Health Insurance Plans (AHIP) as well as General Counsel. We spoke with him about the current state of the industry and NHCAA’s plans for 2015.

Q: What was the most important trend affecting fraud prevention in 2014?

LOU SACCOCCIO: Much of the focus over the last few years has been on data analytics, not only on the private side but also in Medicare and the government programs. The Centers for Medicare & Medicaid Services (CMS) developed a fraud prevention system that employs a range of data analytical techniques, including predictive models and social network analysis. Both private and public health plans are now looking to prevent fraud and detect it as early in the process as possible as opposed to the more traditional pay-and-chase model, where you pay claims and then try to determine if there was fraud and to recover your losses.

The emphasis on data analytics certainly has been an important element in 2014 and will continue to lead efforts in fraud prevention in 2015 and in subsequent years. The more you can do with analytics to prevent the dollars from going out of the door in the first place the better off you are.

Q: What will NHCAA be focusing on in 2015?

LS: A trend that has been growing in 2014 but I expect to play an even more important role in 2015 is information sharing. Information sharing is connected to the growth of data analytics because it is a crucial part of enhancing the effectiveness of data analytics. As each company applies analytics to its own claims, and as the government does the same, it’s important that they share the results of their work. Payers probably are focusing their efforts in different areas, and they may be using different techniques and getting results that the other payers are not aware of. So it becomes critically important that payers share anti-fraud information developed from their respective work and analyses. This leads overall to more effective anti-fraud outcomes.

Information sharing is at the heart of what we do at NHCAA. To give you an example: Only a couple of years ago we had in the range of 34,000 searches in our database of investigations conducted by private plans and law enforcement. That number this year is close to 50,000 searches. We also are increasingly bringing the private and public side together in case discussion roundtable meetings, and we have seen an enormous uptick in requests for investigative assistance from law enforcement where for law enforcement queries private plans through NHCAA for possible exposure in ongoing government fraud investigations. That kind of sharing is critical and will remain so in 2015, and I consider it among our biggest accomplishments this year.

Similarly, the private payers and CMS have begun to take information sharing to the next level through the Health Care Fraud Prevention Partnership. While the Partnership is in its infancy, it has already been taking data from individual companies and analyzing it, along with Medicare data, and then sharing its findings with the participating entities.

These are the kinds of activities that are making data analytics and information sharing more and more important in the prevention of health care fraud with each passing year.

Q: What would you like the next step to be in building a more effective fraud prevention system?

LS: I think the government has recognized the critical importance of data analytics in fraud prevention, and CMS has put a lot of focus on their fraud prevention system. But technology isn’t the entire answer, and as we focus on data analytics and information sharing we shouldn’t lose sight of the necessity to have adequate human resources dedicated to fraud prevention.

Data analytics can give you insight about where you should focus your anti-fraud resources, but you still need the people with the medical, investigative, and analytical expertise who can do the follow-up and conduct the investigations. Payers still need to make the investment to make sure they have the right human resources to get this work done.

Q: What do you see as the challenges for the industry as we enter 2015 and how is the NHCAA addressing them?

LS: Our greatest challenge in 2015, as it has been all along, is to make sure that both the government and private payers invest adequate resources in fraud prevention.

On the private side, one of the newer challenges has been the application of the medical-loss ratio requirements created by the Affordable Care Act which determine what percentage of premium has to be spent on care and quality improvement as opposed to plan administration. The ACA set restrictions on the medical-loss ratio that payers must follow—85 percent of the premium dollar has to go for care with large group plans and 80 percent for small groups and individuals.

The Department of Health and Human Services recently came out with regulations that place spending on fraud prevention under the administrative side of the ledger. However, when you really look at fraud and the impact it has on the health care system, you find that it is not just a financial issue. Many times people are harmed by health care fraud through unnecessary tests and procedures being done. Then, in the pharmacy area, there are many examples of abusive practice leading to overdoses. Identity theft is also a problem. NHCAA has consistently argued that health care fraud impacts quality and needs to be seen as a quality issue. But the regulations came out the other way and now private plans have their hands tied a bit on how much they can spend on fraud prevention. There have been some discussions with HHS and we’re hoping down the road that there may be some changes to that rule which would allow plans to put expenditures on anti-fraud activities on the quality side of the ratio.