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Anti-fraud Groups Urge Fraud Fighting Be Included in Health Reform’s Medical Loss Ratios
Anti-fraud efforts should be included in health-care reform’s requirement that a percentage of premiums be used to improve the quality of health care, two leading anti-fraud groups have told the nation’s insurance commissioners.
“Excluding anti-fraud expenses by insurers in the medical loss ratio would discourage insurers from investing in anti-fraud activities, which would be counter to long-held public policy that encourages insurers to develop effective programs to combat fraud,” the Coalition Against Insurance Fraud and National Insurance Crime Bureau (NICB) told the National Association of Insurance Commissioners (NAIC) in a letter.
The new health care reform law requires that large group health plans dedicate 85 percent of premiums to improving health-care quality, and individual and small group plans to dedicate 80 percent. The NAIC is working to define what is included in the so-called “medical loss ratios.”
Health care fraud is by far America’s largest form of insurance fraud. “These are costs that directly lead to increased premiums paid by consumers and decrease the pool of money available to dedicate to health care,” the Coalition and NICB wrote.
Investigations can reduce these costs by uncovering crooked medical providers and removing them from the insurance system. Licensing and regulatory remedies, on the other hand, can take years. “It is through investigations that it is often found that medical providers are cutting corners on health care services, including performing treatment and services that are medically unnecessary and harmful to the patient,” the Coalition and NICB wrote.
Excluding insurer anti-fraud expenses also could disrupt ongoing joint efforts by the Justice Department, Health and Human Services, and private industry to develop anti-fraud partnerships. Such partnerships are crucial because often the same crooked medical providers and organized rings that bilk government insurance programs also defraud private insurers.
“We strongly believe that insurer expenditures on anti-fraud efforts will improve the quality of health care, help reduce the cost of health care, and increase the affordability of health care to consumers,” the Coalition and NICB wrote.
The Coalition Against Insurance Fraud is a national alliance of insurance companies, consumer groups and government agencies combating all forms of insurance fraud.
The National Insurance Crime Bureau is the nation’s leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through information analysis, investigations, training, legislative advocacy and public awareness. The NICB is supported by nearly 1,100 property and casualty insurance companies and self-insured organizations.
Contact: James Quiggle
