Health insurers' anti-fraud bid seeks to ease profit-limit rule

Back to TopCommentsE-mailPrintBookmark and Share

Health insurance executives who met at the White House Thursday to mark their contributions to fighting fraud told the Obama administration that the cost of those efforts shouldn’t be counted toward profit limits that were imposed under the 2010 U.S. health-care overhaul.

Under the Affordable Care Act, insurers can keep 20 percent of revenue from customer premiums for profit and administrative costs. The rest must be spent on medical care or rebated.

The Obama administration Thursday announced a partnership with the industry in which WellPoint Inc., UnitedHealth Group Inc. and other insurers may try to share more billing data with the government to root out fraud.

But the government should change the rules so the companies’ anti-fraud efforts can be classed as medical costs, said Richard Migliori, executive vice president of health services at UnitedHealth, the largest publicly traded U.S. health insurer.

Changing the rule “would make it easier for the industry to do the most that they can,” Migliori said in a telephone interview after leaving the meeting in Washington, D.C. “Anything we do to prevent fraud counts as administrative costs.”

Activities to fight fraud, such as investigating suspicious billing claims or checking doctors’ address changes to make sure they are legitimate, have become a greater focus of regulators seeking to rein in unnecessary costs.

A White House spokesman, Nick Papas, declined to comment on the industry’s request for a change to the profit limit.

The government shouldn’t change the profit rule, said Ethan Rome, executive director of Health Care for America Now!, an activist group critical of insurers.

Raising the issue at the White House meeting was “classic bad-faith,” he said by phone. “There’s lots of things that insurance companies can do to improve the delivery of care and to reduce the cost of care. But those things should not be counted as medical care.”

Insurers, including UnitedHealth, have previously asked the administration to change the way their anti-fraud efforts are accounted for under the profit rule. Money that insurers recover from fraud that is discovered can be deducted from administrative costs when calculating whether they exceeded the profit limit. The companies can only deduct as much as they spend on their anti-fraud activities.

The rule discourages investment in anti-fraud efforts or attempting innovative fraud programs that risk failing, said Alissa Fox, who oversees lobbying and policy at the Blue Cross Blue Shield Association in Washington. The president and CEO of the association, Scott Serota, attended the White House meeting.

“You don’t want to have a disincentive for people to allocate appropriate resources on fraud,” Fox said. “You don’t know how much you’re going to recover until you recover it.”

The Justice Department estimates that Medicare, the health program for the elderly and disabled, and Medicaid, the program for the poor, are plagued by at least $60 billion in fraud a year.

“We know that fraud’s taking place across the health care system with many private insurance companies facing the same challenges that we do,” Health and Human Services Secretary Kathleen Sebelius said at the meeting with insurers.

The government recovered about $4.1 billion in 2011 from fraud against federal health programs that was discovered, Attorney General Eric Holder said.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. If what you stated is true, then this article is entirely inaccurate. "State sells bonds" is same as "State borrows money". Supposedly the company will "pay for them". But since we are paying the company, we are still paying for this road with borrowed money, even though the state has $2 billion in the bank.

  2. Andrew hit the nail on the head. AMTRAK provides terrible service and that is why the state has found a contractor to improve the service. More trips, on-time performance, better times, cleanliness and adequate or better restrooms. WI-FI and food service will also be provided. Transit from outlying areas will also be provided. I wouldn't take it the way it is but with the above services and marketing of the service,ridership will improve and more folks will explore Indy and may even want to move here.

  3. They could take the property using eminent domain and save money by not paying the church or building a soccer field and a new driveway. Ctrwd has monthly meetings open to all customers of the district. The meetings are listed and if the customers really cared that much they would show. Ctrwd works hard in every way they can to make sure the customer is put first. Overflows damage the surrounding environment and cost a lot of money every year. There have been many upgrades done through the years to help not send flow to Carmel. Even with the upgrades ctrwd cannot always keep up. I understand how a storage tank could be an eye sore, but has anyone thought to look at other lift stations or storage tanks. Most lift stations are right in the middle of neighborhoods. Some close to schools and soccer fields, and some right in back yards, or at least next to a back yard. We all have to work together to come up with a proper solution. The proposed solution by ctrwd is the best one offered so far.

  4. Fox has comments from several people that seem to have some inside information. I would refer to their website. Changed my whole opionion of this story.

  5. This place is great! I'm piggy backing and saying the Cobb salad is great. But the ribs are awesome. $6.49 for ribs and 2 sides?! They're delicious. If you work downtown, head over there.