IBJNews

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Hiking blocks to an office after fighting traffic is not logical. Having office buildings around the loop, 465 and in cities in surrounding counties is logical. In other words, counties around Indianapolis need office buildings like Keystone, Meridian, Michigan Road/College Park and then no need to go downtown. Financial, legal, professional businesses don't need the downtown when Carmel, Fishers, North Indy are building their own central office buildings close to the professionals. The more Hamilton, Boone county attract professionals, the less downtown is relevant. Highrises have no meaning if they don't have adequate parking for professionals and clients. Great for show, but not exactly downtown Chicago, no lakefront, no river to speak of, and no view from highrises of lake Michigan and the magnificent mile. Indianapolis has no view.

  2. "The car count, THE SERIES, THE RACING, THE RATINGS, THE ATTENDANCE< AND THE MANAGEMENT, EVERY season is sub-par." ______________ You're welcome!

  3. that it actually looked a lot like Sato v Franchitti @Houston. And judging from Dario's marble mouthed presentation providing "color", I'd say that he still suffers from his Dallara inflicted head injury._______Considering that the Formula E cars weren't going that quickly at that exact moment, that was impressive air time. But I guess we shouldn't be surprised, as Dallara is the only car builder that needs an FAA certification for their cars. But flying Dallaras aren't new. Just ask Dan Wheldon.

  4. Does anyone know how and where I can get involved and included?

  5. While the data supporting the success of educating our preschoolers is significant, the method of reaching this age group should be multi-faceted. Getting business involved in support of early childhood education is needed. But the ways for businesses to be involved are not just giving money to programs and services. Corporations and businesses educating their own workforce in the importance of sending a child to kindergarten prepared to learn is an alternative way that needs to be addressed. Helping parents prepare their children for school and be involved is a proven method for success. However, many parents are not sure how to help their children. The public is often led to think that preschool education happens only in schools, daycare, or learning centers but parents and other family members along with pediatricians, librarians, museums, etc. are valuable resources in educating our youngsters. When parents are informed through work lunch hour workshops in educating a young child, website exposure to exceptional teaching ideas that illustrate how to encourage learning for fun, media input, and directed community focus on early childhood that is when a difference will be seen. As a society we all need to look outside the normal paths of educating and reaching preschoolers. It is when methods of involving the most important adult in a child's life - a parent, that real success in educating our future workers will occur. The website www.ifnotyouwho.org is free and illustrates activities that are research-based, easy to follow and fun! Businesses should be encouraging their workers to tackle this issue and this website makes it easy for parents to be involved. The focus of preschool education should be to inspire all the adults in a preschooler's life to be aware of what they can do to prepare a child for their future life. Fortunately we now know best practices to prepare a child for a successful start to school. Is the business community ready to be involved in educating preschoolers when it becomes more than a donation but a challenge to their own workers?

ADVERTISEMENT