Wednesday, March 30, 2011

Office of the Inspector General calls out Health Safety Net on porous procedures that lead to fraud

I recently proposed a plan to free up resources allowing the state to step up the battle on fraud, waste and abuse. This week, I posted an article questioning the idea of a global payments system being the panacea for controlling health insurance costs.

Today, I’d like to draw your attention to a report released this month by the Office of the Inspector General (OIG) that 1) reveals inadequate systems in place to guard against fraudulent claims paid by the Health Safety Net (HSN), and 2) questions the potential cost savings of a global payments system.

The HSN makes payments to hospitals and community health centers (CHC) for health care services provided to low-income Massachusetts residents who are uninsured or underinsured. Key words here are “low-income” and “residents.” During the year ending June 30, 2010, $405 million was paid out in claims.

According to the OIG report, people claiming to be poor and uninsured are not required to provide their social security numbers. This makes it impossible for the HSN claims processors to verify income or residency. Even when they can check income, they only check for wage income. That means self-employed individuals and trust fund babies fly right through the system without being challenged.

The OIG, as you would expect, also noted claims paid to nonresidents who live in other states and other countries. The Patrick administration finally fessed up last October to the fact that $35.7 million had been spent on emergency health care for 52,000 illegal immigrants in a year’s time.

Other fraud, waste and abuse includes $6 million paid to hospitals and CHC’s for 13,000 duplicate claims, $15.1 million for 60,987 medically unnecessary claims, and $2.7 million for medically unlikely claims.

On the issue of a global payments system, the OIG warns that the Blue Cross Blue Shield pilot program creates a baseline that includes all of the sins of the past and grows it from there. There is no evidence that such a system will save any money at all.

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