Red Flags for Provider Fraud

by Michael Davis, IWIRC Corp.

Provider fraud occurs when a provider intentionally misrepresents the facts of an injury. According to one survey, employers blame providers for workers’ compensation fraud 10 percent of the time on average. Some have surmised that since the medical fee schedule decreases of 2011, provider fraud in Illinois is on the rise.

Provider fraud generally falls into one of two basic categories. The first is billing fraud. We’ve all heard of providers taking advantage of the system by billing for services that were never performed or unnecessarily provided. Whenever these “additional” services are billed, thousands of dollars are stolen from the insurer and employer. Often, the injured worker does not even know about the fraud and is unwittingly caught in a web of billing reviews and extra claims scrutiny. Additionally, claims costs increase due to intense bill review processes, case manager usage for the questionable claim, and potential legal action taken against the provider or the claimant.

The second category of provider fraud is a little subtler, but no less fraudulent. When a medical provider deliberately documents that a worker has any type of disability or ailment with no basis in fact, that provider is committing fraud. This does not include differing opinions from different medical providers regarding an ailment, nor does it mean that a diagnosis cannot be modified due to new, objective findings. These occur frequently and should not be misconstrued as fraud.

Consider some basic “red flags” for provider fraud, as provided by a range of sources. None stands alone as fraud, but any of these should cause you to ask questions:

  • The injured worker does not recall having received the billed service; 
  • Providers’ reports read nearly identically, even for different patients with different conditions; 
  • Frequency or duration of treatments is greater than expected for allowed injury type, especially for protracted claims; 
  • Larger volumes of prescription drugs than expected are billed for the injury type; 
  • No change in treatment even when no measurable improvement is documented after an extended period; 
  • The same provider(s) and attorney(s) are repeatedly associated with questionable claims; 
  • Bills for dates of service come after there has been a change of medical provider; 
  • Documentation does not support and/or is inconsistent with the services billed; 
  • There are frequent delays in the submission of requested records; 
  • Provider is actively billing multiple claims for an injured worker; 
  • Day(s) or date(s) of service are inconsistent with the type of provider.

In addition to recognizing these red flags, developing a relationship with the providers you use can be of great help. Unfortunately, many good medical providers get categorized with the "fraudulent" ones simply because there is no working relationship. Prevent this by talking with your provider. Do they quickly rectify billing issues with a reasonable explanation? If you do not understand the documentation, was a competent person willing to answer your questions on behalf of the provider?

Provider fraud is an unfortunate reality. However, by recognizing the unscrupulous practices and developing open communication with your provider, you can greatly reduce the fraudulent practices that occur. iBi


Source URL: https://www.peoriamagazines.com/ibi/2014/oct/red-flags-provider-fraud