Medical Mutual Reports Record Amount Recovered from Fraudulent, Improper Claims

Armed with new anti-fraud software, the Financial Investigations department of Medical Mutual of Ohio reportedly recovered more than $4.5 million in fraudulent or erroneous claims in 2004.

“This is a huge step in trying to keep a lid on rising healthcare costs,”
said Brien Shanahan, director of Legal Affairs for Medical Mutual. “There are many reasons for the rising cost of healthcare. We owe it to our customers to limit the impact of fraud as much as possible.”

Combined with figures for 2003, Medical Mutual realized a record-setting recovery of more than $9-million in fraudulent or improper claims over a 48-month period. “Healthcare fraud affects the entire nation and costs each and every one of us dearly,” said Shanahan, adding, “health insurance industry experts estimate healthcare fraud amounts to $95 billion a year.”

The STARSentinel software, developed by ViPS, a WebMD company, enables the Medical Mutual Financial Investigations unit to better detect fraudulent and improper claims from doctors, hospitals, outpatient centers and pharmacies. The program examines claims and calls attention to those that differ dramatically from a healthcare provider’s history or the norms for a given specialty or condition.

According to The Health Insurance Association of America, at least one-fourth of health insurers’ claims are sent electronically. According to Shanahan, insurers such as Medical Mutual find a screening device an essential tool in reducing health insurance fraud and keeping healthcare costs from escalating.

“ViPS StarSentinel software played a major role in all healthcare
provider-focused cases,” said John Shoemaker, manager of Medical Mutual’s Financial Investigations. “StarSentinel either generated the direct lead or was used to support the basis of a tip received,” he said.

“Some discrepancies may be simple mistakes of improperly filed claims due largely to an office staff, which may not be well trained in billing claims,” said Shoemaker. “The software is geared to identify these errors so that themistakes do not continue to happen.”

With this software, Medical Mutual routinely examines claims for a number of issues, for example, how often a hospital bills for a certain procedure or the frequency of a doctor writing prescriptions for the same drug. The software can also pinpoint “doctor shoppers” — those who visit more than one doctor to try to get prescriptions such as Oxycontin and other highly addictive drugs.

More anti-fraud software is ready to go online this year at Medical
Mutual. “In 2004 we also purchased a software package that will assist us further in identifying individuals, physicians, and pharmacies that are abusing prescription drugs,” said Shoemaker. “We are working on bringing this software on line early this year and both of these software programs will help us to hold the line against health insurance fraud in 2005.”