Gov't stepping up fight against health care fraud

WASHINGTON -- Stepping up their game against health care fraud, the Obama administration and major insurers announced Thursday they will share raw data and investigative know-how on a scale not previously seen to try to shut off billions of dollars in questionable payments.

At a White House event with insurance executives, Health and Human Services Secretary Kathleen Sebelius said the new public-private partnership will allow government programs and the insurance industry to take the high ground against scam artists constantly poking the system for weaknesses.

"Lots of the fraudsters have used our fragmented health care system to their advantage," Sebelius told reporters. "By sharing information across payers, we can bring this potentially fraudulent activity to light so it can be stopped." State investigators are also part of the effort.

Fraud is an endemic problem plaguing giant government programs like Medicare and Medicaid, and a headache also for private insurers. But many of the details of the new partnership have yet to be worked out. It doesn't even have a budget, officials said. However, the goal is to start producing results in six months to a year. Extensive sharing of claims data will take longer because difficult legal and technical issues have to be worked out.

The agreement is unusual because it brings together longtime foes to tackle a common problem. Insurers are grudgingly carrying out the many requirements of President Barack Obama's health care overhaul law, even as they continue lobbying to roll back some of its provisions, such as new taxes on the industry and cuts to private plans offered through Medicare. Obama continues to rail against industry "abuses."

Industry leaders stressed that combating fraud is in everyone's interests.

"What's in it for us is that if you have more data, you are going to be able to recognize aberrant patterns more reliably," said Dr. Richard Migliori, an executive vice president of UnitedHealth Group, the nation's largest insurer. "These perpetrators are moving around from one place to another. You are going to have more eyes on them and they are going to feel surrounded."

Attorney General Eric Holder, who took part in the announcement, said insurers and government will "come together as never before to share information while protecting patient confidentiality."

Fraud is estimated to cost Medicare about $60 billion a year, and the Obama administration has beefed up the government's efforts to stop it, bringing in record settlements with drug companies for marketing violations as well as using new powers in the health care law to pursue low-level fraudsters with greater zeal.

Yet, although Medicare is becoming a harder target, it's too early to say if the tide has turned.

Some anti-fraud efforts launched with great fanfare have not delivered convincing results. For example, in the summer of 2011 Medicare unveiled a $77-million computer system designed to head off fraud before it happened. By last Christmas, it had stopped just one suspicious payment from going out, for $7,591.

Likewise, the new public-private collaboration could face problems. Privacy advocates may object to extensive scrutiny of claims data, and doctors have traditionally pushed back against routine computerized monitoring of their practice patterns. Dr. Jeremy Lazarus, president of the American Medical Association, said doctors must be involved in any analysis of billings.

Many details of the new effort are still unclear, but the possibilities include sharing information on new fraud schemes as they pop up, using claims data to catch bogus payments, and computer analysis to spot emerging patterns of fraud.

White House officials said a "trusted third party" would comb through data from Medicare, Medicaid and private health plans and turn questionable billing over to insurers or government investigators. That third party organization has yet to be selected.

Fraudsters often simultaneously target both government programs and private insurance plans. Separately, such claims might not raise suspicions, but taken together they could raise a red flag, such as when a doctor bills for more than 24 hours in a day.

An industry official familiar with the discussions said the partnership will involve sharing of such information as billing codes associated with fraud for different insurers. Extensive sharing of claims data will take longer to work out because of privacy and legal concerns. The official declined to be identified because he was not authorized to discuss the subject in public.

A former top Justice Department health fraud prosecutor cautioned that the campaign could become unwieldy, since some participants may have conflicting interests. "The government has great intentions but I am concerned when I see so many involved companies," said Kirk Ogrosky, now with the law firm Arnold & Porter. Ogrosky said broad support is valuable but sometimes the best way to handle fraud is by listening "to people who know what they are doing and letting law enforcement work."

Industry support for the partnership includes America's Health Insurance Plans and the Blue Cross and Blue Shield Association, the two major trade groups, as well as individual companies like United and WellPoint, Inc. Formal working meetings are scheduled for September.

Law enforcement organizations taking part include the FBI, the Health and Human Services Inspector General's Office, the Justice Department, and state fraud control units.

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Associated Press writer Kelli Kennedy in Miami contributed to this report.