Highmark Medicare Services holds the Medicare Part A contract from the Health Care Financing Administration (HCFA) for all of Pennsylvania. Under this contract, we are responsible for the processing and payment of Medicare claims for hospitals, skilled nursing facilities and rehabilitation facilities. Additionally, we are the regional intermediary for the processing and payment of rural health clinics in Regions I, II and III which includes states from Maine to Virginia and also Puerto Rico.

It is estimated that over one trillion dollars will be spent this year throughout our health care delivery system. This figure represents close to 15 percent of the total United States economic output. These figures are increasing yearly. The Federal government has become one of the world’s largest purchasers of health care services.

The prevention and detection of fraud and abuse is very important. We hear every day about Congress’ attempts to redesign the Medicare program because health care costs continue to increase. Costs are increasing because the population is getting older and requiring more medical services. New medical technology and procedures are developed and these are expensive. Medical services are often duplicated and this increases costs. And, there’s medical fraud and abuse. The United States General Accounting Office estimates that 10% of all medical claims are fraudulent.

The Medicare program covers approximately 40 million people. Almost one million providers service Medicare beneficiaries, including 60,000 hospitals, nursing homes, home health agencies, hospices and other facilities, 160,000 laboratories, 140,000 suppliers, and almost 700,000 physicians receive some sort of payment from this program. Considering the size, complexity and sheer volume of the beneficiaries, providers, and claims handled by Medicare, it is not hard to understand how vulnerable it is to fraud and abuse. Medicare programs have developed many initiatives to strengthen the program against fraud, waste and abuse.

The effort to prevent and detect fraud, abuse, and waste is a cooperative one involving beneficiaries, Medicare contractors, providers, Peer Review Organizations (PROs), State Medicaid Fraud Control Units (MFCUs), and Federal agencies such as HCFA, Office of Inspector General (OIG), Department of Health and Human Services (DHHS), the Federal Bureau of Investigation (FBI), and the Department of Justice (DOJ).

At Highmark Medicare Services, the Benefit Integrity Unit is responsible for preventing, detecting and deterring Medicare fraud and abuse. The Benefit Integrity Unit:

• Prevents fraud and abuse by identifying program vulnerabilities and takes remedial action,
• Proactively identifies incidents of fraud that exist within its service area and takes appropriate action on each case,
• Develops (determines factual basis) allegations of fraud made by beneficiaries, providers, the Health Care Financing Administration (HCFA), the Office of Inspector General (OIG) and other sources,
• Explores all available sources of fraud leads in its jurisdiction, including Medicaid Fraud Control Units (MFCU) and private insurance companies,
• Initiates appropriate administrative actions to deny claims, suspend payments or recoup identified overpayments that should not be made to providers where there is a reliable evidence of fraud,
• Develops cases and refers them to the OIG for consideration of civil and criminal prosecution and/or application of administrative actions,
• Provides outreach to providers and beneficiaries, and
• Initiates and maintains networking and outreach activities to ensure effective interaction and exchange of information with internal components as well as outside groups

The primary role regarding the fraud function is to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid out and that any mistaken payments are recouped. Suspension and denial of payments and the recoupment of overpayments are only some of the actions that may be taken. Where appropriate, cases are referred to the OIG, Office of Investigations Field Office (OIFO) for consideration and initiation of criminal, civil monetary penalty, or administrative sanctions actions.

There are as many types of health insurance fraud as the criminal mind can invent. The three most common types are false claim schemes, false application schemes, and false coverage schemes. All add to the cost of medical care coverage. The operator of a health insurance fraud scheme does not need to actually obtain payment on the false claim to be guilty of a crime -- submitting the fraudulent claim is enough to risk prosecution.