6 Costly & Wasteful Commercial Healthcare Claims

Six common algorithms for commercial claims spur more than $122 million in overpayments each year, suggesting an ample amount of wasteful and potentially fraudulent healthcare spending in the commercial sector, according to a new analysis from Truven Health Analytics.

Of the $600 billion to $850 billion of wasteful healthcare spending in the country, $125 billion to $175 billion of that is attributable to fraud and abuse.

Although Medicare and Medicaid fraud has been a topic of detailed publicity and heightened scrutiny in the past few years, Truven's Payment Integrity Analysis identified six payment integrity algorithms from the commercial sector that caused $122.6 million in overpayments in one year.  

1. Schedule II drugs without physician care — $84.3 million. The analysis identified patients receiving Drug Enforcement Administration Schedule II drugs with no record of a medical visit 90 days prior to their receipt of the prescription. Data showed than 20 percent of patients receiving Schedule II drugs, which include hydrocodone/paracetamol, morphine and oxycodone, did not have associated medical visits.

2. Multiple new patient office visits for a patient with the same provider in three years — $18.5 million. According to American Medical Association guidelines, physicians are only allowed to bill for one such visit every three years. The analysis found that 1.4 percent of visits and 1.3 percent of the cost associated with new patient visits appeared to violate this guideline.

3. Diabetic supplies for members without a diabetes diagnosis — $8 million. The analysis found 7.4 percent of patients and 5.1 percent of costs for diabetic supplies were for patients with no diabetic diagnosis.

4. Unbundling of psychotherapy and drug management service — $5.3 million. There are hundreds of possible code pairs that should not be billed together, and this is one of them. If both psychotherapy and drug management services are provided together, they should be billed with a code that includes both services.

5. Refills of Schedule II drugs — $5.2 million. Nearly 1 percent of patients receiving Schedule II prescriptions received improper refills.

6. Medical transportation trips to nowhere — $1.3 million. This includes ambulance trips without an associated medical visit and nonemergency medical transports without an associated medical visit.

More Articles on Healthcare Fraud:

CMS: More Than 14k Providers Kicked Out of Medicare Since 2011
Updated Fraud Self-Disclosure Protocol: 5 Considerations for Healthcare Providers
10 Recent Investigations, Lawsuits and Settlements Involving Hospitals

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