Horizon BCBSNJ Special Investigations: Saving Members’ Money by Stopping Fraud
For nearly a decade, Biodiagnostic Laboratory Services handed out lucrative bribes to entice several New Jersey physicians to steer patient blood work to their labs – resulting in millions of dollars in fraudulent billing.
The scam – uncovered by Horizon’s Special Investigations (SI) and thoroughly investigated by more than 150 state and local law enforcement personnel – led to the successful federal prosecution of 53 defendants and the recovery of more than $142 million in fraudulent health care claims.
For her work in bringing the Biodiagnostic scheme to light, and in collaborating with investigators to end this deceitful activity, Horizon SI Manager Megan McCarthy was one of 15 individuals involved in the case to earn the Investigation of the Year Award from the National Health Care Anti-Fraud Association.
“I’m proud to have been involved in putting a stop to this crime,” said Megan, who has been on the Horizon SI team since 2001. “But thanks are also due to the entire Special Investigations team and the Horizon members who called our Fraud Hotline when they realized something with their claims wasn’t right.”
"I’m proud to have been involved in putting a stop to this crime, said Megan, who has been on the Horizon SI team since 2001. But thanks are also due to the entire Special Investigations team and the Horizon members who called our Fraud Hotline when they realized something with their claims wasn’t right."
According to Megan, several factors enabled Horizon to discover that Biodiagnostic was misrepresenting actual charges, double-billing, paying medical practices for referrals and engaging in other illegal activity. Diligent Horizon members, who reviewed their Explanation of Benefits (EOB) forms and noticed charges that either seemed too high or involved services not rendered, helped kick-start the Horizon investigation. Simultaneously, SI began noticing patterns of unusually high or out of the ordinary payments to Biodiagnostic, thanks to the unit’s continual use of advanced data analytics applications.
While “bad players” like the Biodiagnostic criminals are few, they annually steal billions of dollars from insurance companies, government payers and consumers. Megan and her fellow SI investigators are zealous in ferreting out – and putting a stop to - fraud schemes involving providers and consumers.
Megan cited several examples of trends in health care fraud in recent years. Some of the more common are “impossible day” scenarios, which involve same-day claims for procedures beyond what could reasonably have been performed; upcoding, which is filing a claim for a level of service that pays at a higher rate than was actually performed; and identity theft, in which a fraudster uses a stolen member insurance card or physician credentials to get unauthorized access to the system.
Explained Megan: “Our advice to members is to always review your EOB. If the explanation provided doesn’t match what you know was done, it could simply be a mistake. Or, it could be fraud. Either way, you should check it out.”
In recent years, Horizon’s SI has saved about $40 million annually in money recovered, as well as losses avoided, through early detection of fraud schemes.
“While we cheer a case like Biodiagnostic where so much money was recovered, our first goal is always cost avoidance,” said Douglas Falduto, vice president, administration, and chief security officer, Horizon. “At the highest level, our mission is to protect our members’ health care dollars. With data analytics tools plus the capabilities of our investigators, we are identifying potential fraud earlier, which limits the overall impact.”
As in the Biodiagnostic case, collaboration is the key to detecting and uprooting fraud. SI works often with law enforcement agencies, regulators and other insurers to share best practices on fraud prevention and detection. Every other year, Horizon SI hosts a fraud summit for state law enforcement personnel, a key step in finding more efficient and effective means of protecting members’ dollars.
Horizon Blue Cross Blue Shield Director of Special Investigations Tim Dineen has conducted many of these training sessions. He has noticed that in recent years, more organizations have become willing to share information and discuss both the challenges and successes of their battles against fraud.
“The only way to reduce overall health care costs is to work together in going after the few providers or consumers who aren’t doing the right thing,” Tim noted. “The large majority of physicians and members are doing everything right and we need to do right by them.”
Do you suspect you’ve been the victim of healthcare fraud?
Call the Horizon Fraud Hotline at 1-855-FRAUD20 (1-855-372-8320), 1-800-682-9090 (TTY 711). The Fraud Hotline, offers a way for anyone - members and doctors - to alert Horizon of possible insurance fraud. You can also call the New Jersey Medicaid Fraud Division at 1-888-937-2835. TTY: 1-877-294-4356.