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How to Drastically Eliminate Insurance Fraud

on June 9th, 2011 | Filed under Optoblog

This week I heard about a New York physician telling all his medicaid patients that they had HIV/AIDS, even though they didn’t, because he could bilk Medicaid for tons of money running HIV testing/office visits.

Today I hear about an optometrist in Utah who bilked Medicaid for patients he never even saw!

Before insurance companies (especially government ones) start bearing down on all of us with burdensome regulations because of a few bad actors, let’s take a step back an look at the problem from a different angle.

This is why insurances shouldn’t pay for physician office visits, but if they want to, then leave the doctor out of it and just reimburse the patient. My car insurance doesn’t pay for oil changes or gasoline. If my car insurance was crazy enough to offer an oil change benefit, then that would be great, but if I’m Convenience Lube, then no way would I take deferred payment from some car insurance company. I would demand the car owner pay at the time of service, and their crazy insurance company can reimburse the car owner later. If my car is in a major accident, then I would less likely have cash on hand for an expensive repair, so this is when the insurance companies would step in. Besides, autobody shops are much more accustomed to dealing with insurance compared to oil change shops or gas stations.

This is how it should be in healthcare. Only certain providers would really have a need to regularly bill insurances. Mostly doctors doing surgeries, hospitals, or other high cost care environments.

Number one, this helps lower the cost of medical care because people find out how much it actually costs since doctors don’t have a big menu/price sign over the reception desk. Second, doctors don’t have to spend tons of money and time filing claims. Third, the incidence of doctors perpetrating insurance fraud would go down because doctors would have less opportunity anyway. Fourth, if something isn’t covered by insurance, who presently gets to eat it? Usually the doctor. Patients paying their own office visits would force the patient to be more accountable for whether they really want/need a particular service, regardless if they expect their insurance to reimburse or not.

The doctor shouldn’t be beholden to any insurance company. He should deliver care according to his training/experience. She shouldn’t have to try to remember that Insurance A will pay for a visual field once a year, but Insurance B will allow it twice a year, etc. He shouldn’t think about if he has the patient do an extended medical history, he can upgrade his exam from level 3 to level 4 to bilk the insurance company for all they’re worth because hey, the patient is only paying a copay, right?

I think big ticket items like billing for surgeries or expensive procedures should still be billed by providers/hospitals since this is what insurance is for: paying for catastrophic, unexpected events. But all the little stuff, like inpatient food service and routine exams and regular office visits should be paid up front by patients. It would lower healthcare costs because providers could lower prices since their labor and accounts receivable would decrease. It would decrease over-utilization since patients have a financial stake in the process. It would decrease fraud since there would be less opportunity to create fraud by the majority of doctors/patient encounters.

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