Stopping Health Insurance Fraud

by Rick Boxx
May 1st, 2003

In 1929, Justin Ford Kimball, an official at Baylor University introduced a plan to provide schoolteachers with 21 days of hospital care for $6 a year. This, according to the Blue Cross Blue Shield Web site, was the beginning of an idea that attracted nationwide attention.

This concept was combined with another idea, which began after the turn of the 20th century in the Pacific Northwest, to form an industry today referred to as health insurance. The other idea came from some lumber and mining camps that wanted to provide medical care for their employees, so they paid a group of physicians called “medical service bureaus” monthly fees for their service.

The concept of pooling the resources of many people, to share the burden of a few in need, is older than the model found in the book of Acts. Even then, fraud was a problem. In Acts 5, Ananias and Sapphira wanted credit for sharing all their profit from a land sale with their Christian community, even though they kept part of the money for themselves. Just before God struck Ananias and Sapphira dead, Peter basically told them that they couldn't defraud the Holy Spirit.

According to the Social Security Administration’s Web site, Federal Rules and Regulations No.7 of 1933 gave official recognition for the first time to the idea that medical care should be considered a basic human right, along with food, clothing, and shelter. This philosophy began permeating the government and much of our culture.

Fraud is pervasive in the health insurance industry. According to the National Health Care Anti-Fraud Association, fraud amounts for 10 percent of U.S. healthcare expenditures. The Government Accounting Office (2001) claims taxpayers pay up to $1 billion a year in inflated drug prices, due to potential fraud and loopholes in Medicare.

A study conducted by Accenture Ltd. in 2003 found that nearly one out of four Americans says it’s okay to defraud insurers. It is no wonder that health insurance rates are climbing so fast, and leaving many without coverage. With a reported 41 million people uninsured in this country, what has become a “basic human right” is obviously not being fulfilled.

So who are the guilty parties? Is it the physicians, the patients, the government, the insurance companies, the hospitals, or the drug companies? Unfortunately, it appears that almost everyone has a role to play in this terrible dilemma.

Doctors

According to the Journal of the American Medical Association (2000), nearly one of three physicians says it’s necessary to game the health care system to provide high quality medical care. To game the system is a nice way to say defraud.

Take Dr. Andrew Cubria of Chicago, Illinois for example. Dr. Cubria performed more than 750 mostly worthless and painful heart operations to bilk taxpayer supported Medicaid out of millions of dollars, according to the Coalition Against Insurance Fraud website. At least two people died from Cubria’s needless angioplasties.

Patients

Pressed with the huge cost of medical treatment, many patients are quick to do whatever it takes to get the services they desire. The Journal of the American Medical Association claims that in the year 2000 more than one of three physicians say patients have asked physicians to deceive third-party payers in order to help the patients obtain coverage for medical services

Government

Many people blame the U.S. government for our bloated medical system. Doctors get frustrated with the bureaucracy of collecting payments from Medicaid and Medicare. The system is complicated, and in many cases unfair. This has driven many doctors to pad their charges, and sometimes even opt out of the government’s system altogether.

Insurance Companies

The concept of sharing medical burdens was originally designed to enable people with medical problems to be assisted by people who are currently healthy, but may later have needs. It is now for the healthy, to pay for the healthy, while the high-risk individuals are either declined or priced out of being able to afford service.

The current insurance structure costs more and provides less. Doctors are pitted against patients, and patients against the insurance company. The result of these issues has been an “us against them” mentality. This adversity creates ill will and more fraud.

Hospitals

There is no doubt that hospitals have incredible capital expenditures necessary to carry out their mission. These costs must be recouped so that they can continue in business, but this needs to be done with integrity. The integrity of the system is often undermined through the billing system.

After my wife had surgery many years ago, I had the opportunity to experience the typical billing process. First, we received a bill for several thousand dollars. There was no detail—just one line item with a huge amount.

When we finally received the detailed bill the charges were stunning. We found double billing and medication charges far above normal prices of a local pharmacy.

Next came working out the payment plan. We found out that many hospitals will give a 30% reduction in the bill if you pay cash. You can wait 30 days and pay cash and still get the discount, but if you are an insurance company they will bill at full fare. This entire process left me feeling uncomfortable.

Drug Companies

In recent years, many pharmaceutical companies have been investigated, and sometimes fined or convicted, for improper or illegal billing of medications. When it comes down to a life or death situation, people will pay whatever it takes to get the medicines they need, but that doesn’t necessarily justify the drug companies' charges.

When my wife was on chemotherapy she had terrible nausea. Out of desperation I purchased a marijuana derivative legally designed for nausea. I was shocked when they told me it was almost $500 for a few pills that would only last a few days. I was told I could have gone on the street and, for $20, bought dope that would have provided the same relief.

With so many different parties involved in healthcare it makes for a difficult time in determining what can be done to stem the tide of fraud, and its associated costs. There is a time-tested place for answers: the Bible.

A Biblical Approach

For many years my family has been a part of a biblical alternative to insurance called Samaritan Ministries. Samaritan is a Christian newsletter ministry, which publishes the health care needs of its members. For $175 a month (per family) we have the right to share our medical burdens with over 8,000 other Christian members. We help others in the group with their medical needs, and they help us when we have needs.

It is an incredible blessing to receive notes, prayers, and money directly from other subscribers, as God’s provision to cover our medical needs. There are some differences and drawbacks from traditional insurance, but the benefits of watching God’s people care for each other is a real blessing to us, and to our kids.

This system makes you feel more a part of the body of believers nationally. Ephesians 4:25 teaches, “Therefore each of you must put off falsehood and speak truthfully to his neighbor for we are all members of one body.” This type of program makes you feel more part of the body, and more willing to put off falsehood.

Many people are not comfortable leaving their traditional health insurance plans. So for those of you in that category there are some steps you can take to do your part in controlling fraud in the system, which will eventually result in lowering costs.

  1. Be a person of integrity. Although the total amount of fraud is overwhelming and uncontrollable, we can control one person’s actions: our own! Don’t be tempted by the possibility of easy money. Only file claims that are legitimate, and do not participate or involve a doctor to do what does not meet the insurance companies legal guidelines.

     

  2. Hold others accountable. According to Progressive Insurance (2001) 29 percent of Americans would not report insurance scams committed by someone they know. If you know a doctor who is using you to bilk the system, go to them and tell them to stop. If they don’t listen, report them. Without accountability the problem will only get bigger.

     

  3. Look for alternatives. Much of health care fraud is committed due to greed and fear. Fear, especially on the patient side, often relates to large looming expenses. If fear creeps in, look for legal alternatives. Consider a program like Samaritan Ministries or speak to your church about financial assistance. It takes humility to ask for help, but it ultimately leads to a met need, and a community drawn closer together for a common good.

Health insurance fraud is out of control, and is not likely to be reigned in soon, but if each one of us plays our role, we can make a difference. Ephesians 4:28 says it best, “He who has been stealing must steal no longer, but must work, doing something useful with his own hands, that he may have something to share with those in need.” Stop and look at what you can do personally to make a difference in this raging battle for the soul of our health insurance industry.

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