The Corporate and Financial Investigations Department (CFID) at IBC continues to address the rising cost of health care by identifying, investigating, and reporting suspicious cases of fraudulent and abusive practices to law enforcement authorities. In addition, CFID is responsible for conducting audits of billing activity for facility, professional, and ancillary service providers.

During 2012, CFID received over 1,000 allegations of fraud, waste, abuse, or aberrant billing practices. More than 75 investigations were initiated. Audits were conducted on 148,266 hospital claims, 349 professional providers, 2,791 pharmacy drug utilization desk audits, and 377 pharmacy retail sites.

Evidence gathered through these investigations resulted in 38 referrals to law enforcement or regulatory authorities. Grand Jury indictments and the filing of criminal information charges were brought against eight individuals. In addition, 16 guilty pleas or convictions resulted in sentences ranging from probation to 72 months incarceration.

The fraud schemes most often used were:

• billing for services not rendered;
• up-coding procedure codes in order to receive higher reimbursement;
• submission of false claims;
• prescription fraud.

The investigations and audits performed or facilitated by CFID in 2012 resulted in approximately $69 million in recoveries of overpaid claims, with an additional $4.2 million identified but not yet recovered. Over the last ten years, CFID has recovered more than $476 million in overpaid claims.

Based partially on the positive national reputation achieved by CFID, IBC was one of four Blue Cross? Blue Shield? Plans asked to participate in a joint federal government, state agency, and private sector Health Care Fraud Prevention Partnership to help address the rising cost of health care in America.

Questionable billing and coding practices and trends identified during 2012 will result in increased audits in 2013 in the following areas:

Facility provider audits

• Credit balance audits correct overpayments that can adversely affect balance sheets of both IBC and its hospital providers.
• DRG audits focus on the correct coding of documented medical information by analysis of medical records for inpatient claims.
• IBC medical policy audits ensure that facilities are aware of and follow IBC medical and claim payment policies as they pertain to our members.
• Outpatient fee schedule audits select claims for review based on either government edits or on those procedure codes that have been identified as frequently miscoded and incorrectly billed.
• Readmission audits pertain to an unplanned inpatient hospital admission within three days of discharge from a previous inpatient hospital stay and for a condition directly related to the original inpatient hospital stay.

Professional provider audits

• New patient evaluation and management (E&M) code audits verify that a member has not received a new patient E&M service within the past three years from multiple physicians of the same specialty in the same group.
• Single- versus multiple-unit audits ensure that the correct units are billed, as defined for CPT? codes.
• High-dollar medication audits focus on high-dollar medications that are administered in a physician?s office to ensure the accuracy of claims billed.
• Duplicate billing audits ensure that duplicate claims are denied appropriately.
• Split-billing audits look at claims for the same member, from the same provider, for the same date of service and visit.
• Modifier 25 audits look at E&M codes billed with modifier 25 on the same day as preventive medicine codes were billed. This process ensures that the E&M service was for a significant and separately identifiable service from the preventive medicine service.
• Inpatient and outpatient E&M service audits ensure that appropriate levels are billed and paid, including consultation codes and the use of modifiers 24 and 25 with E&M claims submissions.
• Office site-of-service audits ensure that services receiving a site-of-service differential were rendered and billed in the office where the service took place.

Although CFID?s ongoing efforts are effective, we still need your help. The sophisticated software data-mining tools used and our toll-free hotline provide valuable leads, but there is no substitute for your vigilance. Allegations received from our provider community are extremely valuable; therefore, we ask you to continue to contact CFID if you are suspicious of any questionable health care activity.

You can contact us by calling our toll-free Corporate Compliance and Fraud Hotline at 1-866-282-2707 or by going to www.ibx.com/antifraud and filing an electronic report.