Fraud prevention for health insurers
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Describes how fraud can be detected at the point of service providing significant savings to insurers and their customers. This overview shows how Castlestone Advisors' CMS-tested technology prevents health insurance fraud. Offered as a web-service via insurers and ACO's, extremely low cost, small footprint technology catches fraudulent transactions w/o
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Fraud prevention for health insurers
- 1. Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015 Medicaid, Medicare and Private Insurance Preventing Fraud, Waste and Abuse in Health Claims May, 2015
- 2. A March 2015 GAO report says Medicaid and Medicare spend from 6.7% to over 12% on fraud, waste and abuse Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 http://www.gao.gov/products/GAO-15-440T 1
- 3. Using the more conservative Medicaid 6.7% translates into significant, ongoing costs for fraud, waste and abuse Each $1 billion in annual claims includes $67 million in claims that should not have been paid The Outpatient share of claims is approximately 40%. Assuming an even share of fraud, waste and abuse that is $27 million per year in Outpatient fraud, waste and abuse for each $1 billion in claims submitted Any dent in outpatient fraud creates material spending benefits for plans and payers alike While data analytics predicts that a given claim may be fraudulent, Location Verification directly stops them Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 2
- 4. Much fraud, waste and abuse relies on payers inabilities to verify and time and date stamp the locations of patients and providers Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 Submitted Claims Payments Data Analytics Investigation, Compliance, Enforcement & Prosecution (Large cases only) • Services not rendered • Misrepresented o Date of service o Location of service o Provider of service • Waiving of deductible or copayments • Duplicate prescriptions • False or inappropriate prescriptions • False or inappropriate fulfillment and re-fills • Billing for non-covered service • Incorrect diagnosis & bundling • Overutilization • Kickbacks and bribery 6.7% to 10% of Claims Claim prep & submit Claim validation & analysis Outpatient Services • Clinic • Lab • Imaging • Physical Therapy • Mental Therapy • Home Care • Transport- ation • Pharmacy 3 Top 10 healthcare fraud schemes: http://www.acfe.com/article.aspx?id=4294976280
- 5. Castlestone’s location verification, real time & other analyses eliminate a great deal of fraud, waste & abuse Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 Submitted Claims Payments HIGHLY FOCUSED Investigation, Compliance, Enforcement & Prosecution 6.7% to 10% of Claims Claim prep & submit Claim validation & analysis Outpatient Services • Clinic • Lab • Imaging • Physical Therapy • Mental Therapy • Home Care • Transport- ation • Pharmacy • Only pay claims with real, i.e. swiped, patient and provider • If claim data do not match swipe data, deny or refer claim • Now, smaller, infrequent and one-off frauds are also stopped Enhanced POS rules Data Analytics • Services not rendered • Misrepresented o Date of service o Location of service o Provider of service • Waiving of deductible or copayments • Duplicate prescriptions • False or inappropriate prescriptions • False or inappropriate fulfillment and re-fills • Billing for non-covered service • Incorrect diagnosis & bundling • Overutilization • Kickbacks and bribery 4
- 6. Swipes create transactions via Castlestone’s tested, secure, encrypted servers, recording or verifying IDs, locations, transactions 2. Data on Card ID, Terminal Owner, Terminal Location Merchant Code, Transaction Code, Time Stamp 3. Claim Matching • Verify terminal code • Verify medical merchant code • Lost or stolen card? • Previous time and location of swipe • Existing Rx for Class II drug?, etc. 4. Approve, Refer or Deny 5. As appropriate, verify before taking action At the: • Merchant • Provider • Physician • At home 1. Patient swipes card Health Insurer’s Analytics (Can include PMP analytics) Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 5 Secure, encrypted servers
- 7. With events like the Anthem data breach, plans, payers, providers and patients are exposed to false claims Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 Submitted Claims Payments • Most of the fraud loss absorbed by DHHS and CMS • Provider, payer and DHHS costs to resolve claim • Some providers & beneficiaries must pay • Services not rendered • Misrepresented o Date of service o Location of service o Provider of service • Triggers from non- payment of co-pays Claim prep & submit Claim validation & analysis 6
- 8. With Castlestone capabilities added fake IDs are rejected before services are delivered Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 7 Patient presents card Has mag stripe? Provider calls Payer ID confirmed Provider swipes patient card Card authenticated and validated Y Y N N N or Patient gets care Y
- 9. With Castlestone, false claims based on stolen data will not have confirming card swipes and should not be paid Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 Payments Fake claim prep & submit Claim validation & analysis • Only pay claims with real, i.e. swiped, patient and provider • In this instance, do not pay the claim • Refer for investigation, discovery and capture of fake claimant 8 HIGHLY FOCUSED Investigation, Compliance, Enforcement & Prosecution
- 10. Cards are created from eligibility records, send directly to beneficiaries, securely activated using proven methods Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 9 Patient gets care Eligibility Records
- 11. Cost and implementation considerations include: Card Creation Castlestone creates/activates/deactivates and manages cards based on guidelines. Plan Sponsor existing card manufacturing contracts can be used if they are compatible Hardware cost for plan & providers NONE. Uses existing credit card terminals Network costs for plan & providers NONE. Uses the existing credit card networks from provider offices for transactions Systems & programming costs S&P is very simple data exchange of new/change/delete clients or full real time integration Cost Structure Design and programming & card cost Hosting (data base & monthly hosting and management) Per transaction fees Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 10
- 12. Timeframe and typical results Set up completely implemented in 60-90 days, depending upon client resources All technical milestones (transaction capture, claim matching, file and interface implementation) exceed goals for speed and performance ROI for fraud prevention is in the hundreds of percents Importantly, Castlestone is applied across virtually all transactions, not just the large or the easily noticed It is the application of the prevention across the largest possible number of transactions, large and small, that creates enormous financial savings Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 11
- 13. Castlestone’s request of Medicaid and private insurance programs 1. Examine the service offering more closely in the context of known and estimated claim and fraud rates 2. Develop hypotheses on the impact and value, tangible and intangible, to patients, providers and the community at large 3. Determine a combination of service line and market to test the hypotheses 4. Run and refine the test, run it again, implement widely as the case becomes clear Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 12
- 14. Contacting Castlestone Doug Brockway Business Development – New England Castlestone Advisors LLC (617) 834-0067 dbrockway@advancecons.com Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 Jeff Leston President Castlestone Advisors LLC (212) 874-4390 Jeff@castlestone-llc.com 13
- 15. Other uses of Castlestone you may find of interest include: Title Link Fraud Prevention for Health Insurers http://slidesha.re/1pCGh98 Doctor Shopping and Prevention http://slidesha.re/1nNb9OL CMS Pilot/Test of VisitEye http://slidesha.re/1vlGGeU Management Tech. for Therapeutic Cannabis http://slidesha.re/1nQ5JkD Corporate Wellness http://slidesha.re/1qQf6Fi Confidential and Proprietary Intellectual Property of Castlestone Advisors, LLC © 2015 14