How to recognize, avoid and report insurance fraud

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Protecting the privacy of your medical recordsRecognizing and avoiding insurance fraud

In these days of lightning-quick transfer of information and boundless computer storage capacity, doctors, employers, insurance companies, and others can gain access to your med­ical records quite easily. Concern arises when these entities use your personal information to deny you health insurance coverage or even employment. This post discusses ways to keep abuses like these in check.

Insurance fraud costs everyone more and more, both in dol­lars and in inadequate medical treatment. Keep reading to find out how to recognize, avoid, and report insurance fraud.

Medical records may contain information about your family history, substance abuse, sexual behavior, and mental illness. You depend on these records being kept confidential. But think about the number of people who might have access to your medical records, just in the course of one visit to a health care provider: doctor, nurse, receptionist, billing office, phar­macist, health insurer. If you’re hospitalized or you visit the emergency room, the number of people increases. If your employer administers your benefits, human resource staff members may also have access to your medical records. What’s more, the Department of Health and Human Services plans to set up a “unique health identifier” number to link all your health records to one, universal number ID.

All of this probably doesn’t sound as though your records are “confidential.” They’re not.

The Medical Information Bureau (MIB), a clearinghouse for information on individual medical records, provides medical information about individuals to approximately 600 life insurance companies, many of which also offer health and disability coverage. When an individual applies for life, health, or disability insurance, the applicant’s med­ical records are likely to become part of MIB’s database. Sometimes members of small groups, late enrollees, and applicants requesting additional coverage may end up in the database as well.

Insurers pay a membership fee to MIB and a fee each time they verify applicants’ information. Insurers also report individuals’ medical conditions to MIB to add to its data­base. When you apply for an insurance policy and the insurer checks with MIB, you may end up paying higher premiums because of information MIB reports to the insurer. In an extreme case, you may not be hired for a job or you may lose a job because of a condition that shows up on your medical record.

Insurance companies are supposed to notify you if they intend to check your record at MIB when you apply for insurance. Ask your agent when you apply whether the com­pany uses MIB.

You can take steps to protect the confidentiality of your medical records:

Ask your health care providers, in writing, for a copy of your medical records. Correct any errors. Find out to whom these providers give access to your records.Instead of signing a blanket release waiver, give permis­sion to release only records that relate to a specific treat­ment or condition.Be stingy with the information — including your Social Security number — that you give out on surveys and questionnaires, especially over the phone.Check whether MIB has a record on you and make sure that the record is accurate, which is your right under the Fair Credit Reporting Act. You can write to MIB at P.O. Box 105, Essex Station, Boston, MA 02112; phone 617-426-3660; Web site www.mib .comTell MIB in writing not to release your information with­out your notarized consent. Withdraw all prior consent.Get copies of company policies covering medical records if your employer is self-insured and therefore subject to ERISA regulations. Storing medical records in person­nel files is illegal — make sure that the company policies specify that.Giving your doctor all the information necessary for your treatment is important. However, consider holding back information that isn’t relevant to your health.Call or write your congressional representative. Ask for a medical privacy law that limits medical information to health care providers and insurers and doesn’t include a universal “health identification number.”

Federal law states that medical records are confidential. Under the Americans with Disabilities Act, companies must not use medical records to make employment decisions.

Employers can find out even more from credit records that reflect billing for health care services and from bankruptcy records.

Genetic testing, which can indicate predisposition to inher­ited diseases, may become another area of concern in the pri­vacy issue. If your insurers pay for genetic testing, their records will include the results.

Insurance fraud by policyholders and others is on the upswing, and people aren’t very outraged about it. Some peo­ple think they’re just getting even with a large company, rather than committing a crime, when they defraud an insur­ance company. But everyone ends up paying for losses due to fraud through increased insurance premiums, higher taxes for government-sponsored programs such as Medicare, more expensive doctor visits, and more expensive prescription drugs.

Both patients and providers can commit fraud. Insurance frauds include

Adding to claims expenses for services not delivered or inflating the cost of services.Lying on applications or withholding material information.Submitting false claims.Faking injuries and illnesses.Medical quackery (pretending to practice medicine).Obtaining the same prescription drugs from several doctors.False coverage schemes, such as when an “insurance company” accepts your premiums but doesn’t pay your claims.Substituting a covered diagnosis for a routine checkup.

Insurance companies are fighting back to a greater and greater extent. Insurers are diligently pursuing perpetrators of fraud in every way possible, including using special investigative units and high-tech data tracking. The Department of Health and Human Services (HHS) asks that Medicare recipients review their Medicare statements. If Medicare recipients find a suspicious charge, they should call their doctor or the HHS fraud watchdog line at 800-447-8477.

Don’t be a victim of fraud. Keep your eyes open and watch for the following:

Free testing or screening offers that involve showing your health insurance ID card or Medicare cardDoctors or other providers who want you to sign a claim form before providing a serviceDoctors or other providers who explain that they can prepare a bill so a charge that an insurance company doesn’t usually cover will be coveredMedical laboratories or health clinics that bill for tests or other services that they didn’t provideDoctors who bill for inpatient hospital services on dates you weren’t in the hospital

Keep fraud at a minimum with these measures:

Ask your doctor and other providers whether the treat­ments and services they prescribe are medically necessary and what options are available.Always check carefully the Explanation of Benefits (EOB) that you receive from your insurance company or from Medicare. Look for charges for services that you didn’t receive, treatments that were more complex than the ones you received, and multiple charges for a service that you received only once.When you buy health insurance coverage from an agent or company you’re not familiar with, contact your state’s department of insurance to verify that the company is licensed to operate in your state. Don’t buy insurance from an agent who offers you a kickback. Report these types of fraud to your state insurance department.Read the fine print in mail promotions. Report decep­tive mail promotions to your local postmaster.Don’t trust a company that wants you to pay your pre­miums in cash or pay a full year’s worth of premiums at one time.Don’t give in to “last chance” opportunities to buy a policy.Never sign a blank insurance form.Have someone you trust — perhaps a knowledgeable friend, accountant, or attorney — review any policy you’re unsure of.

Seniors may be especially vulnerable to fraud. When seniors buy Medigap policies, they sometimes fall prey to crooked salespeople who try to sell policies with too little or improper coverage or to people who don’t need coverage.