With the billions of dollars lost by the insurance industry (according to themselves) from fraud, and with the creation of new tools, departments, methods all using consumer money to fight fraud, it’s startling that the insurance industry does not reward consumers for reporting fraud. After all, consumers are on the front lines.
Instead, we’re encouraged/threatened that fraud raises everyone’s rates. It is argued here that both recent federal scandals, and the endless expansion of rules imposed on consumers based on claims that insurers have to figure out ways to “pay for Obamacare” warrants serious consideration of mobilizing consumers as paid contractors to help insurers who have miserably failed at identifying and going after fraud.
This thought occurred to me, about the old-fashioned system we currently have when I read on April 24, 2013 on the HHS.gov site that “HHS would increase rewards for reporting fraud to nearly $10 million.”
The proposed change does NOT ease criteria that must be met for reporting fraud as described in Medicare.gov, “Reporting Fraud.” It does NOT change the fact the government only pays if prosecution leads to recovery. It does NOT detail what the meager reward of UP TO $1,000 or 10 percent of what is recovered from perpetrators WHICHEVER IS LESS would theoretically be raised to. As silly and meaningless as the reward is from the government, it is NONEXISTENT from private insurers.
Whether one examines the costs and benefits of government prosecutions for fraud to date, which are abysmal, many times costing the government more in dollars laid out for the prosecution than in dollars recovered, or the glaring LACK OF a reward program from private insurers for reports of insurance fraud, it comes down to the fact that consumers are expected to be penalized twice, once in the costs that all insurers acknowledge are passed onto consumers and once in the expectation that consumers will work for insurers essentially for free by identifying, documenting, verifying and presenting a completed case for insurers about alleged incidents of fraud.
When it comes to using our money, neither the government nor the insurance companies are fiscally responsible and when it comes to fraud because it is our money, not theirs that is used to cover the costs of fraud.
Failing to implement a reward system that pays consumers for their time spent gathering data as contracted workers and using the “reward” payments for prosecutions that succeed as additional monies in those cases where insurers win a case, ignores not only the failure of the current system whereby government employees and insurance companies search out “fraud” but the advantage that would be achieved by the boots-on-the-ground manpower available to insurers by insureds.
With the end of lifetime limits, in spite of the lukewarm modifications proposed by HHS, the problem of consumer reporting not being worth it to consumers is increased since no one will have to worry that fraudulent payments contribute to a lifetime maximum.
As it stands, taking the time and effort to compile the evidence required to make an allegation of fraud is NOT worth it to consumers, in spite of the rah, rah, feel good about your citizenship award. However, if you do read over your statements, consider whether you were charged co-payments, co-insurance or even expected to lay out deductible dollars for fraudulent billing. If so, it is worth your time to call and argue with your insurance company. It may also be worth your time to alert your state’s insurance department if the problem happens more than once, simultaneously with notifying your insurance company.
