B2B contact and verification by patients may be the solution to Medicare Fraud

The 60 minutes story on Medicare fraud (September 2010) highlights a service verification problem that could be potentially tackled by B2B contact and verification.

Medicare fraudsters’ modus operandi is to  get a list of Medicare patients and just bill Medicare for fictitious supplies to patients. One preposterous example is of a retired Judge who was supposedly supplied artificial limbs (with the provider fraudulently billing Medicare ) for both his good arms in the same month !

It would be interesting to study how a medicare type operation can change its process of re-imbursement to reduce fraudulent claims to start with.  Here are three examples where the risk of fraudulent charges are much less due to personal contact and verification at the B2B level.

  • Credit Cards: Credit card companies have a two way channel. They have a deal with the merchant who has ther terminal and pays a comission for everything charged. In the rare cases of disputes consumers can dispute a particular charge fairly easily including via the Internet.Most merchants are very careful in the accuracy of charging and the control is that the credit card company can simply adjust in the next bill from the merchant.
  • Health Insurance: In health insurance there is a direct link between the doctor’s office and the insurance company regarding billing codes,rates and payments. The billing end of the provider’s organization and the claims end of the insurance company have constant contact and fairly frequent arguements ensuring that the provider does not disappear !
  • Auto Insurance: The auto claims business is also personal contact based. The claims adjuster and auto body shops know each other personally. Although autobody shops seem to bill more than original inspection estimates you can be pretty sure that because of this B2B contact between Insurance claims department,adjuster,policy holder and auto body shop- the work actually got done.

Similarly Medicare might consider a more intensive B2B contact and verification system at the provider enlistment stage. In addition,since Medicare receipients are retired with the time and willingness to verify provider supplies- why not involve them in the payment process?

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