Jeff Horwich: Later today, the Obama administration will announce a new initiative against health care fraud. They’re trying something new this time: Teaming up with private insurers. Marketplace’s Nancy Marshall-Genzer joins us now live, from Washington. Good morning, Nancy.
Nancy Marshall-Genzer: Good morning, Jeff.
Horwich: Nancy, what do you know about what the administration is going to do?
Marshall-Genzer: Jeff, the headline here is that the administration is going to work with insurance companies to ferret out fraud. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius are spearheading this. And their plan is for federal investigators and private insurers to look at claims data for Medicare, Medicaid and private insurance. This is a rare instance where the government and private sector are working together.
Horwich: And what types of fraud will they be looking for?
Marshall-Genzer: They’re looking for patterns. For example, if a doctor billed for more than 24 hours in a day. I talked with Vivian Ho about this. She’s a healthcare economist at Rice University. She says investigators also compare healthcare providers in a given area.
Vivian Ho: So if there is one particular provider that’s providing a much higher rate of expensive diagnostic tests, say 400 or 500 percent more of those diagnostic tests than other providers in the area, then that’s a signal that there’s something suspicious going on.
Horwich: How big a problem is fraud?
Marshall-Genzer: Ho says the Center for Medicare and Medicaid services estimates that as much as $70 billion of the claims it pays out every year are fraudulent. Ho also says, for every dollar the government spends investigating fraud it gets $17 back.