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  • Fraud and Abuse > Fraud and Abuse Overview

    Unscrupulous medical professionals, small-time criminals and even members of organized crime siphon as much as $100 billion a year from the nation's health care system. Although fewer than five percent of practitioners in the U.S. commit such violations, health care fraud remains a powerful contributor to the skyrocketing cost of medical care. Federal lawmakers have passed numerous important acts, including The Balanced Budget Act of 1997 and the Health Insurance Portability and Accountability Act of 1996, to address issues of fraud and abuse.

    EmblemHealth's Special Investigations Unit (SIU) was established to meet regulatory requirements while addressing concerns about the cost of fraud and abuse to members and practitioners. The SIU monitors, reviews and investigates potential cases involving fraud, abuse or improper billing. Additionally, the SIU ensures proper payment has been requested and reimbursed. Our SIU respects the partnership we have with our network providers and works with our providers to curb fraud and abuse.

    We ask each of our medical professionals to be a part of our fraud fighting team by working together to prevent and identify inappropriate and potentially fraudulent billings through the following procedures:

    • Monitoring of claims submitted for compliance with billing and CPT coding guidelines
    • Adherence by providers and facilities to Standard Medical Record Guidelines
    • Education of all staff members responsible for dealing with medical records and/or billings
    • Referral of suspected fraud and abuse cases to EmblemHealth's Special Investigations Unit

    The SIU conducts audits by any of the following methods:

    • Data analysis of filed claims
    • Review of medical records and filed claims
    • On-site visits

    If improper or fraudulent billings are identified, the SIU will send written documentation to the provider outlining its findings. If and when necessary, the SIU will hold meetings to address providers' concerns and arrange repayment of amounts paid on identified fraudulent claims.

    Fraud is defined as obtaining, or attempting to obtain, services or payments by dishonest means with knowledge, willingness or intent. The Federal False Claims Act (accessed at widens the definition to also include reckless conduct, "deliberate ignorance" of the truth or falsification of information, and "reckless disregard" of the truth or falsity of the information.

    Examples of Fraud

    • False or fabricated filings of claims.
    • Billing for goods and services that were never delivered or rendered. This includes billing for no shows or cancelled appointments.
    • Billing for more services than were actually provided. This includes, but is not limited to, billing for new or premium durable medical equipment, prosthetics/orthotics or supplies while substituting substandard or inexpensive DME.
    • Billing at doctor rates for work that was actually conducted by a nurse, resident intern or physician assistant (i.e., up-coding), unless permitted by your contract agreement, state laws and regulations, and/or CMS guidelines.
    • Billing for services performed by a lesser-qualified person, unless permitted by your contract agreement, state laws and regulations, and/or CMS guidelines.
    • Billing for services under a provider's name for services actually rendered by another provider.
    • Misrepresentation of services rendered (CPT codes), diagnosis, place of services, date of services and/or providers of services in order to justify reimbursement.
    • Billing for non-covered services as covered services.
    • Medical documentation that does not support, or is inconsistent with, the service being billed.
    • Falsifying certificates of medical necessity, plans of treatment and medical records to justify payment. This includes fabrication and recreation of medical records to justify the billing and payment.
    • Double billing in an attempt to gain duplicate payment (i.e., billing multiple claims to EmblemHealth and/or another insurer without proper disclosure of any COB or payment information, or EOB from another carrier).
    • Altering of claim form to obtain higher payment amount.
    • Billing separately for a panel of tests when a single panel test was requested (i.e., unbundling).
    • Billing procedures over a period of days or weeks when the actual treatment occurred during a single visit (i.e., split billing).
    • Improper coding practices (misuse of CPT codes).
    • The acceptance of, or failure to return, monies paid on claims known to be false, fabricated or received in error.
    • Kickbacks or participating in schemes that involve collusion between a provider and a member.
    • Members providing false information for potential gain.
    • Billing a planned hospital admission service as if it were an emergency admission and/or urgent care admission.

    Abuse or improper billing is defined as any provider or member practice that is inconsistent with sound or established fiscal, business, insurance or medical practices and results in an unnecessary cost to any EmblemHealth benefit program, including, but not limited to, reimbursement for services that are not medically necessary or treatments that fail to meet professionally recognized standards. Each incident need not be intentional to be considered abuse. Consistent patterns of abuse may be indicative of fraud.

    Examples of Abuse or Improper Billing

    • Inappropriate balance billing
    • Inadequate resolution of overpayment
    • Failure to collect deductibles, coinsurances and copays
    • High utilization of procedures or tests that are not medically necessary
    • Providing services that are experimental or services that do not meet professionally recognized standards
    • Coding a service at a higher level than warranted (i.e., up-coding)
    • Inappropriate documentation of services rendered
    • Unbundling of services or charges
    • Requesting prior approval under a network location and billing under an out-of-network location

    An entity performing such acts may include a provider, a hospital, an agency, an organization, another institutional provider, an employee or employees of a provider or group of providers, a billing service, a member or any person in a position to file a claim for health benefits.

    To report suspicious activity, please contact EmblemHealth's Special Investigations Unit in one of the following ways:

    • E-mail:
    • Toll-free hotline: 1-888-4KO-FRAUD (1-888-456-3728)
    • Mail:
      Attention: Special Investigations Unit
      441 Ninth Avenue
      New York, NY 10001

    A trained investigator will discuss the nature of the concern. The informant may remain anonymous.

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    Glossary terms found on this page:

    Formal acceptance as an inpatient by an institution, hospital or health care facility.

    Billing a member or other responsible party for the difference between the insurer's payment and the actual charge.

    Any HMO (with or without primary care provider referral requirements), Point of Service, Medicaid, Family Health Plus, Child Health Plus, Medicare Advantage or Medicaid Advantage health plans, ASO or any other line of business offered by the EmblemHealth plans.

    Services available to a member as defined in his or her contract. Benefit design includes the types of benefits offered, limits (e.g., number of visits, percentage paid or dollar maximums applied) and subscriber responsibility (cost sharing components).

    An insurance company that either administers insurance or self-insures.

    An itemized statement of health care services and their costs provided by a hospital, physician's office or other health care facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.

    An application for payment of benefits under a health care plan.

    The government agency responsible for administering the Medicare and Medicaid programs.

    When a member is covered by more than one benefit plan, with both providing similar benefits, EmblemHealth coordinates with the other carrier to ensure appropriate reimbursement. Also called Coordination of Benefits.

    A percentage of the allowed charge that is payable by the member, not EmblemHealth, for covered services rendered by an out-of-network provider. After the member has met his or her deductible, EmblemHealth will pay a percentage of the allowed charge for those covered services in accordance with the member's benefit program. The member is responsible to pay the remaining percentage of the allowed charge. This remaining percentage is the coinsurance charge.

    A legal agreement between an individual member or an employer group and a health plan that describes the benefits and limitations of the coverage.

    The fixed dollar amount members must pay for certain covered services. It is generally paid to a network provider at the time the service is rendered.

    A medically necessary service for which a member is entitled to receive partial or complete coverage under the terms and conditions of the benefit program, is within the scope of the practitioner's practice and the practitioner is authorized to render pursuant to the terms of the agreement.

    The date on which a service was rendered.

    A portion of eligible expenses that an individual or family must pay during a calendar year before EmblemHealth will begin to pay benefits for covered services.

    Medical equipment, goods, implements and prosthetics that are prescribed for patient care, usually in an outpatient setting. Examples of such equipment include hospital beds, wheelchairs and walkers.

    Medical equipment, goods, implements and prosthetics that are prescribed for patient care, usually in an outpatient setting. Examples of such equipment include hospital beds, wheelchairs and walkers.

    Means a medical or behavioral condition, the onset of which is sudden, that manifests itself by symptoms of sufficient severity, including severe pain, that a prudent layperson, possessing an average knowledge of medicine and health, could reasonably expect the absence of immediate medical attention to result in (a) placing the health of the person afflicted with such condition in serious jeopardy, or in the case of a behavioral condition, placing the health of such person or others in serious jeopardy; (b) serious impairment to such person’s bodily functions; (c) serious dysfunction of any bodily organ or part of such person; or (d) serious disfigurement of such person.

    A form sent to the enrollee after a claim for payment has been processed by the health plan. The form explains the action taken on that claim. This explanation usually includes the amount paid, the benefits available, reasons for denying payment and the claims appeal process. Also called Explanation of Benefits.

    A health care benefit arrangement that is similar to a preferred provider organization in administration, structure and operation but does not cover out-of-network care. Also called an Exclusive Provider Organization.

    A federal act that protects people who change jobs, are self-employed or have pre-existing medical conditions. The act standardizes an approach to the continuation of health care benefits for individuals and members of small group health plans and establishes parity between the benefits extended to these individuals and those offered to employees in large group plans. The act also contains provisions to ensure that prospective or current enrollees in a group health plan are not discriminated against based on health status and protects the confidentiality of protected health information of members. Also known as HIPAA.

    An institution which provides inpatient services under the supervision of a physician, and meets the following requirements:

    • Provides diagnostic and therapeutic services for medical diagnosis, treatment and care of injured and sick persons and has, as a minimum, laboratory and radiology services and organized departments of medicine and surgery
    • Has an organized medical staff which may include, in addition to doctors of medicine, doctors of osteopathy and dentistry
    • Has bylaws, rules and regulations pertaining to standards of medical care and service rendered by its medical staff
    • Maintains medical records for all patients
    • Has a requirement that every patient be under the care of a member of the medical staff
    • Provides 24-hour patient services
    • Has in effect agreements with a home health agency for referral and transfer of patients to home health agency care when such service is appropriate to meet the patient's requirements

    An organization comprised of individual physicians or physicians in group practices that contracts with the managed care organization on behalf of its member physicians to provide health care services. Also called an Independent Practice Association.

    Acronym for Medicare Advantage. An alternative to the traditional Medicare program in which private plans run by health insurance companies provide health care benefits that eligible beneficiaries would otherwise receive directly from the Medicare program.

    Professional services rendered by a physician for the treatment or diagnosis of an illness or injury.

    Health care that is rendered by a hospital or a licensed or certified provider and is determined by EmblemHealth to meet all of the criteria listed below:

    • It is provided for the diagnosis or direct care or treatment of the condition, illness, disease, injury or ailment.
    • It is consistent with the symptoms or proper diagnosis and treatment of the medical condition, disease, injury or ailment.
    • It is in accordance with accepted standards of good medical practice in the community.
    • It is furnished in a setting commensurate with the member's medical needs and condition.
    • It cannot be omitted under the standards referenced above.
    • It is not in excess of the care indicated by generally accepted standards of good medical practice in the community.
    • It is not furnished primarily for the convenience of the member, the member's family or the provider.
    • In the case of a hospitalization, the care cannot be rendered safely or adequately on an outpatient basis or in a less intensive treatment setting and, therefore, requires the member receive acute care as a bed patient.

    The fact that a provider has prescribed a service or supplies care does not automatically mean the service or supply will qualify for reimbursement under the EmblemHealth plan. To be eligible for reimbursement by EmblemHealth, all covered services must meet EmblemHealth's medical necessity criteria, described above.

    Medically necessary with respect to Medicaid and Family Health Plus members means health care and services that are necessary to prevent, diagnose, manage or treat conditions that cause acute suffering, endanger life, result in illness or infirmity, interfere with a person's capacity for normal activity or threaten some significant handicap.

    An individual and each of his or her eligible dependents, including Medicare beneficiaries who are enrolled or participate in a benefit program and who are entitled to receive covered services from the practitioner pursuant to such benefit program and the terms of the practitioner's agreement.

    The group of physicians, hospital, and other medical care providers that a specific plan has contracted with to deliver medical services to its members.

    A physician, hospital or other provider who has signed an agreement to covered services to EmblemHealth plan members. A network provider is a member of the EmblemHealth network of network providers applicable to the member's certificate. Therefore, they are sometimes referred to as participating providers. Payment is made directly to a network provider. Please consult the EmblemHealth Directory or go online to search for network providers.

    The use of health care providers who have not contracted with the health plan to provide services. Depending on the member's contract, out-of-network services may not be covered.

    A type of health benefit plan that allows enrollees to go outside the health plan's provider network for care, but requires enrollees to pay higher out-of-pocket fees when they do. Also called Point of Service.

    A health plan that offers benefits in-network and out-of-network. In-network services are available to enrollees at lower out-of-pocket cost than the services of non-network providers. In addition, PPO enrollees may self-refer to any network provider at any time. Also called a Preferred Provider Organization.

    A prepaid payment or series of payments made to a health plan by purchasers and often plan members for health insurance coverage.

    The process of obtaining advanced approval of coverage for a health care service or medication. The request for services is reviewed to assess medical necessity and appropriateness of elective hospital admissions and non-emergency outpatient services before the services are provided. Also called pre-authorization or pre-certification or pre-determination.

    A medical practitioner or covered facility recognized by EmblemHealth for reimbursement purposes. A provider may be any of the following, subject to the conditions listed in this paragraph:

    • Doctor of medicine
    • Doctor of osteopathy
    • Dentist
    • Chiropractor
    • Doctor of podiatric medicine
    • Physical therapist
    • Nurse midwife
    • Certified and registered psychologist
    • Certified and qualified social worker
    • Optometrist
    • Nurse anesthetist
    • Speech-language pathologist
    • Audiologist
    • Clinical laboratory
    • Screening center
    • General hospital
    • Any other type of practitioner or facility specifically listed in the member's Certificate of Insurance as a practitioner or facility recognized by EmblemHealth for reimbursement purposes

    A provider must be licensed or certified to render the covered service. The covered service must be within the scope of the Provider's license or certification.

    A recommendation by a physician that an enrollee receive care from a specialty physician or facility.

    Services received for an unexpected illness or injury that is not life threatening but requires immediate outpatient medical care that cannot be postponed. An urgent situation requires prompt medical attention to avoid complications and unnecessary suffering or severe pain, such as a high fever.


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