Tackling fraud in the Caribbean

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Cost Containment Review | June 2019

Both the Caribbean and Mexico are seeing steady increases in the number of tourist arrivals, but for insurers and assistance companies, the regions still seem to have issues with medical-related fraud and inflated billing. How best to combat these problems and keep costs at a manageable level? Christian Northwood looks into the situation

Travel to both the Caribbean and Mexico has been steadily increasing over the last few decades, with the usual combination of more adventurous travellers and cheaper air travel meaning more are making the leap. According to the Caribbean Tourism Organization (CTO), the region brought in over 30 million tourist visits for the first time in 2017, despite a series of devastating hurricanes – good news for the nearly 25 per cent of the economy that depends on the money tourism brings into the area, according to the World Travel and Tourism Council. Mexico is also enjoying increasing numbers of tourist arrivals. It became the sixth-most-visited destination in the world in 2017 and began 2018 strongly, drawing 10.6 million tourists – the highest it has ever welcomed in the first quarter of a year.
With both countries still very much developing economically and infrastructurally, medical care can vary, as can prices for treatment. So, what issues are insurers and assistance companies facing?
 
To TPA or not to TPA?
“The biggest challenge in this area as we all know is overtreatment and overcharging,” Federico Tarling, Chief Service Officer for international assistance company Assist Card, asserts. “Unless you are able to steer your clients to your contracted suppliers, you will always have doubts on whether the medical treatment supposedly received by your clients was necessary. Definitely, they will be more costly than what we would have spent with a contracted supplier.” 
A lack of information on the ground can lead to inflated bills, and where companies can’t afford to carry out the due diligence themselves, third-party administrators (TPAs) often step in. Soraia Arroyo Lynch, Vice-President Marketing and Networks at GMMI, points to TPAs as one of GMMI’s ‘special concerns’ in the region.
 
Look for an intermediary that needs to contain costs as much as you
 
However, TPAs are useful for many, helping companies to overcome the challenges associated witha lack of deep local knowledge. Global Excel, where Jorge Rodriguez works as Director of Healthcare Risk Management for Latin America, ‘has members on the ground that have intimate knowledge of local healthcare systems’ in the Mexican-Caribbean region – but problem solving on a local level throws up challenges, such as: “Obtaining accurate medical and financial information to evaluate the case properly in order to elaborate an authorisation letter request to our corporate clients; acceptance of our guarantee letters when the healthcare facility is an out of-network facility; obtaining a fit-to-fly document when a patient needs to be evacuated; patient classification systems that can lead to international classification, driven by pricing considerations; and a lack of internationally and regionally certified medical facilities.”
Steering customers can be equally problematic, though. Pablo Castillo, CEO of MedBrick, says that, on top of the issues the company deals with when finding specific information and details on the case that it is handling, making sure injured customers go to reputable facilities in Mexico and the Caribbean can cause real problems. “Many times, unnecessary third parties get involved in the case prior to the initial notification of the emergency by the patient (or their family),” he said. “When this happens, regular and irregular costs start to accumulate and can easily turn into an overbilled admission.”
Indeed, TPAs have to be carefully chosen, as not all are reputable. Tarling says that his company never works with TPAs anymore, having encountered issues with them previously. “When we had a third party involved, we found out about some cases where medical conditions were exaggerated in order to refer clients to clinics and inflate costs,” he told ITIJ. “We paid a lot of money in case handling fees.” He explains that Assist Card previously experienced TPAs that were aligned with ‘not so honest suppliers’ who overcharged for medical services that were never administered, and even taxis that were never taken. 
Lynch is also wary of some TPAs, explaining that GMMI has experience with companies that ‘inflate the price of care and re-bill on behalf of local entities’. Her company works to help ease the various issues experience in these regions, and is entrusted to deal with price negotiation, claims for services not rendered and ‘abusive collection agencies for international patients’. For assistance and insurance companies without the reach to properly deal with these issues, costs can spiral. 
So how can companies look for intermediaries to work with in the Mexican and Caribbean regions? “If you cannot access medical suppliers directly,” says Tarling, “try not to work with intermediaries who charge based on a percentage of discounts obtained. This model presents as an incentive to inflate costs and maximise profits. Look for an intermediary that needs to contain costs as much as you.”
 
Fighting fraud
Exactly how major is the issue of fraud in the Mexican and Caribbean regions, and where in the supply chain is it coming from?
“Currently, we are seeing fraudulent activities from non-network facilities and collection agencies,”  explains Rodriguez. “In general, small facilities do not have billing departments and do not have experience with international insurance/assistance companies. Therefore, they use collection agencies, which act as factoring companies purchasing bills which are inflated in order to yield high profit. For example, we have seen bills with 250-per-cent mark-up in some cases and having a local expert does provide an advantage in a region with such conditions.”
Castillo agrees, stating that they are also seeing an increase in fraud across the regions, adding: “What used to work for most payers in the past may now be an obsolete alternative to avoid overbilling, overutilisation and ultimately fraud. Specialised companies are more necessary than ever to tackle new challenges and issues involving rising problems which cannot be overlooked.”
Both Tarling and Lynch say that they have not necessarily seen an increase in fraud in these regions, and their already existing relationships in the regions help them to avoid overbilling.
Either way, for those without a deep level of local knowledge, a trusted TPA can save time and money with its already constructed and vetted networks. 
Castillo says that one main way his company attempts to prevent fraud in Mexico and the Caribbean is by constantly educating its clients on the latest developments in the region. MedBrick has also used its experience handling cases in the region to develop its own cost database, which includes local rates in areas where fraud and overbilling is taking place. “We also have local partnerships with contacts (eyes and boots on the ground),” says Castillo, “which allows us to be very informed on questionable trends and up-to-date on how the business is changing. By being very much aware of the difference between ‘what is billed’ and ‘what should be paid’ (usual and customary), we manage to obtain important savings for our clients.”
Global Excel, Rodriguez explains, has a ‘four-pillar’ process that it utilises to help mitigate fraud in these regions. The first, he says, is a ‘robust credentialing providers process’, in which it looks for:
  •  Local health licence (valid and current).
  • Certification of local health body (for example, the Mexican General Health Council). 
  • International certifications.
  • Professional medical certificate.
  • Certification by specialty medical board.
  • The professional ethics and reputation of the health provider. 
“In some cases, an inspection visit of a facility is performed by a local co-ordinator, if they do not meet the credentialing process key factors,” he continues. “Also, in a few cases, we have seen doctors outsourcing medical procedures to other facilities that might have not been credentialed. The second ‘pillar’ utilises telemedicine, a service that Rodriguez says is key to beginning the process of cost containment. Phone consultations can lead to customers being steered to correct medical facilities, or transferred from the facility they are currently in.
The third pillar is a proactive review and is part of the wider case management strategy. As well as making a review of the itemised medical bill and the level of care given, the team assigned to a case also weighs up International Classification of Disease (ICD) versus medical procedures description, and medical protocols versus Milliman Care Guidelines.
 
The first defence against fraud is getting ahead of the customer
 
The fourth and final stage is a bill review and audit. “Bill reviews are customised to each client’s needs and performance standards,” explains Rodriguez. “Once we have reviewed bills, some are identified and are sent for further review from one our licensed doctors and administrative staff. The following are some of the points that are covered: standard billing format; coding in general (no CPTs, no ICD10); fiscal invoices to validate the legitimacy of the doctor; charges versus local costs; use of analytic tools to find suspicious patterns; and proof of payment if applicable.”
 
Keeping tabs
Clearly, knowledge is king when dealing in these areas, and with the flow of visitors not looking likely to dip to these destinations any time soon, companies need to find a way to gain as much information as they can. But it’s not just the insurers or cost containment customers that need to be in the know – it is, of course, their customers as well.
“It’s key to make your clients get in touch with their assistance companies always, when their
medical conditions allow them to do so,” says Tarling. “In that way, even if you are hospitalised in a ‘not so honest’ facility, you will have someone looking out for you.”
Castillo agrees: “Consumers should collaborate with their insurer to prevent fraud from happening. 
One good example of this collaboration is to contact the insurer or assistance company as soon as they are ready to seek medical services for any reason. By doing so, the insurer can act proactively to take control of the case in order to minimise negative situations such as the intervention of third-party billers, which often leads to overbilling, overutilisation, and possibly fraud.”
Lynch also puts forward that the first defence against fraud is getting ahead of the customer. By giving the customer an incentive to contact their insurer before they enter a facility, GMMI is able to negate extra costs: “When GMMI is aware of an imminent admission, it can proactively manage costs; it can anticipate discharge and consider repatriation out of the region both to ensure higher level of care to members, as well to manage costs.”
Tarling predicts, however, that the market is only going to get worse before it gets better: “More and more, we see medical facilities behaving as a ‘restaurant’ where patients are seen as clients and, therefore, revenues are to be maximised at every available opportunity.”
Castillo believes, though, that the issues in the region can be tackled, and that collaboration in key: “Going forward, insurance associations should act together (not each company individually) to tackle issues that currently seem to get worse every year.”Lynch is also positive about dealing with problems in the area, reconfirming that ‘the vast majority of providers are honest and collaborative with insurance, assistance or TPA companies.’