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Healthcare Facts

Dependent Eligibility Verification

Between 5 to 12 percent of covered dependents typically do not meet a plan’s definition of an “eligible dependent.”

The average cost per dependent is over $2,500 per year.

For every audited dependent there is $225 to $400 in annualized savings.

One catastrophic event concerning an ineligible dependent can cost an employer millions.

Depending on the size of the audit, the ROI ratios can reach 40 to 1.

ERISA mandates that plan sponsors manage plans for the “exclusive benefit” of participants and beneficiaries. Checking for ineligible dependents ensures your organization is meeting its fiduciary obligations

Healthcare Costs

An estimated $24 million per hour is attributed to waste, fraud, and abuse in the U.S. healthcare system.

Healthcare costs continue to escalate – now at 15% or more per year.

The annual cost of medical errors is $37.6 billion or about $4.3 million per hour.

-- Agency for Healthcare Research and Quality

The annual price tag for financial errors in healthcare is $108 billion or about $12.3 million per hour.

-- Centers for Medicare and Medicaid Services

Healthcare fraud cost $83 billion per year – about $9.4 million per hour.

-- National Center for Policy Analysis and BCBS

Two of every three dollars federal authorities recovered from frauds against the government come from health care fraud. - $1.6 billion.

-- The Justice Department

Employer and employee healthcare costs have increased 131% in the last ten years

Your organization is overpaying for healthcare. The U.S. has made $1.4 trillion in overpayments over the last 12 years.

Prescription drugs cost around 50% more in the U.S. than in other industrialized countries.

Inefficient claims processing costs over $200 billion per year.

The per employee cost of healthcare is projected to reach $28,350 by 2019, nearly 3 times the cost in 2009.

In one audit, a large company discovered they paid for a multi-million dollar replacement surgery for a defective heart valve. They later learned the manufacturing company was footing the bill.

More than 1.4 million people have been victimized by medical identity theft. On average, victims (including employers) pay approximately $20,000 each to resolve their cases.

Healthcare Fraud

In 2007, ten individuals, including four doctors, were indicted in a scheme to defraud patients and insurance companies in connection with allergy testing and shots.

In 2006, Healthcare fraud accounted for $2.75 billion of the $3.1 billion collected in fraud settlements and 58 of the 96 major fraud cases that year.

-- U.S. Attorney’s Office

In 2006, a doctor and his wife were indicted for diverting over $500,000 in employee benefit plan assets from Maryland School Districts and other businesses.

In 2006, an attorney and TPA owner were ordered to jointly make restitution of $24,678,000 from an employee benefit plan fraud scheme.

In 2005, Rent-A-Patient Scam artists targeted and recruited insured employees from over 44 states to divert over $500 million dollars from employer sponsored plans over a 24 month period.

A 2004 report indicated that organized crime was diverting money from legitimate providers by targeting employer benefit plan dollars.

-- Office of Inspector General, U.S. Department of Labor

In 2003, an insurance company paid a settlement of $470 million with more than 700,000 doctors who claimed in a class-action lawsuit that insurers inappropriately cut payments to them and interfered with their recommended treatment for patients.

Healthcare Provider Costs

33% of medical records reviewed failed to demonstrate that the patient’s stay/service was medically necessary.

The RAC program recovered $1.93 billion dollars back from hospitals in Florida, California, and New York

RAC auditors are paid on contingency.

RAC auditors can and are contracting with private insurance companies to initiate medical necessity audits and general provider audits on behalf of private insurance companies

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