Happy accident frauds are emergent frauds — nobody needs to plan them. Don’t put your Disability Claims office on the fifth floor of a building with a faulty elevator to defraud anyone, just do it for the cheap rent. Then save costs by replacing your customer support staff with an automated call management system.
The insurance industry is great at emergent frauds enabled by complexity and powered by perverse incentives. It’s baked into their business model; any player who doesn’t cheat will go bankrupt.
So it’s not surprising that health insurers competing in public marketplaces have produced inaccurate physician directories. It’s not limited to public ACA style coverage, we get our Minnesota health care through an employer plan, and after we chose Aetna we discovered their oral surgery listings were fictional. They seemed to have many providers available in our area, but all the ones we called said the listing was wrong.
Why pay the costs to maintain an accurate listing when an inaccurate listing gets you customers who can’t actually make claims?
The good news is that the Obama administration is now starting to address the problem. Alas, the fines are likely to be pathetically small, we’ll need class action litigation to really change things or find ways to drive the worst offenders out of business by failure of ‘network adequacy’. (emphases mine, note the related problem of prince concealment in the industry, another part of a fundamentally murky business)
The White House is moving to address two of the most common consumer complaints about the sale of health insurance under the Affordable Care Act: that doctor directories are inaccurate, and that patients are hit with unexpected bills for costs not covered by insurance.
Federal health officials said this week that they would require insurers to update and correct “provider directories” at least once a month, with financial penalties for insurers that failed to do so. In addition, they hope to provide an “out-of-pocket cost calculator” to estimate the total annual cost under a given health insurance plan. The calculator would take account of premiums, subsidies, co-payments, deductibles and other out-of-pocket costs, as well as a person’s age and medical needs.
Since insurers began selling coverage through public marketplaces 19 months ago, many consumers and doctors have complained that the physician directories are full of inaccuracies. “These directories are almost out of date as soon as they are printed,” said Kevin J. Counihan, the chief executive of the federal insurance marketplace.
Medicare and Medicaid officials have found similar problems in the directories of insurance companies that manage care for beneficiaries of those programs. In December, federal investigators said that more than a third of doctors listed as participating in Medicaid plans could not be found at the locations listed.
The new standards significantly strengthen an earlier rule, which required insurers to publish directories online and to make paper copies available on request. In the federal exchange, violations are subject to civil penalties of up to $100 a day [ed: 0.000001% of revenue?] for each person adversely affected.
Federal officials said that inaccurate provider directories could be a sign of larger problems. If doctors listed in a directory are not available or are not taking new patients, consumers may not have access to covered services, and the insurers may not meet federal standards for “network adequacy,” the officials said. Consumers must often pay extra when they use doctors outside the network of their health plan, so an inaccurate directory could also lead to higher costs for patients.
… Aetna says that data in its directory is “subject to change at any time.” UnitedHealth tells Medicare beneficiaries, “A doctor listed in the directory when you enroll in a plan may not be available when your benefits become effective.” …
- Emergence: how entropy and incentives create scams: 2009, Aetna’s FSA management - just make it hard to process a claim
- Mobile phone fraud - The accidental data charge and other scams: 11/2009. A lot of these scams have gone away during the Obama administration, thanks to more competition between carriers and a lot of regulatory action. Government can work.
- Emergence: how entropy and incentives create scams 2/2009.
- Emergent fraud: Anthem and automatic payment denials 9/2010
- Anthem - Putting the Hell in Health Insurance 8/2010
- Health insurance: we’re defeated by a complexity attack 11/2009
- Employment benefit complexity: we are sheep 11/2007
- The hidden insurance problem: they can play the game better than we can 11/2007