The U.S. Department of Justice has charged six former National Football League (NFL) players with filing $3.9 million in fraudulent health-care claims, according to
Infosecurity Magazine. Prosecutors say the retired players submitted out-of-pocket medical expense claims for expensive medical equipment they never purchased.
The alleged fraudulent claims — some using forged prescriptions, invoices, and medical orders — were filed between June 2017 and December 2018. Moreover, some of the former players allegedly received kickbacks for recruiting other players into the scheme. Seven other retired players, who were indicted in December as part of the same alleged conspiracy, have pleaded guilty to making fraudulent claims.
There are both lessons to learn and actions to take from this fraud case — not only by all professional sports organizations, but also health insurance providers. These lessons are all the more important in the context of the COVID-19 pandemic and its consequences for the economy and public health.
The NFL alone has more than 20,000 retired players. Many of them, but not all, qualify for the Gene Upshaw NFL Player Health Reimbursement Plan. The league's plan provides up to $350,000 in benefits, and many retired players covered by it have medical conditions. Most former players lawfully rely on the plan's benefits; they are the real victims of this alleged fraud.
At its root, this case involves allegations of conspiracy, wire and health-care fraud, and a dose of a pyramid scheme. So what can internal auditors and health insurance providers learn from this case that can help prevent and detect future reimbursement frauds?
The main message is that health insurance providers need to continuously expand and improve their ability to detect potential fraud, including through the use of technology and data analytics, backed by monitoring and audits. Beyond that, here are three specific strategies:
Monitor for suspicious transactions. The retired NFL players in this case allegedly used methods similar to those in other health-care fraud cases to deceive the insurance provider. These methods included submitting fabricated supporting documents such as false signatures on faked official letterhead with the names of real doctors.
The alleged claims frequently involved medical equipment such as hyperbaric oxygen chambers, cryotherapy machines, ultrasound machines, and electromagnetic therapy devices (designed for use on horses), costing as much as $50,000. These kinds of transactions should automatically receive additional scrutiny, including by using data analytics to detect repeating and irregular activity patterns from the same individuals. Internal auditors also should perform spot checks with equipment providers and physicians to verify the authenticity of purchases.
Verify providers. Health insurers should digitally store verified original signatures of equipment providers' staff physicians and compare them electronically for anomalies when especially large dollar reimbursement amounts are requested.
Implement electronic account controls. Insurers should use account-control mechanisms, including two-step verification and voice recognition-based account access. The individuals in this case allegedly dialed the telephone number provided on the reimbursement form and impersonated conspiring players to check the status of fraudulent claims and encourage payment as soon as possible. Phone calls to health-care companies should be recorded and monitored, as well.