Healthcare Fraud: Auditing and Detection Guide, 2nd Edition

The Payer

Who Is the Payer?

The payer is literally the one that pays the bill. An interesting quote appeared in a 1919 publication from the Insurance Monitor in response to the idea of health insurance:

the opportunities for fraud [in health insurance] upset all statistical calculations … Health and sickness are vague terms open to endless construction. Death is clearly defined, but to say what shall constitute such loss of health as will justify insurance compensation is no easy task. (July 1919, vol. 67(7), p. 38)

Imagine the insight looking back from 2007. The payer in the P-HCC is important to understand in terms of its history and its contribution toward the fragmentation in the market today.

With respect to the provision of health insurance, our history timetable takes us to Germany, which in 1883 initiated its compulsory nationalized health insurance program. Many other European countries followed suit. Compulsory nationalized health insurance was attempted in the early part of U.S. history, but it was never successfully passed.

The early part of the 1900s had progressive improvement in the delivery of medicine and treatment of patients. Along with this came increasing demand and costs associated with healthcare services. In 1929, a group of Dallas teachers contracted with Baylor University Hospital to provide 21 days of hospitalization a year for a fixed fee of $6. This model eventually set the stage for health insurance programs in the United States. BlueCross BlueShield ...