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Quality Health Plan (QHP)

Scenario

Quality Health Plan (QHP) is a health insurance company operating in the Northeastern United States. A team of investigators was tasked to analyze claims submitted by health care providers to the insurance company and report unusual patterns or incidence of fraud. The investigators found many instances in which policy holders listed their married children under their insurance policy. The policy stated that policy holders could list only unmarried children under age 18 or between ages 18 and 22 if they are in college. Additionally, investigators found that heart monitoring tests performed by a particular lab cost QHP an average of $2,000 more than those of other labs. There have been reports that employees were sharing passwords and were heard discussing confidential patient information. In other findings, $500,000 worth of claims relating to male medical procedures was submitted on behalf of females. Further, the investigators discovered many claims submitted on behalf of patients who were not members of the plan. A whistle-blower had hinted that the head of the internal control department owned part of a major lab in the area. QHP did not follow up. QHP had already settled all the invalid claims in compliance with the 90-day payment agreement.

Write a memo to the CEO of QHP, Jim Hester, explaining the actual and possible losses to the health plan. What internal control measures will you recommend to QHP?

Include the following:

Control policies
Control activities
Control procedures

Solution Preview

Quality Health Plan (QHP) is a health insurance company operating in the Northeastern United States. A team of investigators was tasked to analyze claims submitted by health care providers to the insurance company and report unusual patterns or incidence of fraud. The investigators found many instances in which policy holders listed their married children under their insurance policy. The ...

Solution Summary

Quality Health Plan (QHP) is a health insurance company operating in the Northeastern United States. A team of investigators was tasked to analyze claims submitted by health care providers to the insurance company and report unusual patterns or incidence of fraud. The investigators found many instances in which policy holders listed their married children under their insurance policy. The policy stated that policy holders could list only unmarried children under age 18 or between ages 18 and 22 if they are in college. Additionally, investigators found that heart monitoring tests performed by a particular lab cost QHP an average of $2,000 more than those of other labs. There have been reports that employees were sharing passwords and were heard discussing confidential patient information. In other findings, $500,000 worth of claims relating to male medical procedures was submitted on behalf of females. Further, the investigators discovered many claims submitted on behalf of patients who were not members of the plan. A whistle-blower had hinted that the head of the internal control department owned part of a major lab in the area. QHP did not follow up. QHP had already settled all the invalid claims in compliance with the 90-day payment agreement.

Write a memo to the CEO of QHP, Jim Hester, explaining the actual and possible losses to the health plan. What internal control measures will you recommend to QHP?

Include the following:

Control policies
Control activities
Control procedures

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