These days, healthcare fraud in the medical industry is constantly in the headlines.
There is no question that there is fraud in the healthcare industry. The same may be said for every industry or effort that even remotely involves human interaction, such as banking, finance, insurance, politics, and so forth. The issue at hand is undoubtedly healthcare personnel who take advantage of their positions and the confidence we place in them in order to steal. Those individuals who come from different fields but perform the same function are also included.
Why does it seem that fraudulent activity in the healthcare industry gets the ‘lion’s share of attention? It is possible that it is the ideal vehicle for driving the agendas of various parties, with taxpayers, healthcare customers, and healthcare providers all playing the role of dupes in a shell game involving healthcare fraud that is run with the accuracy of a sleight-of-hand.
When one takes a closer look, one will see that this is not a game of chance. The problem with racketeering is not just the fraud itself; the problem is that our govt or insurers are using the fraud problem to even further ideologies while at the same time failing to be accountable and accepting responsibility for such a fraud problem they facilitate but also allow to flourish. This results in taxpayers, consumers, and providers always losing, and the reason for this is that the problem to health care fraud is not simply the fraud itself.
- Outrageous Cost Estimates
What more effective approach is there to reporting on fraud than to provide estimates of how much it costs?
- “The yearly cost of fraud committed against public and commercial health plans is between $72 billion and $220 billion, which drives up the cost of medical treatment and health insurance and undermines public faith in our nation’s health care system… It’s no longer a secret that one of the most rapidly expanding and financially devastating types of crime in the United States of America today is fraud… We, the taxpayers, and those who have health insurance pay for these expenditures via increased rates… We need to take the initiative to prevent fraud and abuse in the healthcare system… We also have a responsibility to make certain that law enforcement has the resources necessary to prevent, identify, and prosecute health care fraud.” [Press release from Senator Ted Kaufman, Democrat of Delaware, dated October 28, 2009]
According to projections made by the General Accounting Office (GAO), the amount of money lost due to fraudulent activity in the healthcare industry totals anywhere from 3% to 10% of the total budget for healthcare, which totals $2 trillion. [article from Health Care Finance News, dated October 2, 2009] The General Accounting Office (GAO) serves as the enforcement arm of Congress.
According to the National Health Care Anti-Fraud Association (NHCAA), over $54 billion is stolen annually in scams crafted to stick us as well as our insurance companies with fraudulent but also illegal medical charges. These scams are carried out in an effort to stick us with the costs of these illegal medical procedures. [NHCAA, website] Health insurance companies are responsible for the establishment of NHCAA as well as its funding.
Unfortunately, the credibility of the allegedly accurate projections is, at best, questionable. There is a considerable variety in the kind, quality, and the number of data that is gathered due to the fact that insurers, state and federal authorities, and other organizations may collect fraud data linked to their own goals. David Hyman, a professor of law at the University of Maryland, tells that the widely-disseminated estimates of the occurrence of healthcare fraud and abuse (which are assumed to be 10% of total spending) lack any empirical foundation at all and that little that we do know regarding health care fraud and abuse is dwarfed by what we don’t know and also what we know that is not so. [The Cato Journal, from March 22nd, 2002]
- Specifications for Medical Care
The laws and regulations that regulate health care are complex, and since they are written in legalese rather than plain talk, it may be quite difficult for providers and others to grasp them. These laws and rules also differ from state to state as well as from payor to payor.
In order to record conditions treated (using the ICD-9) and treatments provided, providers utilize certain codes (CPT-4 and HCPCS). When requesting reimbursement from payors of services provided to patients, these codes are entered into the appropriate fields. In spite of the fact that they were designed to be universally applicable and to facilitate accurate reporting in order to accurately reflect providers’ services, many insurance companies instruct providers to report codes based on what the insurer’s software editing programs recognize, rather than based on what the provider actually rendered. In addition, practice-building consultants educate providers on what codes to record in order to be paid. In certain instances, the codes that are instructed to be reported do not adequately represent the service that is being provided by the provider.
Consumers are aware of the services rendered to them by their physician or another provider; but, they may be clueless about the significance of the billing codes or service descriptors that appear on the explanation of benefits they get from insurers. Because of this misunderstanding, some customers may believe they were overcharged while others may believe that they were billed incorrectly and go on without ever obtaining clarity on the meaning of the codes. When services are denied due to non-coverage, the multitude of insurance plans that are available today, each with varying levels of coverage, adds a wild card to the equation. This is especially true when Medicare is the entity that identifies non-covered services as being unnecessary from a medical standpoint.
- Taking preventative measures to combat the issue of fraud in the healthcare system
The government & insurers do little to aggressively address the issue by engaging in real actions that will result in the detection of incorrect claims prior to their being paid out. In point of fact, payors of health care claims simply declare to operate a payment system that is based on trust that providers will accurately bill for services rendered. This is due to the fact that they are unable to review each claim prior to payment being made because doing so would cause the reimbursement system to fail.
They assert that they use sophisticated computer programs to search for errors and patterns in claims, that they have increased pre- and after-payment audits of selected providers to detect fraud, and that they have created consortiums and task forces comprised of law enforcers or insurance investigators to investigate the issue and share information regarding fraud. However, the vast majority of this activity is concerned with activities that take place after the claim has been paid, and as a result, it has very little influence on the identification of fraud in a proactive manner.
- Create new legislation to combat fraudulent activity in the healthcare industry.
The government’s reports on the problem of fraud are published in earnest in conjunction with efforts to reform our healthcare system. Our experience shows us that this ultimately results in the government introducing and enacting new laws – presuming that new laws will result in more fraud being detected, investigated, and prosecuted – without establishing how new laws will accomplish this more effectively than existing laws that were not used to their full potential. This is because the government believes that new laws will result in more fraud being detected, investigated, and
The Health Care Portability and Accountability Act was enacted as a result of such efforts in the year 1996. (HIPAA). The legislation was passed by Congress with the goals of addressing health care fraud and abuse, portability of health insurance, and responsibility for patient privacy. The purpose of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was ostensible to provide federal law enforcers and prosecutors with the resources necessary to combat fraud. As a consequence, a number of new healthcare fraud statutes were enacted as a direct result of HIPAA, including Health Care Fraud, Theft or Embezzlement through Health Care, Obstructing Criminal Investigation of Health Care, and False Statements Relating to Health Care.
The Health Care Fraud Enforcement Act was passed into law in 2009. It took effect in 2009. This act was just recently introduced by Congress with the promise that it will build on existing fraud prevention efforts and strengthen the government’s capacity to investigate and prosecute waste, fraud, and abuse in both public and private health insurance. This will be accomplished by increasing sentencing, redefining healthcare fraud offenses, improving whistleblower claims, creating a common-sense mental state requirement for healthcare fraud offenses, and increasing funding in federal antifraud spending.
Without a question, those tasked with upholding the law and prosecuting crimes are required to have the necessary equipment in order to execute their tasks efficiently. On the other hand, these activities won’t be nearly as effective at preventing future incidents of the issue if they’re taken in isolation and without the addition of other, more real, and substantial precautions to take before the claim is settled.
One person’s idea of insurance fraud (claiming that a patient received medical care that was not required) is another person’s idea of salvation (provider administering tests to defend against potential lawsuits from legal sharks). Is the potential of tort reform being considered by those who are advocating for health care reform? I’m sorry to say that that is not! On the other hand, there does not seem to be an issue with support for legislation that would place additional and onerous restrictions on providers in the name of preventing fraud.
If Congress genuinely wants to utilize its legislative powers to make a difference on the issue of fraud, then they need to look beyond the box of what has previously been done in some shape or way. This is a requirement if they want to use their legislative powers effectively. Put your attention on certain front-end activities that deal with preventing fraud from occurring in the first place. The following are some examples of measures that might be implemented as part of an attempt to put a stop to the rampant fraud and abuse that has been going on:
- MAKE IT A REQUIREMENT THAT ALL PAYORS AND PROVIDERS, SUPPLIERS, AND OTHERS ONLY USE APPROVED CODING SYSTEMS, in which the codes are unambiguously specified so that EVERYONE is aware of and comprehends what each individual code indicates. It should be against the law for anybody to record services delivered (providers, suppliers) or adjudicate claims for payment in a way that deviates from the meaning that has been stated (payors and others). Make breaking the rules a matter of absolute responsibility.
- MAKE IT A REQUIREMENT THAT ALL CLAIMS THAT ARE SUBMITTED TO INSURERS, BOTH PUBLIC AND PRIVATE, MUST HAVE THE PATIENT (OR THE APPROPRIATE REPRESENTATIVE) SIGN OR ANNOTATE IN SOME WAY THAT THEY RECEIVED THE In the event that such confirmation is lacking, the claim will not be reimbursed. In the event that it is proven in the future that the claim contains inaccuracies, investigators have the option to speak with both the patient and the provider…
- MAKE IT A REQUIREMENT THAT ALL CLAIMS-HANDLERS (especially if they have the authority to pay claims), CONSULTANTS RETAINED BY INSURANCE COMPANIES TO ASSIST IN ADJUDICATING CLAIMS, AND FRAUD INVESTIGATORS BE CERTIFIED BY A NATIONAL ACCREDITING COMPANY UNDER THE AUTHORITY OF THE GOVERNMENT TO DEMONSTRATE THAT THE If such accreditation is not achieved, then neither the employee nor the consultant will be allowed to handle a health care claim or investigate potential health care fraud. This is because none of them will have the authority to do so.
- It should not be possible for public or private payors to allege fraud on claims that have already been paid if it can be shown that the payor knew or should have known the claim was unlawful and should not have been paid. And in the instances where fraud is established in paid claims, any monies collected from providers and suppliers for overpayments should be deposited into a national account to fund various fraudulent and abusive practices and education programs for consumers, insurers, law enforcers, prosecutors, legislators, and others; fund front-line investigators for state health care regulatory panels to investigate fraud in their respective jurisdictions; and fund other health care related activity.
- It should be illegal for insurance companies to raise consumers’ rates based on their own assessments of the frequency with which fraud occurs. Insurers should be required to provide a factual foundation for supposed losses that may be attributable to fraud, as well as give concrete evidence of their attempts to identify and investigate fraud, and they should also be prohibited from paying bogus claims.
- Fraud in the healthcare industry causes losses for insurance companies
As part of their normal course of business, insurers will often position themselves as victims of fraud perpetrated by dishonest providers and suppliers by offering reports on fraud.
When insurers have the capacity to evaluate claims before they are paid, but choose not to do so because doing so would disrupt the flow of a reimbursement system that is under-staffed, it is dishonest for such insurers to say that they are victims of the system even if they have that power. In addition, for many years, the culture of the insurance industry has been one in which false claims have been accepted as an inevitable aspect of doing business. Then, as a result of their having been the targets of the alleged fraudulent activity, they pass these losses on to their policyholders in the form of increased premiums (despite the duty and ability to review claims before they are paid). Do your premiums continue to rise?
Insurers make a ton of money, and they are now keeping more of it by alleging fraud in claims to avoid paying legitimate claims. In addition, they are going after monies paid on claims for care performed many years prior from providers who are too terrified to fight back. All of this is being done under the guise of fighting fraud. In addition, many insurance companies, under the impression that law enforcement agencies are not adequately responding to fraudulent claims, have resorted to filing civil lawsuits against healthcare providers and other businesses, accusing them of fraud.
- An increase in the number of prosecutions and investigations of fraudulent activity in the healthcare industry
It has been reported that the government (and insurers) have increased the number of persons assigned to investigate fraud, increased the number of investigations being conducted, and increased the number of fraud offenders being prosecuted.
Because of the rise in the number of investigators, it is not unusual for law enforcement officers who are tasked with working on fraud cases to lack the expertise and comprehension necessary for working on these kinds of investigations. It’s also not unheard of for investigators from various agencies to spend a significant amount of time and effort on a single instance of fraud that is being investigated by multiple organizations.
Unless they have the prosecutor’s implicit consent, law enforcement officials are not allowed to aggressively investigate fraud charges, and this is particularly true at the federal level. Some law enforcement officers who do not wish to work a case, regardless of how excellent it may be, may go to a prosecutor to ask for a declination on cases that are portrayed in the most unfavorable light possible.
It is common practice to exclude healthcare regulatory boards as potential contributors to an investigation because of this perception. Complaints about improper behavior by licensees who fall under the jurisdiction of boards are often investigated on a regular basis. The primary element shared by all of these boards is the presence of licensed practitioners who, in most cases, are currently engaged in clinical work and are up to date on developments in their respective states.
At the urging of state insurance regulators, insurance companies established specialized investigation teams with the goal of addressing questionable claims and making it easier for true claims to be paid. To staff these units, several insurance companies have brought in former law enforcement officers who have little to no prior expertise in the field of health care, as well as registered nurses who lack prior training in the field of investigation.
Establishing fraud requires reliance on reliable sources, which may be a significant challenge for law enforcement and prosecutors who are trying to move fraud cases ahead. Payors make their decision about whether or not to pay claims based on whether or not they believe the information they have received from providers to be an accurate depiction of what was supplied to them. Problems with fraud occur when service providers submit claims that distort key facts, such as claiming payment for services that were not really performed or misrepresenting the service provider.
Are there going to be more prosecutions for fraud and financial recoveries? In the various (federal) prosecutorial jurisdictions throughout the United States, there are various loss thresholds that must be surpassed before the (illegal) activity will be considered for prosecution, such as $200,000.00 or $1 million. These thresholds determine whether or not the activity will be prosecuted. What message does this send to those who commit fraud—steal up to a certain amount, then quit and go to another jurisdiction?
In the end, the “health care fraud shell game” is ideal for “fringe caregivers,” “deviant providers and suppliers,” and “suppliers who jockey for unfettered access to health care dollars from a payment system that is either incapable or unwilling to employ necessary mechanisms to appropriately address fraud — on the front-end before the claims are paid!” These shady providers and suppliers are aware that each claim is not reviewed before it is paid, and they continue to do business despite the fact that they are aware that it is therefore impossible to discover, investigate, and punish every individual who commits fraud!
We are very fortunate to have a large number of skilled and committed professionals working on the front lines to fight fraud. These individuals refuse to give up in the face of challenges and are, as a result, making a difference one claim or case at a time. These experts include but are not restricted to: Providers from all disciplines; Regulatory Boards (for insurance and health care); Claims Handlers and Special Investigators from insurance companies; Local, State, and Federal Law Enforcement Officers; State and Federal Prosecutors; and many others.