Posted by Sabrina Gilliam Formey.
Health care fraud may be more extensive than fraud in other industries because deception branches from an assorted group of players; those players being insurance companies, pharmacists, providers, suppliers, health care vendors, health care provider employees, physicians, specialists, and patients. To compound the problem, some of those players are not only acting independently, but also participating in fraudulent activities within a network, or organized crime rings, and or with computer hackers who are unjustly profiting from committing health care fraud. As a brief example, insurance billing claims that a facility submitted for a number of Alzheimer’s patients receiving “group therapy”, when they were actually placed in a room to watch the movie “Forrest Gump”, doesn’t scratch the surface on how persistent health care fraud has been; and how it continues to morph into new dimensions, that are discovered months and sometimes years after millions of dollars have been dispersed for fraudulent claims.
Lack of public awareness about health care fraud fosters a criminal subculture of operators that swindle unjust profits for their own personal gain. Those fraudulent activities, not only create health and safety risks, but also drive up costs for healthcare. These costs are later transferred to patients resulting in higher costs for care: higher employer sponsored or group premiums, higher deductibles, and higher co-pays. Additionally, there are “double jeopardy” costs that further become a burden for citizens to bear through state and federal tax increases levied to close deficit gaps for government healthcare programs.
Common Channels for Health Care Fraud
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Billing for services not rendered.
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Billing for a non-covered service as a covered service.
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Misrepresenting dates of service (billing one treatment date as separate dates).
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Incorrect reporting of diagnoses or procedures (includes unbundling).
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Overutilization of services.
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False or unnecessary issuance of prescription drugs.
“According to the Centers for Medicare & Medicaid Services (CMS), national health expenditures in the U.S. reached $2.6 trillion in 2010 – 17.9 percent of GDP.” With the expansion of coverage of an estimated 22 million people that were previously uninsured prior to the U.S. Affordable Care Act(ACA), health fraud crime will become an undeclared war between government agencies and insurance companies that are trying to stop these crimes and the many players that are many steps ahead due to the gap in systems, lack of controls, and stratagem for auditors/investigators deployed to monitoring claims activities and continuous oversight that would be required.
Sabrina Gilliam Formey is a graduate student at the Feliciano School of Business, Montclair State University.
Article
10 popular health care provider fraud schemes ‘Do no harm’ isn’t their motto By Charles Piper, CFE, CRT
January/February 2013
http://www.acfe.com/article.aspx?id=4294976280
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- Health care: A ‘goldmine’ for fraudsters
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http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/
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http://www.nasdaq.com/article/blockchain-putting-the-block-on-healthcare-fraud-waste-and-abuse-cm817907
Additional Readings
- Health care: A ‘goldmine’ for fraudsters
January 13, 2010: 3:07 PM ET By Parija Kavilanz, senior writer
http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/
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July 19, 2017, 08:16:38 AM EDT By Michael Scott Bitcoin Magazine
http://www.nasdaq.com/article/blockchain-putting-the-block-on-healthcare-fraud-waste-and-abuse-cm817907