Healthcare fraud and abuse are illegal practices targeting private health insurance companies that mainly aim to incur great amounts of money from claims that are falsified. The US Department of Health and Human Services Office of the Inspector General suggests a 7 step Compliance Program that may protect physicians from committing violations that may be considered fraud even if the act was unintentional. Healthcare frauds and abuse may take several forms all of which are punishable by law.
A dermatologist in Florida was sentenced to 22 years in prison along with payment of 3.7 million USD in restitution on top of another forfeited 3.7 million USD and was fined 3,086 USD for performing medically unnecessary procedures on 865 Medicare beneficiaries. Another physician in Florida was fined 727,000 USD and was sentenced to 24 months incarceration for signing blank prescriptions and certificates for medical procedures for patients he never even saw. Raritan Bay Medical Center paid 7.5 million to the US government for increasing prices for inpatient and outpatient care defrauding the Medicare program. These are just examples of medical fraud cases reported to the Health and Human Services and Department of Justice. In just during the first quarter of 2022, 10 people including medical doctors and a nurse practitioner were indicted in a 300 million USD healthcare fraud for accepting bribes and ordered millions worth of dollars of tests which is also known as kickbacks.
Since it has been well-known that healthcare insurance can really generate income to physicians and hospitals, some may take advantage of this and manipulate the claims to be higher than the usual priced amount. Healthcare fraud happens when an individual provides wrong information or alters medical information or a procedure done to obtain financial benefit. Falsifying information, using an identity to file a claim, claiming a medical procedure and improper diagnosis (upcoding or down coding) are the usual forms of fraud. The submitted claims for this falsified event will now entitle private healthcare insurance companies to pay huge amounts to healthcare providers and will be a loss for the company. This now can cause premiums to be increased affecting innocent individual payers and become victims themselves.
Health Net Federal Services LLC defines healthcare fraud as an intentional deception or misrepresentation of facts that can result in unauthorized payment or benefit. This may take form in any of the following:
- Submitting claims for services not provided or used
- Falsifying claims or medical records
- Misrepresenting dates, frequency, duration or description of services rendered
- Billing for services at a higher level than provided or necessary
- Falsifying eligibility
- Failing to disclose coverage under other health insurance
Healthcare abuse on the other hand means actions that are improper, inappropriate outside acceptable standards or professional conduct or medically unnecessary. Examples of healthcare abuse are:
- A pattern of waiving cost-shares or deductibles
- Failure to maintain adequate medical or financial records
- A pattern of claims for services not medically necessary
- Refusal to furnish or allow access to medical records
- Improper billing practices
Workplace Protection from Fraud
The US Department of Health and Human Services Office of the Inspector General recommends creating a Compliance Program that can ensure legitimate claims submission and protect physicians from fraudulent activities.
1. Conduct internal monitoring and auditing
- An ongoing evaluation process is important to a successful compliance program. This will not only include whether the physician practice’s standards and procedures are in fact current and accurate, but also whether the compliance program is working. Therefore, an audit is an excellent way for a physician to ascertain what problematic areas exist and focus on those areas.
2. Implement compliance and practice standards.
- After the internal audit identifies the practice’s risk areas, the next step is to develop a method for dealing with those risk areas through the practice’s standards and procedures. Written standards and procedures are a central component of any compliance program. Those standards and procedures help to reduce the prospect of erroneous claims and fraudulent activity by identifying risk areas for the practice and establishing tighter internal controls to counter those risks, while also helping to identify any aberrant billing practices.
3. Designate a compliance officer or contact.
- After the audits have been completed and the risk areas identified, ideally one member of the physician practice staff needs to accept the responsibility of developing a corrective action plan, if necessary, and oversee the practice’s adherence to that plan. This person can either be in charge of all compliance activities for the practice or play a limited role merely to resolve the current issue.
4. Conduct appropriate training and education.
- Education is an important part of any compliance program and is the logical next step after problems have been identified and the practice has designated a person to oversee educational training. Ideally, education programs will be tailored to the physician practice’s needs, specialty and size and will include both compliance and specific training.
5. Respond appropriately to detected offenses and develop corrective action.
- When a practice determines it has detected a possible violation, the next step is to develop a corrective action plan and determine how to respond to the problem. Violations of a physician practice’s compliance program, significant failures to comply with applicable Federal or State law, and other types of misconduct threaten a practice’s status as a reliable, honest, and trustworthy provider of health care.
6. Develop open lines of communication with employees.
- In order to prevent problems from occurring and to have a frank discussion of why the problem happened in the first place, physician practices need to have open lines of communication. Especially in a smaller practice, an open line of communication is an integral part of implementing a compliance program.
7. Enforce disciplinary standards through well-publicized guidelines.
- Finally, the last step that a physician practice may wish to take is to incorporate measures into its practice to ensure that practice employees understand the consequences if they behave in a non-compliant manner. An effective physician practice compliance program includes procedures for enforcing and disciplining individuals who violate the practice’s compliance or other practice standards. Enforcement and disciplinary provisions are necessary to add credibility and integrity to a compliance program.
References: What Is Fraud and Abuse? (tricare-west.com) Healthcare Fraud and Abuse – PMC (nih.gov) 2/10/2022 – Ten Indicted for Healthcare Kickbacks (defense.gov) OIG Compliance Program for Individual and Small Group Physician Practices (hhs.gov)
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