Fraud and Abuse in the U.S. Healthcare System

Medicaid fraud comes in many forms. A provider who bills Medicaid for services that he or she does not provide is committing fraud. Overstating the level of care provided to patients and altering patient records to conceal the deception is fraud. Recipients also commit fraud by failing to report or misrepresenting income, household members, residence, or private health insurance. Facilities have also been known to commit Medicaid fraud through false billing. The Medicare and Medicaid fraud and abuse statute provides that an individual who knowingly and willfully offers, pays, solicits, or receives any remuneration in exchange for referring an individual for the furnishing of any item or service

Health care fraud and abuse is a significant contributor to high health care spending, resulting in the wasteful spending of health care dollars. The Federal Bureau of Investigation (FBI) and National Health Care Anti-Fraud Association (NHCAA) estimates that 3 to 10 percent of health care dollars are lost to fraud and abuse (Federal Bureau of Investigation, 2010). Fraud is the intentional deception or misrepresentation that an individual knows to be false or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to themselves or some other person (Ryan, 2006). Bloomberg reports health care expenditures are rising faster than the rate of inflation and spending in the US has nearly doubled in the last decade and one-half of health care

The goal of this deception is to obtain a federal healthcare payment that would not otherwise exist. The provider, practice, or institution may falsely claim to have provided a service or used supplies for a patient when in reality neither the service nor the supplies were used. A secondary way to commit Medicare fraud involves referrals. If one solicits, pays, or accepts money to encourage referrals because the services are reimbursed by Federal healthcare programs, they are participating in Medicare fraud. This type of fraud is addressed in the Anti-Kickback Statute. Lastly, Medicare fraud occurs when the complexity of services are overstated and billed at a higher than necessary rate. This action violates the False Claims Act which protects the government from being excessively charged for goods and services.

Medicare and Medicaid fraud has some strengths as well as weaknesses. A strength that comes with healthcare fraud is The Affordable Care Act. This act helps to fight health care fraud, abuse and waste (Department of Human Services, 2014). Many laws have been implemented to help commit those people that have been committing Medicare and Medicaid fraud. Per the Center of Medicare and Medicaid services website “The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses, establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices” (Department

According to the Federal Bureau of Investigation (FBI) “health care fraud costs the country an estimated $80 billion dollars a year” ("Health Care Fraud," n.d., p. 1). Because health care costs continue to rise more rapidly than the rate of inflation the threat of health care fraud continues to rise. The Affordable Health Care Act has put new policies in place to identify and stop health care fraud. The FBI along with other government, insurance, and public agencies have joined together to combat fraud at every level. New rules in identifying, investigating, and prosecuting fraud before payments are made to medical providers could save billions of

fraud risk exclusion from participation in Federal health care programs and the loss of their

Perhaps the finest total dollar quantity of fraud is devoted via the medical health insurance companies themselves. There are severa research and articles detailing examples of insurance companies deliberately not paying claims and deleting them from their structures,[21] denying and cancelling coverage, and the blatant underpayment to hospitals and physicians beneath what are normal costs for care they provide.[22] Although tough to acquire the records, this fraud via coverage agencies may be anticipated through comparing revenues from premium bills and prices on health

(Jones and Jing) Though citizens might not see the effects of health care fraud directly, everyone is impacted in one way or another either through increased taxes, high insurance costs, or the inability to afford health care coverage. While we all hear about major frauds in the system, a majority of the frauds are small and usually go through undetected, unreported, or seriously underreported. (Sparrow) These small frauds add up to be a huge problem. There is a large spectrum of frauds in the health-care systems ranging from the theft of a wheelchair, to organized crime groups that steal patient information and bill for phantom services in multimillion-dollar schemes. (Jones and Jing) In many cases, the fraud is minor but all the small scams add up to an enormous loss to the public. For example, the frequent occurrences of forging of a doctor’s signature on a prescription accounts for billions of dollars lost each year. (Jones and Jing) One of the most common crimes involves billing for services that were never performed. This involves a health care provider submitting a false claim to be paid for a patient that was never treated or adding on services to a patient. For example a doctor may obtain names of other people such as a patients spouse or child who are covered by insurance and put in a claim for them as well as the actual patient. (FBI) Another common fraudulent activity involves upcoding of services. This is when a healthcare

Healthcare services have been on the rise for over 10 years now. According to a 2012 consumer alert, the industry provided $2.26 trillion in payments for more than four billion health insurance benefit claims in the year 2011(Fraud in Health Care). The bulk of the claims and the mainstream of fraud and abuse stem from the Medicare system professionals, who are knowledgeable about the process and persuade new clients into handing over their pertinent information in hopes of deception and illegitimate claims. Multiple and double billing, fraudulent prescriptions, are some of the major flaws in this organization that has made the healthcare services industry curdle. (AGHAEGBUNA, 2011) This is a non-violet crime and is often committed by very

Although Congress has used several anti-fraud measures to protect the federal government health care programs, the False Claims Act of 1986 has become the main weapon that government prosecutors use against perpetrators of health care fraud. Designed to prevent fraud and other abuses in federal government programs, the False Claims Act has been the primary statute the government has used in its fight against health care fraud. However, government prosecutors do not rely on one statute in their prosecution of alleged cases of health care fraud. Instead, they rely on a combination of statutes, but the False Claims Act has emerged as the main statutory weapon.

Qui Tam is a part of the false claim act devised in 1986, which allows people to file suits against other parties on behalf of the USA as a mode of recovering money lost via fraud (Kazmier, 2008). Using the Qui Tam, anyone can aptly file cases against other parties that embezzle government funds. This provision allows those people who file suits as whistleblowers to recover the misused funds (Ruhnka & Boerstler, 2000). Whistleblowers are a pertinent factor in presenting attention to the federal government regarding fraud issues within the health care affiliations in which they work.

According to the legal dictionary, "health care fraud is a type of fraud that involves the use of our health care systems by an individual, medical provider, insurance company in a dishonest manner to profit from it" (Health Fraud). Fraud includes single groups of people, employers and government supplying false information, claim services or documentation that was never provided, changing patient or doctors signatures or changing medical records to establish misrepresented services, and even submitting a request twice. While health care fraud may not be a label as everyday crime people and business touches, hurt and even destroyed by this act. This crime has caused an insurance premium to skyrocket for individuals, small companies, and corporations

Healthcare fraud is costly for everybody, as it harms the reputation of the institution or physician committing it, and financially damages the patient being affected.By definition fraud may be defined as intentionally employing surprise, trickery, cunning, deception and unfair ways by which one party cheats another party out of financial resources. In order to educate a healthcare manager regarding fraud , many aspects of fraud must be assessed. This includes the types of fraud, the consequences that come with fraud,the individual(s) committing them, techniques to prevent fraud, and why the healthcare industry is vulnerable to fraud.

These crooks are the possible cause of ruining the reputation of the most trusted and appreciated professionals of our society – physicians. Healthcare fraud can be committed in a variety of ways, but three of the most widely used are described below. The first and most widely known, is billing services that were never endured by using general patient information. When giving personal information out, many hand it over to the front desk assistant at the local doctor. These appear to be people are some of the most known to scam the information and bill patient’s payments that never took place. Keep in mind that when handing over information, the handler is a trusted individual with a good reputation. On the other hand, many are scammed for the opposite; otherwise known as “upcoding,” where patients are billed more expensive services that were actually done. In fact, according to USA.gov a new study showed that 7 percent of identity fraud victims this year reported identity thieves stole their health insurance information, rising up from just 3 percent last year (Federal Bureau Investigation, 2010). This includes the latest scam, called “unbundling,” where scammers con bills and bill each step of a procedure as if it were a separate making the individual pay even more money, leaving devastating effects for the victim. All of which have a common goal of making taxpayers, insurance companies, and

Insurance companies and the federal government should pool resources using a percentage of profits to finance a task force to arrestively fight fraud. The penalty for fraud should be more stringent which will cause perpetrators to think twice before formulating a plan to commit fraud. The Affordable Health Care Act is the beginning of many programs established to fight against fraud. Health care fraud is a growing problem and should be taken more seriously by citizens of the United States. Physicians, health care workers, and patients are responsible for