Medicare Fraud Essay

On November 21, 2013, Theanna Khou pleaded guilty to dispensing and selling OxyContin from his Huntington Pharmacy without medical necessity from fraudulent prescriptions issued by a clinic (" Health care fraud investigations," 2014). Khou billed Medicare for filling prescriptions that patients never received. This story is becoming a norm for the health care industry, because the growing financial prosperity of the health industry. Corruption and crime is changing, turning from drug dealing to a safer haven that has less legal management, organization, and more wherewithal the business of health care fraud.

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

When providers or patients submit false or misleading information intentionally to a health plan, this is fraud. Some examples of healthcare fraud and abuse include filing claims for services or medications not actually performed or obtained, billing for services for non-covered items using codes for billable services or items, altering medical records, waiving co-pays and deductibles, up coding and unbundling, using someone’s insurance card, billing Medicare patients at a higher fee than non-Medicare patients, and accepting kickbacks for referring patients, to name just a few. Fraud can be committed by hospitals, medical providers, laboratories, pharmacists, billing services, medical equipment suppliers, and even patients. Patients can protect themselves from healthcare fraud and abuse by knowing their healthcare benefits, reviewing the explanation of benefits, asking the doctor to explain the service that was given, report discrepancies, protect insurance cards and member identification numbers, beware of free services, report copayment and deductibles being waived, and never sign blank insurance forms.

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

Contrary to this, anecdotal reports stated that other clinicians sometimes spend more times in checking and treating patients with severe illnesses or who are in critical conditions, which made the physicians care for a greater number of patients with lower acuity. Whenever a physician and clinician bill for the same service, it is very difficult to tell if the physician saw a more complex patient. Due to these uncertainties in comparing their services, the Commission is reluctant in altering the payment differential. From that discussion, every provider must be familiar with some fundamentals about Medicare. First and foremost, there is Medicare Part A, which actually covers skilled nursing home, hospital, and home health charges; and then there is Medicare Part B, which then envelops most outpatient services, the care that patients in particular obtain from a doctor’s office (Fishman, 2002).

When health care providers file a medical claim on behalf of the Medicare patient, it is being filed with the Federal Government, which certifies that the provider earned the payment requested and that the provider also complied with billing requirements. Improper claims are categorized as erroneous and fraudulent claims. Erroneous claims can be classified as applications for reimbursements where innocent and common coding and billing errors have been made. Id. Whereas, fraudulent claims are classified as applications for reimbursements with reckless and international conduct to collect payments for services not provided. Id.

Some federal statutes address fraud in government health care programs, and many of these laws vary considerably (Krause 2004). Some of these laws specifically target health care fraud. Example of the laws that the government direct at inappropriate health care activities includes the “Medicare and Medicaid Anti-Kickback Statute and Ethics in Patient Referrals Act (EPRA).”

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

Medicaid and Medicare are two different government programs. Both programs were created in 1965 to help older and low-income families be able to buy their own private health insurance. These programs were part of President Lyndon Johnson’s “Great Society” plan, a commitment to helping meet the needs of individual health care. They are social insurance programs, which allow the financial load of patient’s illnesses to be shared by other healthy, sick, wealthy, and lower income individuals and families.

The typically overlooked crime of healthcare fraud has resulted in a significant monetary loss on the part of the American public paying into government run medical programs, as well as private insurance company programs. Historically, we have seen that in any instance where money is involved people have found ways to or at least have attempted to obtain it illegally. Some do it through overt acts of violence such as a robbery. Others choose more covert ways of illegally obtaining money. This is usually conducted through fraudulent activities. This is the nature of white-collar crime. There is no force or violence involved but it is still illegal. (SSA) Obviously, when such a large amount of money is involved there is

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.

As the healthcare industry begins to expand its horizons, by featuring more staff and patients, the types of frauds that are committed also rise in number and complexity. One of the many consequences that derives from fraud within the healthcare system includes an increase in the cost of healthcare itself. In order to limit and analyze fraud that encompasses the entirety of the healthcare industry, it is necessary to assess the different types of frauds and in doing so also understand the method of reimbursement involving the professionals and members of the health care industry. Since a majority of these reimbursements are paid by insurances or through government programs, a program known as coding was created in order to organize and properly pay off these reimbursements(Marilyn Price, Donna Norris, 2009). One of the many

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