Effects Of Medical Abuse

Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.

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.

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

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 estimate that the federal government loses 30 percent of every dollar it spends on medical claims, due to medical billing mistakes and fraud. With so many loopholes and regulations surrounding Medicare, it is impossible for one person to know every nuance. However, constant diligence and ethical practices are a cornerstone of catching and preventing medical billing mistakes.

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

Attempts to stop fraud were enhanced under Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The purpose was to improve the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, and the efficiency and effectiveness of the health care system. This public law encouraged the development of a health information system through standards and requirements for the electronic transmission of certain health information (aspe.hhs.go). The Act established a program to take action against fraud committed against public and private health plans. The legislation required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS) acting through the Department 's Inspector General (HHS.gov). The HCFAC program is designed to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse. The Act requires HHS and Department of Justice (DOJ) detail in an Annual Report the amounts deposited and appropriated to the Medicare Trust Fund, and the source of such deposits. (HHS.gov) I will summarize the impact of these laws as it pertains to how they are impacting the healthcare delivery system. (HHS.gov)

Common fraudulent practices include billing for services never received, upcoding or unbundling of services, and mislabeling. Billing dishonest services occurs anytime a healthcare provider charges Medicare for a service the patient never received or billing for a more expensive service than performed. Upcoding and unbundling, two examples of billing for a more expensive service demonstrate this fraudulent practice. Simply put, upcoding occurs by billing more expensive codes than the services performed, while unbundling refers to a “bundled” service broken down or unbundled, allowing procedures billed separately to obtain a higher reimbursement than customary. Mislabeling, the practice of substituting non-covered services or products with services or products covered under Medicare guidelines also constitutes fraud. For example, a home healthcare company commits fraud by mislabeling house cleaning services, not covered by Medicare, as a nurse visit in order to receive payment. A pharmacy filling a patient’s prescription with generic drugs and charging for name brand drugs also represents mislabeling.

(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.

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

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