Critical Analysis of a U.S. Healthcare Challenge - Fraud and Abuse
HSM 420 - Managed Care and Health Insurance
April 19, 2015
Professor Bob Vega

Critical Analysis of a U.S. Healthcare Challenge - Fraud and Abuse

Introduction 2

What is Fraud and Abuse 2

Cost of Fraud 2-3

How can fraud be detected in Medicare 3

What are the implications for fraud and abuse 3-4

How can it be prevented? 5

Summary 6

Conclusion 7

References 8

Increasing costs of healthcare is a fear for many families in America. An issue in the rate of healthcare insurance is deception. Fraud is frequently very problematic to identify. The scale of healthcare fraud is indefinite. Preliminary compensation and expense and billing timeframe of 90 days permits for quick reimbursement of services, however, many times before there is a warning of deceitful billing the company has shut down and moved on. Fraud in American healthcare will cost American’s millions, possibly even billions of dollars each year. Without hesitation, behind every action of fraud, is an interval in ethics.
Fraud is the deliberate dishonesty or falsification that a person knows to be untrue or that they consider to be factual is not, and sorts, if they know that the dishonesty might cause in an unsanctioned advantage to themselves or someone else. The most common kind of fraud rises from an untrue interpretation or falsification made, that is factual to prerogative or expense under the Medicare program. The offender could be a doctor or other specialist, provider of medical tools, an worker of a doctor or contractor, a transporter worker, a billing facility, a recipient, or any other individual or industry unit in a situation to bill the Medicare program or to otherwise advantage from such billing (Guidelines for Addressing Fraud & Abuse, 2006). Efforts to deceive the Medicare program may take a diversity of methods. Billing for amenities or provisions that were not delivered, changing claim forms to gain a greater compensation amount intentionally requesting compensation for identical compensation in order to get reimbursed twice. Finishing Certificates of Medical Necessity (CMNs) for patients that are not recognized by the medical supplier, unbundling or “exploding” charges, petitioning, proposing, or accepting a payment, corruption reimbursement, false depiction with reverence to the environment of the services extracted or charges for such amenities, uniqueness of the individual getting or representation the services, periods of the services, etc. Submitting claims for amenities that are not covered but then are billed like they were covered amenities, claims involving conspiracy among a provider and a recipient, resulting in higher charge to the Medicare program, the use of some other individual’s Medicare card in procurement health care, conspiracy among a supplier and an member of staff, or any act that institutes fraud under appropriate federal or state law (Guidelines for Addressing Fraud & Abuse, 2006).
Fraud is a severe crime that should alarm all parties of the U.S. health care system and is a costly actuality that the government cannot oversee. While not all fraud can be prevented, by educating employees about the many different categories of fraud, patients can be educated on how to guard themselves from fraud. There are government curriculums to inform the public that they can be directed. An educated public and an appropriately funded FBI will go an extended way in the whole constraint of health care fraud. While approximately part of the duties renowned above may be originally measured to be abusive, instead of deceitful actions, they may change into fraud. Once the fraud has been proposed, the administration can do one of the following: pursue federal criminal prosecution of the people convoluted in the false actions, assign a civic settlement with all the people tangled, take managerial action to eliminate the accountable individual from the national healthcare curriculums, suspend the worker from the Medicare program (Kirschenbaum, Wasserstein, Wolszon, & Hyman, Phelps & McNamara, P.C., 2004).
Federal law describes abuse, as pragmatic to the Medicare program, as occurrences or performs by suppliers, which while not typically measured fraudulent, are varying with accepted complete medical, corporate or financial practices that purposely, or not on purpose generate needless expenses to the Medicare program. Inappropriate compensation or repayment services, which miscarry to meet acknowledged values of attention, or which are not practical and essential are instances of such practices. Abuse can look like, but it is not partial to: Excessive use of medical and health care services, claims for services that are not essential, or if it’s not considered physically required, not to the point concentrated or billed; gaps of the obligation arrangement which result in recipients actuality billed for sums prohibited by the carrier on the foundation that such burdens surpassed the Medicare Fee Schedule, greater than the Limiting Charge for providers that do not participate, desecrations of the Medicare Participating Agreements by doctors, merchants or consultants. There are several forms of abuse that exist, and besides those that have already been listed, are eventually found to be deceitful. When abuse is dedicated, the government can do one of the following: Recuperate payment made in fault; petition public financial punishments consistent to the grade of abuse, suspend the supplier from the Federal Healthcare Programs (NHIC Corp.) (Guidelines for Addressing Fraud & Abuse, 2006).
The U.S. General Accounting Office guesstimates that $1 out of every $10 spent for Medicare and Medicaid is lost to fraud. This interprets into less resources for health care due to the draining on federal and state budgets. Most providers of health care are straightforward entrepreneurs who want to provide superior health care to Medicare recipients. However, there remains a comparatively slight group of providers who take benefit of the Medicare program and occupy in arrangements or practices that result in unsuitable payments. At the root of healthcare fraud is billing. Billing fraud can transpire in many ways. Medical providers commit fraud when they bill for amenities that are not delivered. Sometimes fraud occurs when provider’s bill for medically avoidable procedures and services or bill for services provided to another person that is not a covered member (Justice, 2007).
The services that are billed are up-coded and unbundled. Up-coding is when the service is billed at a greater rate than what was executed. Unbundling is when a successions of services which are generally billed as one service are then divided into single units to attain higher rates of compensation. Other instances of healthcare fraud include: Pharmaceutical fraud, which is replacing and dispensing generic drugs when they should be name-brand drugs or perceptively undersupplying medicines or their refills, and Kick-back fraud, which is accepting a certain proportion or somewhat of value in exchange for referrals or services (Kirschenbaum, Wasserstein, Wolszon, & Hyman, Phelps & McNamara, P.C., 2004).
In 1863 the False Claims Act (FCA) was passed. It provided a way for the government to take legal action against dishonest and unethical workers who were providing substandard contract materials to the government after the civil war. In 1943, under President Roosevelt, a modification made it primarily used only in times of war falling its use and ability. Under the amendment, informers were no longer allowed to collect a percent of the reclamation. FCA fell into neglect until 1986, when the Reagan Administration made modifications which gave individuals the capability to file Qui tam circumstances and recuperate a fraction of the government’s retrieval. Qui Tam Actions are where under the Federal False Claims Act, a claim is filed on behalf of the United States (Qui Tam Action and Definition, NA). A qui tam lawsuit is a complaint conveyed by a single person for the United States government looking for to uncover and thus halt the deteriorating of federal resources. The qui tam speaker, often mentioned to as a whistleblower, if effective in their suit, is allowed a fraction of the funds recovered by the federal government, normally between 15 to 25 % of the retrieval. The claim is brought by a person with information of the fraud, together with health care managers, doctors, nurses and patients. Nevertheless, a private civilian or company cannot file a qui tam action without a lawyer. This is because the speaker brings their case on behalf of the government, and the U.S. government cannot be signified in court by someone that is not an attorney. The only way to make a qui tam claim, federal finance must be involved, and the fraud suspected must be considerable and non-frivolous in nature (Stop Medicare Fraud, NA).
Anyone who acquires reliable information that a untrue or fraudulent claim for federal funds has been acquiesced or paid is entitled to file a qui tam action, as long as they didn't learn about the deception in the correspondents, or another public forum (Justice, 2007). In 2006, The United States Government Accountability Office (GAO) followed more healthcare cases with larger reclamations than any other types of fraud cases. The False Claims Act has been extremely important in the fight against fraud. Other appropriate laws which have helped in the examination of fraud are which aid in the prosecution of, what they call “kick-backs” and are used to avert conflict of interests, and the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which among other things, established the Health Care Fraud and Abuse Control Program (HCFAC), providing economical finance and prosecution penalties for fraud and abuse cases (Stop Medicare Fraud, NA).
According to The Department of Health & Human Services and the Department of Justice, in 2007, the Annual Health Care Fraud and Abuse Control Program Annual Report for the year 2006, “the Federal Government won or negotiated approximately 2. 2 billion in judgments and settlements (Justice, 2007)”; “The HCFAC account has returned over $10. 4 billion to the Medicare Trust Fund since the inception of the program in 1997 (Justice, 2007).” Some of the major settled cases, according to USA Today say that they have recovered almost 16 billion, which is about 36 percent because of the whistle-blower fraud cases since 2009 (Kennedy, 2012).
The article shows that over the last 20 years, these types of whistle-blower cases have grown to the point where they average approximately triple as much currency back to the government as the non-whistle-blower cases. In 2011, the federal government surpassed all accounts, taking in close to $2.3 billion in informer reimbursements and decisions. Since 1987, informer qui tam cases have received approximately $16 billion, non-informant cases have composed about $5 billion (Kennedy, 2012).
Under the False Claims Act, the administration can recuperate up to three times the amount deceitfully occupied by a firm, according to Justice Department. Enormous health care fraud cases often include pharmacological companies whichever falsely publicizing a product or publicizing it for a use that hasn't been permitted by the FDA. Health and Human Services stated that in 2012, their budget included a supplementary $300 million to prosecute health care fraud (Kennedy, 2012).
In conclusion, with fraud and abuse on the rise in the United States, it is important to make sure that any lost or stolen insurance cards be reported immediately and also to report any known abuse or fraud to the proper authorities in order to save money. If the fraud and abuse is under control and lowers, maybe the cost of healthcare for patients will lower.

References

Guidelines for Addressing Fraud & Abuse. (2006, October). Retrieved from CMS.gov: http://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-Prevention/FraudAbuseforProfs/Downloads/GuidelinesAddressingfraudabuseMedMngdCare.pdf
Justice, D. o. (2007). The Department of Health and Human Service.
Kennedy, K. (2012, February 23). Whistle-blowers key in health care fraud fight. Retrieved from USA Today: http://usatoday30.usatoday.com/news/washington/story/2012-02-22/health-care-fraud-whistleblowers/53212468/1
Kirschenbaum, A. M., Wasserstein, J. N., Wolszon, J. K., & Hyman, Phelps & McNamara, P.C. (2004, NA NA). APPLICATION OF HEALTH CARE FRAUD AND ABUSE LAWS. Retrieved from HPM.com: http://www.hpm.com/pdf/Fraud%20&%20abuse%20outline%20-%201-3-2014.pdf
Qui Tam Action and Definition. (NA, NA NA). Retrieved from US Legal: http://definitions.uslegal.com/q/qui-tam-action
Stop Medicare Fraud. (NA, NA NA). Retrieved from Department of Health and Human Services: http://www.stopmedicarefraud.gov/aboutfraud/index.html