...Contract Fraud in the healthcare system EXECUTIVE SUMMARY The purpose of this research is to learn about fraud cases that have been happening in the healthcare system for the past few years, and how those fraudulent acts were pioneered and executed. The main focus will be on three of the many pillars that make fraud a reality fraud – committing, concealing and detecting; that is; how the fraudulent was committed, how the perpetrator concealed it and how it was detected by the relevant authorities. Focusing on these three areas gives us the opportunity to take an in-depth look into the loopholes that are making it easy for perpetrators of fraud to be able to commit and conceal fraud and how their actions were detected. The paper will focus on only three of the many cases that made the topic of fraud in the healthcare a force to reckon from 2013 to 2015. These cases include a psychiatrist from Chicago, Lloyd Torrez who was found guilty of defrauding insurance companies; Empowerment Non-Emergency Medical Transportation, Inc. an enrolled Medicaid provider being led by its owner, Ms. Shorter, which was defrauding the Indiana Medicaid; and Paula Cluding, owner of Prairie View Hospice in Oklahoma who provided millions of dollars’ worth of fraudulent claims to the federal Medical Care program. INTRODUCTION Fraud is deliberate deception to gain unfair and unlawful gain from an act. It is both civil and criminally wrong, and the people who commit fraud usually do it to gain...
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...Running Head: Fraud and Abuse Fraud and Abuse in the U.S. Healthcare System Tenisha Howard Keller Graduate Professor Cutspec June 12, 2011 Background People can be affected by healthcare fraud and abuse directly and indirectly. Fraud is defined as an intentional deception, false statement or misrepresentation made by a person with the knowledge that the deception could result in unauthorized benefit to oneself or another person. It includes any act that constitutes fraud under applicable federal or state law. Abuse is defined as practices that are inconsistent with professional standards of care; medical necessity; or sound fiscal, business, or medical practices. Intent is the key distinction between Fraud and Abuse. An allegation of waste and abuse can escalate into a fraud investigation if a pattern of intent is determined (B, Tom). Both, fraud and abuse can be committed by physicians, patients, and private insurers. Situations of fraud and abuse that occur in our healthcare system are billing for services that have not been provided, overbilling for services provided, and misdiagnosing health conditions in order to avoid financial responsibility for the proper treatment of illnesses. Define the Problem What can decrease the high costs of premiums and co payments? With the decrease of fraud and abuse, premiums and co payments would not be high. Who pays for fraud and abuse healthcare bill? Medicaid and Medicare are the two federal programs that are...
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...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...
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...The Beginning There have been new trends affecting today’s payment methods for long term healthcare services which is making the United States Health Care system ever more complicated. Long term health care today is considered a reimbursement driven industry (Casto, 2006) . The term reimbursement refers to repayment or compensation of health care services (Bowman, 2007). Reimbursement is the process of being repaid for services that have already been given (Casto, 2006). In long term care, services are often provided prior to payment being made. Since patients have already received treatment, the facility, practitioners, and their staff seek reimbursement to cover those expenses such as medications, procedures, and supplies (Bowman, 2007). Generally a physician, health care organization, or practitioner will submit an itemization of services, products, equipment, and supplies that have been rendered (Casto, 2006). This is known as a claim (Casto, 2006). The claim lists the fundamental characteristics of reimbursement such as fees and charges (Casto, 2006). These claims are reimbursed by one of two ways. An institution can be paid by a fixed amount called capitation (Casto, 2006). A capitated amount is what is paid regardless of the number or costs of health care services provided (Bowman, 2007). This often gives providers incentive to lower costs and to focus more on preventive care (Bowman, 2007). Fee for Service is another method of reimbursement. This is paid...
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...In addition to the benefits associated with monetary or financial rewards with by faking an illness online, the prospect of insurance or disability fraud could also explain why some individuals are more likely to exaggerate or fake symptoms of chronic illness and permanent disability than others. For instance, some of the more conservative estimates regarding disability benefit fraud suggest that “approximately $60 billion in annual Medicare payments are fraudulent. In short contrast, current efforts to prevent, detect, and prosecute healthcare fraud have produced only modest returns, recovering only $4.1 billion in 2011” (Gray et al., 2013, p. 749). Offenders looking to commit medical fraud, for example, might decide to feign symptoms of illness...
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...HealthSouth: The Scrushy Way Vonetta M. Henderson Northcentral University Introduction The Enron and Tyco scandals brought visibility to corporate scandals. The magnitude of these scandals resulted in the Sarbanes-Oxley (SOX) Act in 2002. Richard M. Scrushy and HealthSouth Corporation were the first CEO and company to be indicted under the SOX Act. HealthSouth was charged with filing false financial statements with the SEC to hid poor financial conditions from Wall Street. An audit conducted by PricewaterhouseCoopers concluded that HealthSouth overstated its cumulative earnings between $3.8 billion to $4.6 billion (Weld, Bergevin, & Magrath, 2004). Although Scrushy was charged with 85 counts, he pled not-guilty, claiming that he was unaware of the fraudulent activities that had occurred. Scrushy was later exonerated as the investigation into the company found no evidence that Scrushy orchestrated or participated in any financial wrongdoings. Five financial executives and 10 other company officials pled guilty to a variety of charges. Background Richard M. Scrushy founded Amcare, Inc. in 1984. The company opened its first facility in Little Rock, Arkansas and one year later opened a facility in Birmingham and changed its name to HealthSouth Rehabilitation Corporation (HRC). In 1986, HRC went public with its initial public offering (IPO) on the NASDAQ stock exchange (HealthSouth Corporation, 2010). In 1988, HRC moved to...
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...Capstone QUESTION #1 After so many scandals in regards to financial frauds, Sarbanes-Oxley Act Section 404 mandates that all publicly-traded companies must establish internal controls and procedures for financial reporting and must document, test and maintain those controls and procedures to ensure their effectiveness. Non-for-profit healthcare organizations do not hold themselves to the same standards as the for-profit organizations. Although whether SOX guidelines apply to businesses in the healthcare industry depends on whether the business is a for-profit or non-for-profit organization, some voluntarily adopt SOX in an effort to strengthen internal management controls and increase the quality of healthcare financial reporting (Lohrey, n.d., ¶1). Non-for-profit organizations could certainly benefit from the SOX Section 404 to help reduce the possibilities of corporate fraud by increasing the stringency of procedures and requirements for financial reporting. Many health care executives and board members have concluded that SOX created a new benchmark for best practices, as well as provided extra protection from liability by evidencing direct board attention and oversight of organization compliance (Kusserow, 2013, ¶1). Without audit committees, non-for-profit organizations are at higher risk of financial disaster. Following the SOX compliances can be very beneficial for the non-for-profit healthcare businesses because it will increase the business’s public reputation...
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...and businessmen. The terms "white-collar crime" and its offshoot, are "organized crime”. Most of the criminals are occurring in companies and the causes are the way money handling (Murray.K, 2010). Forensic accountant will investigating financial crimes and insurance fraud of white collar crook on behalf of companies and public law enforcement agencies. In addition, most of the high profile corporation, will misconduct in money laundering. The fraud will identify by forensic accountants and wherever they go money will takes them. Less attention is focused towards perpetrators compare to actual crime committed by the white collar crook. Antitrust violation, bank fraud, bribery/kickbacks, computer/internet fraud, consumer fraud, counterfeiting, credit card fraud, economics espionage and trade secret theft, embezzlement /larceny, extortion/blackmail, financial fraud, forgery, healthcare fraud, identify theft, public corruption, racketeering, and telemarketing fraud are the white collar crook violations (Brody.G, Kiehl.A, 2010). The characteristic white collar crook criminal does not pledge many of the economics fraud as we listed earlier. It is this phenomenon that criminologists, sociologists, law enforcement, fraud examiners and forensic accountants must take into consideration as they investigate white collar crimes (Brody.G, Kiehl.A, 2010). With the current economic slump, we have...
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...Intro to HealthSouth Fraud Case Review In 2003, HealthSouth was accused of one the largest accounting fraud cases in healthcare history and those involved are still being tried today, nine years later. HealthSouth was founded in Birmingham, Alabama in the year 1984 by a respiratory therapist name Richard Scrushy. By the year 1999, HealthSouth had grown to house 230 surgical centers, 120 inpatient hospitals, 5 medical centers, 129 diagnostic centers and 1379 outpatient rehab centers and was worth an estimated billion dollars. It was revealed that HealthSouth started their downward spiral in the year 2002, which paralleled the timeframe that Scrushy sold of ~ $100,000 in HealthSouth Stock Options. Within the following 6 plus months to follow, the FBI announced allegations against HealthSouth and opened a criminal investigation for probable SEC violations. The FBI investigation initially uncovered wrong doings from the years 1999-2002 where Scrushy had overstated his salary 1 million + dollars to meet expectations of shareholders and Wallstreet. Unfortunately, this was just the beginning, and as forensic accountants dug deeper, the FBI soon found that HealthSouth’s corporate accountants were adjusting entries to offset liabilities, reduce expense accounts and state elevated salaries to balance their bookkeeping. It was reported ~$373 million dollars of cash on the books was fictitious. It was eventually revealed that all four Accounting Statements were incorrect and that...
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...05/19/2013 forensic accountant CONTEMPORARY BUSINESS forensic accountant CONTEMPORARY BUSINESS 125/19/20135/19/20135/19/2013 fraud busters In today’s world, it is knows by everyone that different developments were taken place in the last periods. Our globalized world in a state of continuous technological change and innovations has been challenged by new generation criminology risk factors. From business, government, regulatory authorities, and the courts evidence indicates that a higher level of expertise is necessary to analyze current financial transactions and events. Forensic accounting is a specialized area of an accounting practice that describes engagements which results from actual or anticipated disputes or litigations. Forensic accounting has been defined as accounting analyzers that can uncover possible fraud that is suitable for presentation in court. A Forensic accountant needs accounting, law, finance, investigative and research skills to identify and prevent fraud. Forensic accountant uses her/his knowledge of accounting, law, and criminology to uncover fraud, as well as gather any evidence and present it to the court....
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...Insurance fraud occurs when any act is committed with the intent to fraudulently obtain some benefit or advantage to which they are not otherwise entitled to. Health insurance Fraud is becoming one of the top forms of fraud in America. Insurance fraud cost Americans billions of dollars every year as well as higher premiums. It is viewed as mostly a white-collar crime but it can come in many different forms. People who usually commit these kinds of frauds are motivated by greed for necessity or seeking wealth and luxury. There are several ways that healthcare companies are committing health insurance fraud. Examples of healthcare fraud include billing for services or supplies that were not provided, or billing Medicare for missed patient appointments, and altering CMS claim forms for higher payment amounts.. A successful prosecution of a health care provider that ends in a conviction can have serious consequences. The health care provider faces incarceration, fines, and possibly losing the right to practice in the medical industry. In Florida, it was reported that a physician was sentenced to 24 months incarceration and ordered to pay $727,000 in restitution fees for signing blank prescriptions and certificates of medical necessity for patients he never saw (Rudman, 2009). This is an example of the criminal liability that can result from healthcare fraud. In the case United States ex rel. Donigian v. St. Jude Medical agreed to pay $16 million to quiet allegations of paying...
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... 2.) Corporate Culture at HealthSouth………………………………………………... 8 c.) Following Directions for Failure……………………………………........ 9 d.) Faking corporate profits………………………………………………… 10 C.) The Impact on Stakeholders…………………………………………………………….. 10 3.) Employees and Executives……………………………………………………... 10 e.) Many Lost Jobs as a result……………………………………………… 10 f.) Top Level Management Complacency.………………………………… 11 4.) Investors and HealthSouth Stock……………………………………………….. 11 5.) HealthSouth Patients and Customers….………………………………………... 11 D.) Outcome and Fairness of Punishment…………………………………………………... 12 6.) 2003 SEC Civil Law Suit against HealthSouth………………………………… 12 g.) Charges of Fraud………………………………………………………... 12 h.) Inflated Earnings on Financial Statements ...…………………………... 13 7.) Punishment: Does it fit the crime? ...................................................................... 13 i.) CEO Richard Marin Scrushy’s sentence...……..………………………. 14 j.) Other HealthSouth executives sentence ………………………......... 14-15 E.) Conclusion ………………………………………………………………………….. 15-16 INTRODUCTION There have been many examples of CEO’s misdeeds in recent history but the most interesting of them is former HealthSouth CEO Richard Marin Scrushy. Scrushy was a charismatic leader who could get his employees to follow him...
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...Major Laws Concerning Fraud and Abuse Anna Afoakwa Health Information- Law and Ethics (Summer Quarter) Author Note: This assignment is being submitted as module 9 assignment Healthcare ethical behavior is an important topic in health industry. Ethics or moral behavior is the ground on which humanity stands for a compatible existence. The word ‘ethics’ means different to different people and is based on moral, philosophic and religious principles of the society in which it is practiced. All problems of life have solutions, but all solutions are not based on moral principles. Principles alone do not lead to ethical decisions; decisions without principles are ethically empty. Below are the seven major laws concerning fraud and abuse. The False Claims Act: imposes liability upon any person who knowingly submits or causes the submission of false or fraudulent claims for payment or approval. In the healthcare context, examples of conduct that can arguably lead to charges of violations of the statute include, but are not limited to: billing for medical services not rendered; misrepresenting the level of services rendered; falsely certifying compliance with federal laws; and submitting a claim for payment that is contrary to Medicare or Medicaid payment requirements. The Federal Anti-Kickback Statute: prohibits providers of services or goods covered by a federal healthcare program ("Federal Healthcare Program") from knowingly and willingly soliciting or receiving or providing...
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...Introduction Fraud and Abuse in the U.S. healthcare system is a serious problem. Health care fraud and abuse is a national problem that affects all of us either directly or indirectly. National estimates project that billions of dollars are lost to health care fraud and abuse on an annual basis. These losses lead to increased health care costs and potential increased costs for coverage. Specifically, health care fraud is an intentional misrepresentation, deception, or intentional act of deceit for the purpose of receiving greater reimbursement. Health care abuse is reckless disregard or conduct that goes against and is inconsistent with acceptable business and/or medical practices resulting in greater reimbursement (BlueCross BlueShield of North Carolina, n.d.). It is not only criminals defrauding the government and healthcare system. There are hospitals doctors and pharmaceutical companies who try to cheat the system. The types of people who commit these crimes are varied, from the highest levels of hospital administrators to one man doctors’ offices. These people can be very clever in the way that they operate. In fact to avoid arousing any kind of suspicion, they may set up complicated billing structures and try to cover their tracks. This can make it very difficult for health care fraud investigators to pursue a line of enquiry… False billing is one of the most egregious areas of health care fraud. Hospitals and physicians may bill Medicare for treatment, drugs...
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...Reporting Practices and Ethics Krystal Jackson Septemnber 10, 2012 HCS/405 Diana Schilling Large companies need the attention of investors, creditors, and banks to continue to be profitable. The information that these entities receive is product of the generally accepted accounting principles (GAAP) that are practiced by companies to create and release their annual finances. The financial statements allow the outside entities to judge the economic health of the company and from this decide if investments and larger lines of credit are wise. In the United States the Security and Exchange Commission enforce the GAAP although it is not actual law. The GAAP can be broken down into three sections which are assumptions, principles, and constraints. There are four assumptions declare that’s the business is a "separate entity" from its expenses and personal expenses are kept separate. The assumptions also discuss the form of currently that will be used in financial reporting as well as time periods that will be recorded in said statements. There are basic principles that are cost, revenues, principle, and disclosure and these principles require that the business reports what money is spent when something is acquired, and when it is earned and documented. The statements must be matched to the reported revenue and all information to make decisions on the company's finances must be disclosed. Lastly there are four constraints: objectivity, materiality...
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