Question

In: Accounting

what is the economic impact of healthcare fraud and how do you feel about it?

what is the economic impact of healthcare fraud and how do you feel about it?

Solutions

Expert Solution

The majority of health care fraud is committed by a very small minority of dishonest health care providers. Sadly, the actions of these deceitful few ultimately serve to sully the reputation of perhaps the most trusted and respected members of our society-our physicians.

Unfortunately, the stock in trade of fraud-doers is to take advantage of the confidence that has been entrusted to them in order to commit ongoing fraud on a very broad scale. And in conceiving fraud schemes, this group has the luxury of being creative because it has access to a vast range of variables with which to conceive all sorts of wrongdoing:

  • The entire population of our nation's patients;
  • The entire range of potential medical conditions and treatments on which to base false claims; and
  • The ability to spread false billings among many insurers simultaneously, including public programs such as Medicare and Medicaid, increasing fraud proceeds while lessening their chances of being detected by any a single insurer.

The most common types of fraud committed by dishonest providers include:

  • Billing for services that were never rendered-either by using genuine patient information, sometimes obtained through identity theft, to fabricate entire claims or by padding claims with charges for procedures or services that did not take place.
  • Billing for more expensive services or procedures than were actually provided or performed, commonly known as "upcoding"-i.e., falsely billing for a higher-priced treatment than was actually provided (which often requires the accompanying "inflation" of the patient's diagnosis code to a more serious condition consistent with the false procedure code).
  • Performing medically unnecessary services solely for the purpose of generating insurance payments-seen very often in nerve-conduction and other diagnostic-testing schemes.
  • Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments-widely seen in cosmetic-surgery schemes, in which non-covered cosmetic procedures such as "nose jobs" are billed to patients' insurers as deviated-septum repairs.
  • Falsifying a patient's diagnosis to justify tests, surgeries or other procedures that aren't medically necessary.
  • Unbundling - billing each step of a procedure as if it were a separate procedure.
  • Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.
  • Accepting kickbacks for patient referrals.
  • Waiving patient co-pays or deductibles for medical or dental care and over-billing the insurance carrier or benefit plan (insurers often set the policy with regard to the waiver of co-pays through its provider contracting process; while, under Medicare, routinely waiving co-pays is prohibited and may only be waived due to "financial hardship").

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