Question

What are some strategies in health care to prevent financial fraud? Provide details.

What is the effect of fraudulent activity on the organization? Meaning, why are we talking about fraud in an accounting class?

Answer 1

ANSWER-1)

The main types of health care fraud which are particularly common and strategies to prevent them are discussed as below:

1) Diversion of patient fee revenue at point of service: To avoid this type of fraud, the administration should fill out receipts with the amount noted in numbers and in words; and moreover there need to have a higher level of authorization for the release of refunds.

2) Diversion of accounts receivable, or checks submitted by firms or patients to pay debts owed on their accounts. Such type of fraud can be avoided by segregation of duties, i.e. having one individual open the mail or handle customer cash, while a different individual will be held responsible for cash deposits and follow-up collection. Moreover provide monthly statements to the clients and asking employees to take regular leaves to deter the fraud.

3) Collusion between hospital purchasing agents and suppliers wherein the purchasing clerks and accountants can collude with suppliers for making a deliberate overpayment for an order. It can be avoided with improvements in financial and administrative systems so to deter employees from attempting these types of fraud.

4) For the avoidance of inadvertent fraud, health care providers should maintain accurate practices in billing for the avoidance of any inaccuracies such as overcharges or claims for undelivered or undocumented services

5) The administration should maintain accurate records to ensure that the treatments in future produce the best possible outcomes for patient. An updated record helps in defending against malpractice suits.

6) Health care industry can avoid frauds by observing and creating a compliance plan, an activity that the Affordable Care Act mandates to remain eligible for the Medicare and Medicaid.

As per policy we have to answer first question