Guest Author - Consuelo Herrera, CAMS, CFE
Being sick is a grievance, and being sick and abused is part of a despicable evil that knows no barriers when those engaged in this kind of fraud seek new avenues for illegal income. Many doctors are truly committed to delivering excellent services to their patients, however, wrongdoers driven by greed and disregard for human respect have gone far in their quest for easy earnings.
The following examples describe some of the schemes through which health care fraud is committed: Doctor Doe charged for services not rendered to patients and defrauded Medicare by submitting false and fraudulent invoices for consulting and medical director services.
Another doctor lied to insurers about which services he was providing to patients, defrauding the insurers of more than $1.2 million. Investigators contend that “false claims like these underlie many of our health care fraud cases, and lead to higher health care costs for everyone.” The same individual and other providers were engaged in the other schemes, which follow:
o Submitting false claims to federal and private health insurance companies. One organization billed in excess of $3 million and was paid in excess of $1.275 million from various health care benefit programs for services it never performed or provided.
o Billing for more advanced procedures when in fact patients only received massages.
o Paying kickbacks to physicians in return for patient admissions.
o Paying surgeons hundreds of thousands of dollars per year for consulting contracts and lavished them with trips and other expensive perquisites in exchange for using the companies’ products exclusively.
o Shipping supplies to Medicare beneficiaries that were never ordered by their physician.
o Contacting Medicare beneficiaries and requesting their personal information with the excuse that it had been lost.
o Modifying the billings for the services that were actually performed in order to maximize the reimbursement from the insurance companies.
Here is one of the most ignominious cases. A former dermatologist was sentenced to 22 years in prison, ordered to pay $3.7 million in restitution, forfeit an additional $3.7 million, and pay a $25,000 fine for performing 3,086 medically unnecessary surgeries on 865 Medicare beneficiaries. The dermatologist was found guilty of health care fraud and false statements; the doctor routinely falsely diagnosed patients with skin cancer in order to bill Medicare for expensive and unnecessary invasive surgeries.
One of the Worst Cases
The Department of Health and Human Services and The Department of Justice issued the Health Care Fraud and Abuse Control Program Annual Report For 2007. It highlights an important program launched as a result of a scheme in which fraudsters admitted submitting approximately $5.3 million in fraudulent claims to Medicare. In addition, one of the participants in the fraud ring was a phlebotomist who administered unnecessary drugs intravenously to HIV patients.
These are shocking schemes. According to the FBI, the individuals implicated admitted that their organizations were operating for the purpose of defrauding Medicare and that the treatments for infused or injected drugs billed to Medicare were not medically necessary. Each of the defendants also admitted that all of the patients at the clinics were participants in the fraud. The defendants admitted that they, or their co-conspirators, entered into kickback arrangements with these Medicare beneficiaries whereby the beneficiaries were paid every week in exchange for their Medicare billing information, which allowed the clinics to submit the fraudulent bills.
To obtain all the cash necessary to pay the patients, one of the participants admitted that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee. The defendants admitted that none of the Medicare beneficiaries needed the injection and infusion treatments billed to Medicare by the clinics.
The Medicare Fraud Strike Force was implemented to prevent these instances from happening. It implemented a targeted criminal and administrative effort against individuals and health care companies that fraudulently bill the Medicare program. The Strike Force was structured in 5 teams with criminal prosecutors, a licensed nurse, federal and state agents, and local police investigators.
Actions to Prevent Health Care and Medicare Fraud
The importance of keeping proper records applies to each and every business. The schemes described could have been prevented only if proper controls were in place and applied. The question here is: Where were those in charge of reviewing and ensuring that Medicare and health care providers were paid for services actually rendered?
Investigations, audits and evaluations reveal vulnerabilities or incentives for questionable or fraudulent financial practices in agency programs or administrative processes, which means that changes must be implemented to improve these weaknesses. Training attorneys, paralegals, investigators, and auditors in the investigation and prosecution of health care is a must.Forensic accountants are part of the investigation team that successfully has brought these criminals to justice. Read: Fighting Fraud and Its Pervasive Effect
Stopping fraud is each one's responsibility!