While there are many honest health care providers, there are some who found illegal ways to take advantage of the medical insurance systems. Some settings provide a better environment for them to commit their crime than others. For example, medical facilities that offer special care services, such as nursing homes and psychiatric hospitals provide the ideal ground for unscrupulous criminals to charge for services and/or products that are not provided or provided at substandard levels and bills for higher level of services.
The U.S. spends more than $2 trillion on healthcare annually. At least three percent of that spending — or $68 billion — is lost to fraud each year. (National Health Care Anti-Fraud Association, 2008). Therefore, health care fraud provides the financial incentive to commit the crime. For example, health care fraud amounts to between $125 billion and $175 billion annually, including everything from bogus Medicare claims to kickbacks for worthless treatments and other services. (Thomson Reuters, 2009).
One of the challenges is that most Americans cannot interpret their medical bills. It is estimated that 40 percent of Americans do not understand their medical bills or explanation of benefits (EOB) statements enough to know what services they are paying for, why they owe the amount invoiced and if the amount is correct.
To aggravate the situation, when it comes to services to the elderly, the patients do not have control over their medical services and finances. This facilitates the crime, since the party being invoiced does not know if the services being provided are actually being provided. How would the insurance company know if the “therapy” is placing a patient that suffers of Alzheimer in front of a TV to watch a movie. Unfortunately, many health care fraud schemes come to light after a patient reports strange charges or other red flags which is too late.
What facilitates health care fraud in nursing homes and psychiatric hospitals?
Unscrupulous providers can operate their schemes in volume because the patients are all under one roof.
Many patients in special care facilities do not have the legal capacity or ability to be responsible for their own financial affairs and, consequently, are not as likely to report fraud involving their care.
Even when abusive practices are detected and prosecuted, repayment is rarely received from wrongdoers because they usually go out of business or deplete their resources so that they lack any resources to repay the funds.
Patient personal funds are often controlled by the facility’s administration and are an inviting target for embezzlement.
Type of health care fraud
False claim schemes are the most common type of health insurance fraud. The goal in these schemes is to obtain undeserved payment for a claim or series of claims. False claims include the following schemes:
Billing for services, procedures, and/or supplies that were not provided.
Misrepresentation of what was provided; when it was provided; the condition or diagnosis; the charges involved; and/or the identity of the provider recipient.
Providing unnecessary services or ordering unnecessary tests.
Other illegal procedures include:
Unbundling of claims: Billing separately for procedures that normally are covered by a single fee. An example would be a podiatrist who operates on two toes and submits claims for two separate operations.
Upcoding: Charging for a more complex service than was actually performed. Another example is when a health care provider charges for more expensive equipment than was delivered.
Miscoding: Using a code number that does not apply to the procedure.
Kickbacks: Receiving payment or other benefit for making a referral. Kickbacks can distort medical decision-making, cause over-utilization, increase costs, and adversely affect the quality of patient care by encouraging physicians to order services or recommend supplies based on profit rather than the patients’ best medical interests.
Health care fraud doesn’t just cheat the system. It cheats all taxpayers of lower medical insurance cost.
What are some of the signs to look for?
Duplicate billings for the same medical service or device.
Evidence of over medication or under medication.
Evidence of inadequate care when bills are paid in full.
Problems with the care facility: poorly trained, poorly paid, or insufficient staff; crowding; inadequate responses to questions about care.
Unexpected or apparently unnecessary medical treatment or equipment.
Excessive diagnostic testing.