...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...
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...Healthcare Fraud and Abuse Under HIPPA, “fraud is defined as knowingly, and willfully executes or attempts to execute a scheme… to defraud any healthcare benefit program or to obtain by means of false or fraudulent pretenses, representations, or promises any of the money or property owned by…any healthcare benefit.” Unlike Fraud, abuse is, “means that are improper, inappropriate, outside of acceptable standards of professional conduct or medically unnecessary.” Health care fraud arises from an individual or group of individuals filing of a dishonest health care claim in order to turn it into a profit. Abuse; however, is harder for the investigator to identify and establish if the act was committed knowingly, willfully, and intentionally. Healthcare industry is one of the fastest growing sectors of the US economy; almost 10% of the US’s national GDP is consumed by the health care industry. According to Forbes’s report, the US National Healthcare expenditure of 2012 was nearly $3 Trillion. According to the National Healthcare Anti-Fraud Association, nearly $60 Billion is lost to healthcare fraud each year. The healthcare industry is an enormous market; therefore, making it easier for healthcare providers to take advantage of the American population. This paper will focus on why fraud and abuse occurs, different types of fraud, example cases of fraud and abuse, impact to present day healthcare industry, and potential solutions to fixing and preventing fraud and abuse from occurring...
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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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... | |Health Care Fraud and Abuse | | | | | |Tannisia Brown | |6/17/2012 | | | Health care fraud is the filing of dishonest health care claims to obtain a profit and is considered a white collar crime. Health care abuse is when someone overuses or misuse services. Both, Health care fraud and abuse, in the United States is an ongoing issue and is costing the United States government billions of dollars. Every time a fraudulent act is perpetrated the insurance company passes the cost to its customers. Due to the high volume of health care fraud statistics shows that 10 cents to every dollar spent on health care goes toward...
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...The United States faces a long battle to repair its economy. Issues like unemployment, the federal budget deficit, immigration, gun control, etc, seem to create never ending discussions without any resolution. The healthcare system is one of the many issues that have been affected by the economic crisis and according to president Barrack Obama, reform is a must. Besides all economic factors affecting the healthcare system, the system has been blamed for inefficiency, excessive administrative expenses, inappropriate waste, and fraud and abuse. Many Americans today are having trouble keeping up with the continue rise of healthcare costs and many firms cannot afford to provide coverage to their employees. Although the government is working on a reform for the healthcare system, many questions are still pending to be answered. One question that has raised polemic discussions around the country is: should the U.S. government provide healthcare to all citizens? While many feel there should be a simple yes or no to this questions, many others realize that we do have to consider any potential ethical, moral or legal issues that can cause collateral damage to our economy and also the healthcare system. President Obama has been focusing on a reform for the healthcare system prior to his first election and to give a little overview of his reform, according to The White House (2013), see table below: Overview of Health Reform “It makes insurance more affordable by providing the largest...
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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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...HEALTH CARE: SHOW ME THE MONEY By defining health-care fraud, observers should be aware that hard-earned money is wasted annually. Consequently, more precautions should be enforced to safeguard citizens’ tax dollars. Simply put, health-care fraud is the submission of false claims by individuals acting with disregard to the truth (Lovitky, 1997). Individuals, empowered to be health care providers, can be guilty of committing health care fraud, as well as major corporations (Sparrow, 1996). According to former Attorney General of the United States, Janet Reno, states health-care fraud ranks second of the top priorities of the Department of Justice, just behind narcotics interdiction (Lovitky, 1997). Health-care fraud typically involves violations by way of: overutilization; up coding; billing for services not provided; failing to provide necessary services; and filing false cost reports (Lovitky, 1997). Fundamentally, overutilization is defined as providing medical services not needed or required. In the process of overutilization, fraud takes place when more services are provided than what the situation calls for, or when medical services are never performed and still billed to the insurance company (Lovitky, 1997). Up coding, according to Lovitky (1997), involves Current Procedure Terminology (CPT). The CPT code accurately describes medical, surgical, and diagnostic services and it is designed to make medical services and procedures consistent among physicians, coders...
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...| Health Law Essay | Health Law A Regulated Enterprise | Introduction to Health Law and PolicyProfessor Voss | By Kimberly Causey | 1/11/2015 | Health Law A Regulated Enterprise The great Statesman Sir Winston Churchhill clearly stated, “If you have ten thousand regulations you destroy all respect for the Law”. When Law Regulators at all tiers interpret various components of the law, the interpretation can convey an unruly mixture of complexities. Likewise, Health Law can be encountered in various aspects on both the State and Federal levels. Thus creating a mixture of regulations by all levels of government. For example, the obvious is the overlapping of police power between the state laws and the preemptive decisions made by which the federal law prevails. Overall, applicable laws have continuously exemplified complexity, specifically in Health Law. Yet, Regulators continue to redefine the laws that are created both on State and Federal levels. For this purpose, I will identify present a mixture of fundamental differences that are encountered at any tier level. Regulations can frequently change in producing guidance about compliance of expected outcomes. What is reasonable and practical at times can produce countless interactions and inconsistency among regulators. For instance, Hall and Showalter both mention their concerns for quality, autonomy, access and cost which will be discussed. Hall presents a great article on “What is Health Law?” He further...
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...Dealing with Fraud Liquid Professor Beharry Health Care Policy, Law, and Ethics March 18, 2013 Abstract This paper will evaluate how the Healthcare Qui Tam affects health care organizations while providing (4) examples of Qui Tam cases that exist in a variety of health care organizations. Other responsibilities discussed, are devising a procedure for admission into a health care facility that upholds the law about the required number of Medicare and Medicaid referrals; the ability to recommend a corporate integrity program that will mitigate incidents of fraud and assess how the recommendation will impact issues of reproduction and birth. The know how to devise a plan to protect patient information that complies with all necessary laws. Evaluate how the Healthcare Qui Tam affects health care organizations. The Healthcare Qui Tam affects health care organizations in that well over more than 450 hospitals across the country were the subject of Medicare fraud investigations. Whether or not Medicare violations are found, the costs of responding to an investigation can be significant. Westchester Medical Center of New York, being investigated for possible health care fraud and violations of anti-kickback laws, received a subpoena for extensive records in some thirty-seven categories going back to 1997. Millions of dollars may be spent in legal fees and other costs associated with the investigation (e.g., hiring or reassigning staff to assist with compiling...
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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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...Electronic Medical Records (EMRs) in the U.S. started in the 1960s in a few health care providing institutions. In the 1970s and 1980s, a number of hospitals and clinics across the U.S. adopted the use of limited EMR technology (Carter, 2001) In the early 1990s, heeding recommendations from the Institute of Medicine (IOM) landmark study, the U.S. government set an ambitious goal for all physicians to computerize patient records by the year 2000 (Dick, R.S., Steen, E.B., & Detmer, D.E. 1997) Due to patients’ privacy issues, less streamlined and often conflicting software technologies, and multiple other barriers in EMR technology adoption, this goal could not be achieved. The adoption of EMR technology started to gather some momentum since 2004 when President George Bush outlined detailed plan to ensure access of electronic health records by all Americans by 2014 (Bush, Executive Order 13335) To achieve this goal, President George Bush created a new, sub-cabinet level National Health Information Technology Coordinator position at the Department of Health and Human Services to implement health IT infrastructure nationwide. The biggest push targeted towards promoting the adoption of EMR technology came with the passage of the American Recovery and Reinvestment Act (ARRA) 2009 by the U.S. Congress which appropriated $19 billion dollars government assistance to jump start the adoption of EMR technology by physicians, clinics, and hospitals. The healthcare reforms highlighted in the ARRA include...
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...statements by using GAAP. GAAP also aids in health care to establish creditworthiness of the business or organization and earn a rating of financial strength. GAAP allows business to use actual accounting. By using GAAP companies can report outstanding revenue. A company has the ability to show an acquisition or money that is guaranteed but not yet received, such as a government grant, which provides a higher net worth than if the cash accounting method were used. Monies defaulted by clients or patients is may not be included. This process is called a contra asset and is reported as a realizable value. According to the National Law Review, with the increased focus by the Obama Administration on financial crimes, health care fraud, and corporate fraud, corporate compliance and ethics programs have never been more important (2010). This article discusses the importance of effective corporate compliance programs and ethics programs. These Guidelines will help permit reductions of a subsequent sentence, culpability score, for organizations that have shown to have effective compliance and ethics program in place at the time of the offense, since 2004. This automatic reduction/credit will be inapplicable if high-level personnel in the organization condoned or willfully participated, or were willfully ignorant of the offense(s) (2010). Mismanaged care increases the risk for potential or real ethical issues. The American Nurses Association (ANA) published a brochure on...
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...Linerode Health Care Expenditures in the United States Introduction The topic of healthcare spending in the United States (U.S.) is a controversial one, and most often, the populations’ opinions doesn't always agree with those of policymakers. Getting health care spending under control is vital for the economic health of the government and the people of the United States. What makes healthcare expenditures so disgraceful is the large amount of money the government spends on healthcare each year versus the number of people without health care. The amount of money the U.S. government spends on health care each year doubles that of any other nation. Despite the large amount of government spending, a large percentage of Americans have no healthcare coverage. This shows inefficiency in the system that needs immediate attention. The purpose of this paper is to explain healthcare expenditures suggest changes for the future that are necessary for Americans to receive reasonably priced health care. Current level of national healthcare expenditures The current level of national healthcare spending is at an all time high and expected to steadily climb. The U.S. Centers for Medicare & Medicaid Services (CMS) explain that National Health Expenditures (NHE) “rose 4.0% to $2.5 trillion in 2009, or $8,086 per person, and accounted for 17.6% of Gross Domestic Product (GDP)” (The U.S. Centers for Medicare & Medicaid Services, 2012). The rise in health care expenditures...
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...Medicare Fraud: The History, Incidence, Costs and Institutional Remedies INTRODUCTION In 1965, President Lyndon B. Johnson signed the Medicare Act into law. The purpose was to provide healthcare to individuals the age of 65 or older or individuals under the age of 65 diagnosed with specific medical conditions (Center for Medicare and Medicaid Services, 2013). The original intent was to provide immediate payment to those providing medical services for the less fortunate. The Medicare Act has since been revised to meet the current needs of the American population as well as the United States economy. In part, these revisions included identifying, combating, establishing punishment (criminal laws) and prevention for Medicare Fraud. This paper will provide a brief overview of the Medicare fraud history, incidence, costs and institutional remedies. MEDICARE FRAUD: HISTORY AND DEFINITION Fraudulent activities against the government were first addressed during the Civil War. The False Claims Act (qui tam statute), also known as the Lincoln Act, was passed during this time frame. The intent was to prevent the Union Army from being a victim of supplier fraud. Citizens were given, “the ability to file suits on behalf of the US government whenever they spotted fraud” (Medicare Fraud Center, 2015). The citizens were rewarded with a portion of the monetary fines (issued to the defendant) for addressing the crime. Currently, similar rewards remain in effect for reporting Medicare...
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...Medicare Fraud: The History, Incidence, Costs and Institutional Remedies John H Everett Wayland Baptist Medicare Fraud: The History, Incidence, Costs and Institutional Remedies What is Medicare fraud? ("F&A," 2011, p. 1) states “Medicare fraud happens when Medicare is billed for services or supplies you never got. Medicare fraud costs Medicare a lot of money each year.” What is Medicare abuse? ("F&A," 2011, p. 1) defines this as “Abuse occurs when doctors or suppliers don’t follow good medical practices, resulting in unnecessary costs to Medicare, improper payment, or services that aren’t medically necessary.” In reviewing the definitions of fraud and abuse by Medicare it may be hard for some people to understand if they do not live in the healthcare world daily. In an effort to help shed some light on this, we will look at the history of Medicare fraud. It has been around since the Civil War, when the False Claims Act (FCA) was created. It was also called the Qui Tam Statue meaning “he who sues for the king as himself.” ("FCA," 2011, p. 1) “The law was targeted at stopping dishonest suppliers to the military Union military at a time when the war effort made it all but impossible for the government to investigate and prosecute the fraud itself. Today it serves a similar purpose because of the enormous size of the federal government and the variety or programs under which it expends taxpayer funds.” In 1986 the FCA has been revised over the...
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