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NEW ORLEANS, LOUISIANA
NOVEMBER MBER 13-16, 1994
By Susan E. Clarke
Meeting the Challenge of Change was the theme for this years NHCAA Training Conference and Workshops. Professionals from throughout the United States gathered at the Hyatt Regency in downtown New Orleans for three days of listening and learning. The John Cooke Fraud Report wishes to thank the NHCAA and the organizers of this highly educational seminar for allowing us to participate.
The NHCAA defines health care fraud as “an intentional deception or misrepresentation that the individual or entity makes knowing that the misrepresentation could result in some unauthorized benefit to the individual, or the entity or to some other party.” But whether the deception involves making false statements, overbilling or billing for services or procedures not rendered, misrepresenting the nature or dates of service, performing unnecessary services or any other intentional misrepresentation or deliberate omission affecting payment of benefits, such activities cost the public and private health care sectors enormous amounts of money each year. It is difficult to say exactly how much is lost each year to health care fraud, but most estimates place the figure somewhere between three and ten percent of the total amount spent each year on health care.
NHCAA primarily focuses on fraud committed by health care providers. Although most providers are honest and ethical, approximately two percent deliberately and systematically set out to defraud the system. Sometimes they act alone, sometimes in concert with others. Those who do engage in fraudulent activity usually do so consistently across the board; if they are defrauding one agency, they are usually defrauding all agencies they deal with.
One of the topics of concern to NHCAA members discussed at the organization’s annual training conference in New Orleans was FOREIGN MEDICAL CLAIMS FRAUD – an area which presents a special challenge to the health care professional. Even if everything is above board on a foreign claim, it is difficult to verify the claim information when different customs and languages are thrown into the mix. This difficulty can be compounded, either intentionally or unintentionally, by lax record-keeping in other countries.
Foreign claims should be reviewed on a regular basis and certain types of services, particularly emergency or accidental injury cases, should receive special scrutiny. The minimum steps in evaluating foreign claims
are: 1) reviewing past claims for similar medical problems; 2) reviewing any follow-up treatment provided in the US; and 3) interviewing patients to determine if the claim was accurately billed.
Another area of concern is DURABLE MEDICAL EQUIPMENT FRAUD. One notorious DME salesman, Mark Mickman, was a former rent-to-own salesman and a former aluminum siding salesman who decided to sell durable medical equipment. He started a variety of companies under several different names. His companies specialized in telephoning elderly people and convincing them to accept “free” medical supplies, which were then billed to Medicare. As authorities closed in, Mickman would simply open a new company and go on. Eventually, however, he was a little too convincing when he sought to get out of a tight legal spot by claiming insanity. The judge believed him and ordered him confined to an institution despite Mickman’s later claims to the contrary.
DME fraud often involves billing for a higher priced item while supplying something costing far less. In one infamous scam, patients were provided with recliner chairs while carriers were billed for “chair-lifts.” A current scam bills carriers for “body jackets” but patients receive nothing more than a wheelchair restraint. Another popular scam (sometimes referred to as June Allyson Syndrome) provides adult diapers but charges carriers for “incontinent care kits. ” These “kits” are often provided to people who don’t want or need them.
HOME HEALTH CARE can be a cost effective option; or it can be a nightmare because of the many opportunities for fraud. Questions to keep in mind when evaluating these services include: 1) Does the agency receive kickbacks from anyone for providing the service? 2) Who is providing the service? Do unlicensed personnel perform professional services? 3) Is the patient’s physician involved in the treatment plan? 4) Is the care plan generic or individual to the patient? 5) Are supplies and procedures consistent with the diagnosis? A negative answer to any of these questions can indicate a need for close scrutiny.
“Chiropractic Medicine: The Good, The Bad and The Ugly,” was the suggested title for a presentation on CHIROPRACTIC FRAUD. According to Charles DuVall, Jr., D.C., chiropractors are often taught to sell the need for their services. In DuVall’s opinion, chiropractic treatment based on unsubstantiated statements is fraud, while treatment based on philosophical theory, with no scientific basis or clinical fact, can be characterized as quackery.
PHARMACY FRAUD is another growing concern to health carriers. Although the motives for pharmacy fraud may vary, the large amount of money involved often plays a large role. Such fraud nay include short-counting the number of pills, inflating the quantity billed, splitting prescriptions to increase dispensing fees, substituting generic drugs for brand names and billing based on a smaller size package. (See related article in this issue, page 11.)
EMPLOYEE FRAUD does not st,cenm lo he a big problem according to it survey of NHCAA members. The costs of employee fraud were generally less that $10,000. Fewer than ten percent of those surveyed had costs of more than $250,000.
Diagnostic procedures–such as ultrasound, videofluoroscopy, the ever-popular MRI, EMG, and a variety of laboratory tests–are performed for several reasons. The provider may wish to identify or determine the nature of a disorder; he may want to justify the need for treatment; or he may want to protect himself by ordering diagnostic procedures, a practice often known as defensive medicine. One review company has found that more than 78% of tests and procedures billed were never performed, were performed improperly or were medically, unnecessary. This kind of misuse can be termed DIAGNOSTIC PROCEDURE FRAUD.
The IMPACT OF MANAGED CARE ON HEALTH CARE FRAUD is difficult to predict. Traditional frauds such as billing for services not rendered and manipulation of diagnoses and procedure codes are expected to continue. In addition, new schemes are likely to emerge, some of which may be harder to detect. Some of these may include kickbacks, underutilization of services, falsification of credentials and use of unlicensed providers.
Health care fraud presents a challenge to carriers; it seems there is always something new. The very scope of health care fraud makes it difficult to fight. The federal government attempted to address the issue via the Health Care Reform Act. Some progress was made with the passage of the Violent Crime Control and Enforcement Act of 1994. At the same time, state governments are addressing the issue. At least 20 states have passed laws in the last couple of years to fight health care fraud and abuse.
Health care fraud will probably never be stopped entirely. The presentations at the NHCAA training seminar pointed out that there is just too much opportunity and too many creative criminal minds.
© 1995 John Cooke Fraud Report