Most people associate white collar crime with blockbuster court cases like Enron. But did you know there’s another type of white collar crime that is being perpetrated thousands of times daily and costing us an estimated 272 billion dollars a year? The crime is healthcare fraud and it is rapidly growing more popular, attracting novice to seasoned criminals, and spreading like cancer across our country. The devastating effects of this crime wave are being felt by every taxpayer. We are all victims and paying the price through higher healthcare premiums and out-of-pocket expenses, reductions in our coverages, faulty medical care, and worse.
Despite efforts to hasten its growth, healthcare fraud is rapidly spreading. Although policies have been put in place to reduce healthcare fraud, we, the taxpayers, may be the most effective deterrent. There are many things you can do to help prevent healthcare fraud, which we will cover later. First, let’s dig into exactly what is happening and why.
Watch: What should you do if investigated for healthcare fraud?
Healthcare fraud lawyer, Robert Malove explains what do if investigated for healthcare fraud.
Healthcare Fraud: What to Look for?
There are many types of healthcare fraud, but the most common and costly is fraud committed by dishonest service providers. Who are they? Doctors, nurses, equipment providers, pharmacists, etc., anyone who orders or provides healthcare services, supplies or treatments. That’s right, the doctors that we depend upon and trust are often the culprits responsible for these types of crimes. Anyone can be a victim, that’s why our tips for avoiding healthcare fraud later in this post are so important for you to read and follow.
There are many ways unscrupulous service providers commit fraud. Here’s some of the most common illegal practices:
Fraudulent Practice #1: Upcoding
This is when a service is provided or a diagnosis is made, but the provider bills insurance for a more expensive service, or more serious diagnosis. So say you went in for a mammogram and your doctor then turns around and bills your insurance, or Medicare, for a more expensive type of mammogram and, or, additional tests. These tests will show up and become part of your permanent medical record. You could end up receiving care you don’t need based upon these types of fictitious charges.
Fraudulent Practice #2: Performing Unnecessary Treatments or Procedures
This occurs when a service provider performs an unnecessary treatment or procedure on you solely to have an excuse to bill insurance. Yes, as repulsive as this practice is, it happens all the time, from diagnostic tests to surgeries. Fully half of all primary care physicians believe their patients receive “too much care”, or too many treatments. We are being over-tested and treated to our own detriment, financially, physically and emotionally. Many of the tests that are being overused are potentially harmful to the body, such as X-rays and CT scans. Both expose you to radiation, which too much of is known to cause cancer.
Here are just some of the tests procedures that we are frequently over-prescribed:
- EKG’s and Non-Stress Tests for Heart Disease
These tests which measure the electrical activity in your heart and are effective at discovering heart disease. Many people have these tests performed every year. Because the tests are not entirely accurate, this often leads to additional follow up tests and treatments, some of which are very invasive and costly.
- Imaging Tests Performed on the Lower Back
Most of us suffer from lower back pain at some point. However, most lower back pain is temporary and will go away on it’s own in a short period of time. Imaging tests, like CT scans, X-rays and MRIs are immediately often prescribed when a patient complains of low back pain. These all expose you to radiation and are generally not necessary. Most back pain will go away on it’s own within a couple of weeks.
- MRIs and CT Scans for Headaches
Many people become fearful when they suffer from severe or repeated headaches. They ask for a scan to indicate whether they have brain cancer or a tumor. Doctors comply, often to avoid getting sued in case the test is positive. This leads to many misdiagnoses and further expensive and potentially harmful tests. A CT scan to the head exposes you to 15 to 300 times the amount of radiation as a chest x-ray! Yikes! That’s a big dose, especially when a thorough neurological exam and a health history assessment are generally all that’s needed.
- Bone Density Scans for Women who have a Low Risk of Osteoporosis
Women are often routinely screened for osteoporosis, or bone loss, using a Dexa scan. This test detects osteoporosis, but also mild bone loss, commonly known a osteopenia. When osteopenia is diagnosed drugs are often prescribed to treat it, including Fosamax and Boniva. These drugs have considerable risks and side effects, including pain in the throat, chest, bones, joints or eyes, muscle pain, abnormal heart beats, heartburn, difficulty swallowing, thigh fractures, etc. Plus, it’s not even clear that they are effective for treating osteopenia.
- Antibiotics for Sinusitis
You’ve probably suffered at least one sinus infection in your lifetime. That annoying pressure in the nasal cavities, headache and often a runny nose are unhappily familiar complaints. Did you know that most sinus infections are caused by viruses and therefore antibiotics are useless against them? However, if you show up at your doctor’s office complaining of those symptoms you most likely will walk out with a prescription for an antibiotic. You may think there’s no harm in taking an antibiotic when you don’t need it, but you’re wrong. Antibiotics can cause a variety of side effects and overuse can cause bacteria that are resistant to antibiotics to flourish, making you and everyone else more vulnerable to antibiotic-resistant infections.
- PSA Tests for Prostate Cancer
It seems like every other man over 60 is diagnosed with some sort of prostate problem, however, only 3% of men die from prostate cancer. A PSA test is a blood test that looks for a protein in the blood that is secreted by the prostate gland. High levels of this protein indicate possible prostate cancer. Positive PSA tests frequently lead to over-diagnosis and entail more tests and biopsies which can lead to incontinence and impotence. A positive PSA may not indicate prostate cancer. If there is cancer, repeated biopsies can spill lethal cancer cells into the bloodstream and the lymphatic system, rapidly spread it. Doctors see dollars signs in men’s prostates. Over 90% of physicians who recommend treatment for prostate cancer receive a commission for each treatment their patient receives.
- Mammography for Breast Cancer
A cause of much debate, many experts believe that the overuse of mammography is leading to the over-diagnosis of breast cancer. Studies have shown that more frequent screenings lead to an increase in diagnoses, but no decrease in deaths rates from the disease. In fact, many of the tumors being found are small and perhaps not as detrimental to the body as some of the treatments, including biopsies, lumpectomies, radiation and drugs like Tamoxifen which has a host of side effects including an increased risk of uterine cancer.
These are just some of the thousands of medical tests and procedures that are being over-prescribed often in the name of profits today. Before you submit to a test or procedure make sure it is absolutely necessary. When in doubt, always seek a second opinion.
Fraudulent Practice #3: Miscoding to Cover Uncovered Treatments
In this practice a practitioner will code or mislabel a treatment that is not covered by insurance with one that is. This happens a lot with procedures that are purely cosmetic, like claiming a nose job had to be performed because of breathing problems or a deviated septum, or controversial procedures that are not yet approved. This can lead to doctors using unapproved treatments (with unknown side effects) on us as well as increased insurance rates.
Fraudulent Practice #4: Purposely Misdiagnosing a Patient
Here practitioners purposely misdiagnose patients, generally claiming their illness or injuries are more serious than they actually are, so they can bill for more expensive treatments and procedures. Unfortunately, the elderly and mentally disabled make easy prey for these schemes, as they are less likely to question a doctor’s diagnosis. An erroneous diagnosis, if recorded in your permanent health records, can cause you to receive inappropriate or inadequate care.
Fraudulent Practice #5: Unbundling
This occurs when a provider bills separately for each item that occurred within one procedure, to purposely inflate the cost of the procedure. Let’s say you had a hysterectomy. Instead of billing for a hysterectomy the practitioner breaks the operation down into all of it’s different parts and bills for each part separately. Unbundling can easily double the cost of a procedure!
Fraudulent Practice #6: Kickbacks, Taking Money for Patient Referrals
You pat my back, I’ll pat yours. Another unseemly practice, practitioners refer patients to each other, in exchange for money or gifts. Not only does this potentially prevent you from receiving the best care, but often referrals are made for procedures, test or services you don’t even need! This can be a hard fraud to uncover as perpetrators cleverly disguise payments in the form of gifts, trips, etc.
Fraudulent Practice #7: Billing for Services that were Never Rendered
Using real patient information, (often stolen), practitioners bill insurance for services, procedures, and supplies that were not provided. You may have seen the headlines, X amount of medical records were stolen from Y hospital. There’s a reason for this. Stolen medical records are more valuable to thieves than credit card numbers these days. Using stolen medical records thieves ring up thousands in phony charges.
These are just some of the most common practices being routinely committed by healthcare providers, but they hardly account for the entirety of healthcare fraud.
Healthcare Fraud: Irresistible to Crooks and Providers alike
Alarmingly, the healthcare fraud industry has become so alluring that criminals from all sorts of other illegal enterprises are jumping on the bandwagon. Drug dealers reportedly like that the financial rewards are greater and the punishments less severe than their previous line of work. Mafia and gangs from many large cities are getting involved. Fraud detectives busting bogus clinics often find stockpiles of weapons.
Fueled by a growing epidemic of prescription pill addiction, pill mills have been popping up across the country. In this scam, a clinic or doctor’s office becomes a prescription writing factory and/or takes prescription pills and resells them on the streets. In Florida, the undeniable capital of healthcare fraud, it’s believed that pill mills were responsible for seven deaths a day in 2010! “Pain Management Clinics” proliferated and over 900 existed in Florida in 2010, that number dropped to 367 in 2014 due to a statewide pill mill crack down.
Healthcare fraud cases involving pharmacies have quadrupled in the past five years. From billing Medicare for more expensive drugs than those that are actually provided, to bribing healthcare workers for leftover pills to resell, pharmacists are getting in on the action.
Even ambulances and ambulance workers have found a way to scam the system. By offering patients kickbacks for pretending they can’t walk, thus allowing them to qualify for “emergency” pick ups, which the ambulance company can charge to Medicare for $400 a pop!
Healthcare Fraud: Why it’s Happening
The simple answer is greed of course, but it’s more complex than that. Part of the problem is the opportunity. Total healthcare spending is over $2.7 trillion a year in America or 17% of our Gross Domestic Product. With so much money flowing through the healthcare system the opportunities, and temptations, for fraud are almost limitless. The healthcare fraud industry is so enormous that crooks are constantly able to devise new ways to grab a piece of the pie.
Medicare and Medicaid: Fat Prey that’s Slow to Change
Much of healthcare fraud is being committed against Medicare and Medicaid, both government run health insurance programs, funded with our tax dollars. Medicare, which services the elderly, gives out over $600 billion a year for claims. Medicaid, which is for low-income individuals, also has an enormous budget, providing $415 billion a year for claims. Their sheer size makes these goliaths easy targets.
Medicare, and it’s contractors, process up to 4.5 million claims a day, but it’s estimated that only about 1% of these claims are audited. These programs are vulnerable due to underfunding and lack of oversight. There just simply aren’t enough people on staff to check things out regularly. Plus, Medicare doesn’t require claims to be verified by patients leaving the door wide open for faulty claims to be submitted and funded.
Obamacare Reforms Have Helped, But Not Enough
With the passage of Obamacare, many reforms are in the works to combat healthcare fraud. Stricter requirements and screenings for providers and suppliers, especially in those areas that have been rife with fraud, have been put into effect. Out of about a million providers over 470,000 failed to meet the new standards. Moratoriums have been placed on specific areas of the country and certain types of new providers allowed into the system.
A computerized fraud prevention system that analyzes data and indicates when fishy claims are being submitted, (for example one doctor ordering dozens of prosthetic arms) has been in use since 2011 and identified 115 million in suspicious payments in 2012. In addition, sharing information about phony providers between private insurance and Medicare/Medicaid should help weed out more bogus providers.
Although these changes are having an impact healthcare fraud continues to explode. Unfortunately, as one type of fraud is discovered and prosecuted another, or ten more, pop up in its place.
Like taking candy from a baby, healthcare fraud is just too lucrative and too easy to commit.
Healthcare Fraud: How to Avoid Being a Victim
There are many rather simple things you can do to avoid being a victim and to help prevent healthcare fraud on a whole.
Know your health history and ask questions
First and foremost stay on top of your health history. Be aware of what tests and diagnoses you have had and make sure your health records accurately reflect such. Keeping a healthcare journal, your own written record of your healthcare can be very useful. Unfortunately, if errant diagnoses appear on your health record it could result in you receiving improper care.
If your doctor orders a test or procedure you aren’t convinced you need to ask questions. Get a second opinion if you’re unsure of the necessity of any test or procedure. Educate yourself on what procedures and tests are commonly used or ordered for any conditions you may have.
Open and review all bills and statements
Open and carefully review all bills and insurance statements for accuracy. If you find unexpected charges contact your provider first. You should look for any charges for services you didn’t get, duplicate charges and charges for services that were not ordered by your doctor. Also, make sure the dates of service are correct. If you spend time in the hospital be sure to check that the dates of your stay are accurate. If you find errors report them to your insurance company. If you suspect fraud and you are on Medicare or Medicaid call the Office of Inspector General at 800-447-8477.
If you have an elderly relative, parent or friend assist them in reviewing their bills and statements.
Know your coverages
Read over your insurance policy, including your explanation of benefits. Know which procedures are covered. Make sure that you receive the procedures for which your insurance is charged. If anything suspicious shows up report it.
Check that your prescriptions are filled correctly before leaving the pharmacy
Make sure that you are receiving the right type of medicine, dosage and the correct number of doses.
Handle identity cards carefully
Healthcare identity theft is rampant. Carefully handle your insurance, Medicare, and social security cards. Don’t give them to anyone other than your doctor or Medicare provider. Protect them as you would your credit cards. If they fall into the wrong hands your entire medical history could be compromised.
Do not entertain “free” offers
Be suspicious of and do not entertain “free offers”. Keep in mind Medicare will not call you on the phone or visit your house to offer you anything. Any healthcare services or tests that are being offered free of charge are potential schemes. Fraudsters may go ahead and bill your insurance for the free services you receive if you accept an offer.
Providers need to take action to prevent healthcare fraud
Healthcare providers must also play a crucial role in order to bring healthcare fraud under control. Medicare estimates that up to 60% of faulty claims are actually accidentally miscoded or mishandled. Providers need to invest in training and education to avoid committing fraud, either by accident or on purpose. Each person on staff from office personnel to doctors and nurses should know what constitutes fraud and how fraud can occur. In addition, they should learn the negative impact that healthcare fraud has on the entire healthcare system and the punishments associated with committing fraud.
We cannot afford to allow healthcare fraud to continue to spread. Additional changes need to be made on every level to keep this plague from further intensifying. Not only does this rampant fraud impact every tax payer financially, but it also undermines our confidence in the healthcare system as a whole. Who wants to pay to go to the doctor if we can’t trust what he says or fear that he may be more interested in fattening his wallet than in keeping us healthy?
Health care providers need to educate and train their staff to avoid fraudulent practices and must be actively committed to keeping the integrity of the healthcare system intact. We entrust them with our health, our most important asset, and they must prove themselves worthy of this trust.
Additional improvements need to be made to Medicare and Medicaid. Adequate staffing and software systems are needed to oversee and evaluate claims, and additional boots are needed on the ground to combat fraud at the street level. It makes no sense that claims are funded without being seen by patients. A large portion of faulty claim payments could be avoided if patients approved them first.
Punishments and prosecutions for healthcare fraud must be severe and swift. Providers need to be made aware of and fear the repercussions of committing fraud. Plus, we must deter hardened criminals from getting involved and making the situation even worse.
The public needs to be educated about the prevalence and impact of healthcare fraud and what we can do to prevent it. If public awareness of this problem continues to falter and no real changes are made soon, we could have a real disaster on our hands. With hardened criminals entering the healthcare fraud arena the crimes being perpetrated will become even more egregious and more widespread.