Healthcare fraud in relationship to

managed healthcare


jadavhiren
10/23/2014




Healthcare abuse is an activity or behavior by organizations and individuals where
knowing intent to obtain an unlawful gain cannot be established. Health care abuse is defined in
terms of practitioner practices that are inconsistent with accepted sound fiscal business or
medical practices.

Introduction:
Healthcare fraud is considered a federal crime under most criminal codes &
consists of intentional deceit within the healthcare system for the general purpose of
illicit gains. It not only causes economic drain on our health care system, but also costs
the nation in terms of the health of its citizens A health care fraud includes drug fraud,
health insurance fraud,& medical fraud.
Healthcare fraud and abuse can occur at any of the six layers in the managed health
industry as defined in the diagram below:

The frauds could range from:
Original purchaser supplying false information;
Phantom claims for services or supplies that were never provided
Falsifying signatures or medical records to support misrepresented services or
supplies
An employee in a purchasing cooperative being bribed

An executive of a health plan submitting false/mendacious documentation on the
number of physicians contracted to serve a given patient base
Several individuals setting up a phony provider company to get capitated
payments for a period of few months and then disappear
A particular provider that falsifies utilization or cost data to receive a higher share
of the risk funds set aside by the health plan
A beneficiary which goes to three or four different providers to get prescription
drugs at a discount and then turns around and sells them for a profit margin.
Duplicate claim submissions

Define the problem:
Fraud occurs when somebody intentionally attempts to obtain something of
value that the party is not entitled to under the statutory, regulatory, or contractual rules
that govern the relationship. This definition, although a long one, is general enough to
encompass fraud schemes throughout the health care system, including those in managed
care.
Healthcare abuse is a similar activity or behavior by organizations and
individuals where knowing intent to obtain an unlawful gain cannot be established.
Health care abuse is defined in terms of practitioner practices that are inconsistent with
accepted sound fiscal business or medical practices which directly or indirectly may
result in: 1) improper payment 2) unnecessary costs to the program 3) services that fail to
meet professional standards of care or are medically unnecessary, or 4) services that
indirectly or directly result in adverse patient outcomes.

A healthcare fraud not only affects costs, but also affects the quality of care,
particularly in managed care. Moreover, the extent to which that fraud in the managed
private side goes unaddressed or undetected, it undermines the anti-fraud efforts in
government-sponsored programs.

Literature Review:
Fraud and Abuse in the Healthcare market of California By Elias S. Lopez,
Ph.D
It provide a picture of the current structure of the health care market,
pinpoint the areas where the potential for fraud is the greatest; and gives an
inventory of the major agencies involved in detecting, investigating, and
prosecuting fraud and abuse

Combating Fraud in Medical Research By Bhavin Patel, Anahita Dua, Tom
Koenigsberger and Sapan S. Desai
It talks about the alarming rates of frauds in medical research and
healthcare industry and discusses the several ramifications to the problem.

Is the incidence of research fraud increasing? By Steen, G.R. Retractions in the
scientific literature: J. Med. Ethics.
Discusses the increasing incidence of research related frauds in medical
industry and the counter measures required to curb them.


Analyze the problem:
Medical frauds are a widespread phenomenon both in the fee-for-service
environment and also in the capitation arrangement. The reason for that is that
Currently there is plethora of money that flows in the managed healthcare
system.
Unbundling of services is quite a common phenomenon where the provider
makes more money by billing for the procedure in parts.
Exclusion of Covered Benefits is a common occurrence even when it is
included in the scheme of things
Bribery & Self-Referral between two or more parties that disintegrates the
veracity of the whole managed healthcare system.

Offer possible solutions.
Possible solutions could be:
Industry Level:
Provision of education (compliance/privacy and security guidelines)
Proficiency on the use of CAC technologies and statistical algorithms.
Making managed healthcare organizations participate in leadership roles on
organizational compliance and fraud.
Personal Level:
Reviewing statements clearly to verify accuracy.
Critically understanding the reason for services
Reporting the discrepancies related to health insurance plan

Safeguarding the insurance card just like any other credit card
Reporting instances where deductible or co-payments are waived

Develop an implementation plan.
Implementation could happen in the following steps:
1. Firstly emphasis should be put on continuing education on new regulations
and laws pertaining to fraud and abuse to make organizations and people
aware of the causes and effects healthcare fraud and abuse.
2. With the help of Technology, statistical analysis should be performed to create
more accurate and detailed audit trails to detect fraudulent practices over time.
3. Active involvement of Organizations should be ensured in policy decisions at
the national and local level related to fraud prevention and detection

Why and how your solution will solve the identified problem
The solution identified by me will tackle the problem from the grass root level
and not just provide a superficial way of handling the issue.
Education and awareness amongst organizations and individuals is the best way to
start the cleaning measure, because if we are aware of the consequences we would be
more alert to the occurrences. Once awareness is spread Technology could be used to
predict future audit trails and check any further occurrences. Finally an active level of
involvement of managed organizations in policy making would give them extra incentive
to shy away from such immoral acts.


References:
http://www.library.ca.gov/crb/97/13/97013.pdf
http://www.bcbs.com/report-healthcare-fraud/
http://www.cigna.com/reportfraud/
http://www.ahimafoundation.org/downloads/pdfs/Fraud%20and%20Abuse%20-
%20final%2011-4-10.pdf
file:///C:/Documents%20and%20Settings/user.NIRMALYA-
F01E74.000/My%20Documents/Downloads/publications-01-00140.pdf