What are the fraudsters doing these days? Well, according to reports, NOT getting away with healthcare fraud. The government is in hot pursuit of those that are bilking the system.

Some recent arrests include:

A Michigan podiatrist was accused of filing more than $800,000 in fraudulent claims. The doctor billed insurance providers for surgical procedures performed after falsely diagnosing patients with foot infections.

A New York surgeon was charged with stealing $3.5 million from insurance companies. The Department of Health & Human Services also investigated his billing patterns and found he had allegedly billed for multiple hemorrhoidectomies, office visits and examinations on the same day for the same patient on multiple occasions.

A Chicago-area cardiologist was ordered to pay $20 million and sentenced to 5 years in prison for defrauding both private and public insurers. The whistle blower on the case was another physician who worked in the same office.

Two West Virginia internists were sentenced to one year and one day of prison time after admitting to their involvement in a pill mill scheme. The local pharmacy where the prescriptions were sent by the physicians sold more hydrocodone in 2006 than all but 21 retail pharmacies in the country.

A California pathologist was sentenced to 25 years in prison for prescription fraud. He wrote fraudulent prescriptions for oxycodone in exchange for cash. In some cases the prescriptions were for minors under the age of 21.

In Miami a massage clinic owner was convicted of Medicare fraud. The owner was charged with submitting false claims for physical therapy services that were never given and occupational therapy services that Medicare does not cover.

Healthcare fraud is prevalent, but we’re finding ways to stop the bad guys.

Rebecca Busch’s healthcare tips were recently featured on EmpowHER a health and wellness site for women.

EmpowHER brings together women of all backgrounds to share their health stories, triumphs and tragedies. For Rebecca’s part, she spoke on what she knows best, healthcare fraud.

Below are her tips:

1. Counterfeit Drugs
If you take a medication for a chronic condition, save the packaging from the month before and compare the bottle, packaging or the pill itself.
2. Double Billing
Look at your Explanation of Benefits (EOB) after each doctor’s visit. Ask yourself, “Did I actually see that doctor or receive those services?” If the answer is no, call your insurer immediately.
3. Medical Identity Theft
If you don’t monitor your EOBs fraudsters have a better chance of stealing your Medical Identity. This can cause both financial and physical harm – if someone else’s information is included in your medical record you could receive false diagnoses. Take ownership of your healthcare finances and request your medical records and bills once a year.
4. Medication Delivery Errors
Deaths occur each year because patients are given prescriptions at the wrong time, in the wrong dose and of the wrong medications. Make sure you understand your medication regime and that the hospital staff is adhering to it.
5. Phantom Treatments
Some healthcare criminals bill insurance companies for services never received by patients. If you receive a bill that doesn’t make sense, contact the provider or your insurer.
6. Invalid Licenses
Some doctors practice without a valid license. To verify a license, find the Department of Regulation for your state and look up your provider’s name. Here, you can also see if they have ever had a disciplinary action against them.
7. Fake Insurance
Dishonest insurance agents and brokers sell discount cards and insurance cards for fake policies. Any health insurance plans that are priced below industry norms are likely fake. Remember, if it seems too good to be true, it is.
8. Prescription Mix-Ups
Medication errors occur more than you think – a hospital on the East Cost mixed up medication in roughly 1 in 8 prescriptions filled. Take an active role in your care and check your pills to ensure you have been given the drug you were prescribed.
9. Bad & Low Quality Care
Unqualified and untrained surgeons perform surgeries. Doctors use defective medical equipment to perform exams. Check the reputations of your doctors and facilities. Look for complaints lodged against them.

With the new rules and incentives reported in the Patient Protection and Affordable Care Act, we are seeing more whistleblowers come forth alleging healthcare fraud. Currently, 90% of health care fraud cases are whistleblower cases — often in which the behavior of the “ethically challenged” directly poses risks to public health.

Regardless of whether whistleblowers are concerned citizens, disgruntled employees or senior executives with a “lottery mentality”, hospitals and other healthcare companies must have strong compliance programs in place to stop fraudulent activity — such as improperly billing Medicare and Medicaid and kickbacks to doctors. A list of healthcare companies that have signed corporate integrity agreements with the OIG can be found here.

With the new incentives, hospitals and other healthcare companies are even more susceptible to whistleblowers. Now is the time to review your current compliance program and develop the necessary internal controls to protect your organization from committing fraud. Below are 4 simple but important considerations to keep in mind when evaluating compliance programs:

1. Periodic comprehensive fraud risk assessments are conducted.
2. Standards of conduct for employees are written and distributed.
3. Educational and training programs are offered to all employees.
4. Audits are conducted to monitor compliance and identify problem areas.

The effectiveness of whistleblowers is also an integral part of the effort to combat healthcare fraud. The first thing people need to do when encountering fraudulent activity in their workplace is to make sure that they understand the reporting framework and seek appropriate legal counsel. As an expert witness, I have seen first-hand the enormous complexity of whistleblower suits.

Earlier this summer, the U.S. Government Accountability Office (GAO) released a report identifying the challenges that CMS faces in implementing strategies to prevent overpayments and fraud, waste, and abuse — including focusing on pre- and post-payment claims review on the most vulnerable areas.

Our administration has set battling healthcare fraud, waste and abuse as a high priority. A recent study found $835 million in questionable Medicare payments identified by private contractors in 2007.

Some states are following suit for their Medicaid programs. The Illinois Department of Healthcare and Family Services also recently issued a report on the efficiencies and improvements in the Illinois Medicaid program that included measures to prevent Medicaid fraud and overpayments by contracting with third parties to conduct payment and recapture audits. The State of Indiana also recently issued a Request for Services to detect fraud, waste and abuse in its Medicaid program.

It is also important to stop money from going out-the-door in the first place. Preventing inappropriate payments can be easier than “recovering” inappropriate payments after the fact — as evidenced by that fact that perpetrators often “close shop” and move on when they are notified of claim disputes. The GAO calls for Medicare to improve the pre-payment review of claims. As predictive modeling technologies continue to evolve pre-payment claim review will become a critical tool to combating fraud.

The “ethically challenged” understand the amount of money in healthcare – and do not limit their prey to government sponsored programs. It is critical for private payers, plan administrators and self-funded employer plans to follow suit in both pre- and post-claim review.

Counterfeit drugs are killing or greatly harming patients that are desperate for medical care. Estimates state that nearly 700,000 people are killed each year after ingesting counterfeit malaria and tuberculosis drugs.

The World Health Organization (WHO) estimates that up to 30% of medication on the market in developing countries in Africa are counterfeit and have found that nearly 50% of the drugs sold in Angola, Burundi, and the Congo are of poor quality. Furthermore, nearly two-thirds of anti-malaria drugs in Laos, Myanmar, Cambodia, and Vietnam contain insufficient active ingredients.

A 2003 Interpol survey on the quality of drugs available in Lagos, sub-Saharan Africa’s most populous city concluded that 80% of the drugs available were fakes. In 2008, more than 80 children in Nigeria died after being given medicine that looked, smelled, and tasted like the real thing, but was laced with antifreeze.

Why are the numbers so high? Jacqueline Sawyer, Liaison Officer at WHO’s Prequalification of Medicines Programme, told MediaGlobal “The problem of counterfeit medicines is more prevalent in countries where medicine regulation is ineffective, smuggling of medicines is rampant, secret manufacturing exists, sanctions are absent or very weak, and there is high corruption.”

Do not think counterfeit or tampered drugs only exist in developing countries. An estimated 1% of all medicines dispensed in developed countries are counterfeit. Medicines containing boric acid and other lethal substances have been found recently in certain medications.

To be sure that your drug is safe to use, check the FDA’s website. They announce drugs that might have been tampered with and also have correct packaging and dosage information.
Recent FDA Headlines:
FDA Warns About Fraudulent Tamiflu
Warning: Counterfeit Alli
FDA Issues Warning on Counterfeit Surgical Mesh

Full article here.
FDA here.

While much of the focus of the public discussion surrounding healthcare reform has centered on the expansion of coverage to the uninsured, we are all aware that the reform will also have a major effect on both fully-insured and self-insured employer sponsored plans. By now, employers should know that failing to meet government mandates for coverage and affordability will result in monetary penalties.

But a seldom discussed impact of healthcare reform on employers is their increased exposure to fraud, waste and abuse. For example,

1) No lifetime or annual limits: If plans have ineligible members or dependents on their plan… now there is no limit to how much employers could be inappropriately paying for coverage of ineligible members.

2) Extension of dependent coverage: Now that employers must allow dependent coverage to continue for an adult up to age 26, plans will have an influx of new dependents… that means more potential ineligible dependents.

3) Waiting periods limited: Employers will have to provide coverage within no more than 90 days… that means employers face the risk of paying for ineligible dependents sooner.

Employers that do not regularly conduct eligibility audits, to ensure that they are not extending coverage to ineligible members and dependents, will face a significant increase in risk due to employee abuse (intentional or not) of benefit coverage. Eligibility audits are a simple way stop inappropriate healthcare expenditures. The reality is that when rules change, “the ethically challenged” will find new ways to capitalize.

For more information on the impact of healthcare reform, check out McGuireWoods Healthcare Reform Guide: Installment No. 8.

Information Security Media Group – a media company specializing entirely on information technology risk management for vertical industries, recently interviewed Medical Business Associates, Inc. President & CEO Rebecca Busch for her thoughts and commentary for a podcast “Cracking Down on Insurance Fraud.”

Rebecca highlighted the fact that a good foundation based on fraud risk assessments needs to be established to fight fraud. She also points out that insurers and providers need to regularly audit all network activity to assess risk and potential vulnerabilities where holes might be found.

Her opinion on Healthcare Reform – it might lead to an increase in insurance fraud in the short term as information systems are adjusted and new rules are implemented but should eventually decrease fraud, as more individuals will receive health coverage.

Roughly 60 billion healthcare dollars are lost each year due to fraud, waste and abuse. How does this theft affect you the taxpayer and healthcare consumer?

The answer is surprisingly simply ­ it hits your wallet first. Insurance premiums are increasing at a staggering rate ­ 33% in the last five years. If this continues, most individuals will not be able to afford any type of insurance, costing taxpayers even more because they will be the ones footing the bill for the uninsured.

Insurance premium increases hit the employer even harder. Many times employers (especially small businesses) are forced to reduce their workforce to accommodate the rising costs or even cut healthcare benefits entirely.

Prescription drugs are an area that is greatly affected by fraud. Fraudsters are fans of selling counterfeit medication. Consumers ingesting this medication (many times laced with poison ­boric acid for example) can end up in the emergency room with complications costing thousands.

The recent passage of Healthcare Reform is also proving to be good news for fraudsters. Many consumers have little to no knowledge of the bill and scammers have found multiple ways to cheat the innocent out of their money.

Fraudsters prey on the fear and confusion brought about by the bill. Going door-to-door selling fake insurance, scammers advertise an “ObamaCare” plan and insisting consumers better act fast due to a “limited enrollment” period. These scams bilk consumers out of thousands of dollars and leave them without any real insurance, so if a medical emergency where to occur, they would be left footing the bill.

So, what can the consumer do to help combat healthcare fraud? First, understand exactly what you’re being charged for and always ask for clarification on any charges for services that you do not recognize. Second, know where your medical identification is and alert proper authorities when your insurance card has been stolen ­ medical identity theft crimes can leave you sorting out medical bills for the rest of your life. Finally, be a conscientious healthcare consumer. Be aware of current fraud schemes and check out the Food & Drug Administration website to ensure your medication is not on the counterfeit list.

We have discussed types of healthcare fraud (i.e. Rent-a-Patient Schemes, Pill Mill Schemes, Drop Box Schemes & Third-Party Billing Schemes) in a previous post. However we didn’t highlight some new ways scammers and fraudsters are stealing your healthcare dollars, mainly through the online world.

A recent ABC News article, “Health Care Fraud: Two Ways Scammers Are Trying to Take Your Money” describes two “ingenious” ways fraudsters are stealing your money. The article explains that because of all the healthcare hoopla occurring, people do not understand and are unaware of current policies – leaving what they call “anxious Americans.” This is how the scammers get you.

The first scam that was highlighted was “Door-to-door salesman selling bogus policies.” What does that entail? Scammers are going door-to-door selling fake insurance policies by stating that current legislation is accounting for the low “limited enrollment” period fees. They are confusing people by essentially telling them that if they don’t buy the insurance now, the price will increase excrementally and they will not be able to afford it in time.

The next scam “1-800 advertisements promoting scams” is very similar to the door-to-door scam; however, this time the fraudster are taking it to the airwaves and asking people to call and 1-800 number for “limited enrollment specials made possible by new legislation.”

As always, don’t forget about Medical Identity Theft – this practice is increasing by 375%. The key to any insurance deal is if it is too good to be true than it probably is.

“Blowing the whistle” on a former healthcare employer can lead to lottery like payouts. Recent whistleblowers are earning millions of dollars for their fraud reporting. Here are some highlights:

1. Pfizer whistleblower earns $51.5 million reward – with Pfizer having to pay $2.3 billion in penalties.
2. $2 million awarded to two New Yorkers for speaking out against their former nursing home employer – $24 million was paid back to the state.
3. A registered nurse received $4.9 million for her help in a Medicare fraud case that netted the U.S. Government $24 million.

However a recent Supreme Court ruling could change the nature of whistleblower lawsuits and the big individual payouts. The court has placed limits on existing whistleblower lawsuits claiming that local governments have misused federal money. The court voted 7 – 2 to hold that a technical, though important aspect of the federal whistleblower law applies to local governments. There is a section of the law that prohibits whistleblower lawsuits when public disclosure occurs through a court hearing, a news report or congressional/administrative audit. Read full article here.

It makes sense that once allegations are disclosed publicly, lawsuits are harder to file. If that wasn’t the case, people could hear about something on the news and head to the courthouse to file a claim. On the other hand, we need to make sure that people are still willing to file these claims against current or former employers who are guilty of wrongdoing. A previous post discussing two Texas nurses who are on trial for bringing claims against a doctor is a perfect example of what we are doing to NOT encourage people to stand up for what is right.