1. Rent-a-Patient Scheme
In this scheme organizations pay for—or “rent”—individuals to go to clinics for unnecessary diagnostic tests and cursory examinations. The scary thing is that licensed physicians sometimes participate in the rent-a-patient scheme. Case and point: Robert Bourseau, 75, was sentenced to 37 months in prison and ordered to pay $4.1 million in restitution for his role in a scheme to defraud Medicare and Medi-Cal. He pleaded guilty in June to paying a recruiter to deliver homeless patients to his hospital for unnecessary medical services.

2. Pill Mill Scheme
In this scheme, separate health care individuals and entities (usually including a pharmacy) collude to generate a flood of fraudulent claims that Medicaid pays. After a prescription is filled, the beneficiary sells the medication to pill buyers on the street who then sell the drugs back to the pharmacy. Example: Rick Kloxin, pharmacist in charge of Hogan’s Pharmacy in Lyons, Kans., was found guilty in an internet pill mill scheme. Kloxin pled no contest and was found guilty of 14 misdemeanor counts of violating Kansas Pharmacy laws.

3. Drop Box Scheme
This scheme uses a private mailbox facility as the fraudulent health care entity’s address, with the entity’s “suite” number actually being its mailbox number. The fraudulent health care entity then uses the address to submit fraudulent Medicare, Medicaid, and other insurance claims and to receive insurance checks.

4. Third-Party Billing Scheme
The third-party billing scheme revolves around a third-party biller—who may or may not be part of the scheme—who prepares and remits claims to Medicare or Medicaid (electronically or by paper) for health care providers. It is possible, however, for a third-party biller to defraud Medicare, Medicaid, and others by adding claims without the providers’ knowledge and keeping the remittances or by allowing fraudulent claims to be billed to Medicare or Medicaid through its service. Example: Recently, in Miami, Ihosvany Marquez and several alleged conspirators were indicted on charges of having filed $55 million in phony Medicare claims for HIV, AIDS, cancer, pain and varicose vein treatments.

Healthcare fraud knows no boundaries. The U.S. Medicare and Medicaid programs are equivalent to many government-sponsored programs in other countries. Regardless of country, the existence and roles of players within the healthcare continuum are the same. All healthcare systems have patients, providers, TPAs (third-party administrators) that process reimbursements to third parties, plan sponsors (usually government programs or private-pay activities) and support vendors.

Examples of international healthcare fraud are plentiful. In France, a psychiatric nursing home took advantage of patients to obtain their property. In 2004, a newspaper in South Africa reported “a man who posed as a homeopathic doctor was this week sentenced to 38 years in jail – the stiffest term ever imposed by a South African court on a person stealing from medical aids.” An Australian psychiatrist claimed more than $1 million by writing fake referrals of patients to himself; he also charged for the time spent having intimate relations with patients.

In Japan, as in the United States, there are examples of hospitals incarcerating patients, falsifying records and inflating numbers of doctors and nurses in facilities for profit. A U.K. medical researcher mislead his peers and the public by using his own urine sample for 12 research subjects. Switzerland, know for its watches, had providers sanctioned for billing 30-hour days.

Excerpt from Healthcare Fraud: Auditing & Detection Guide by Rebecca Busch

The bipartisan bill would end the common practice of mailing reimbursement checks to post office boxes. However, we first should all be asking a very important question. Who thought it was responsible to send reimbursement checks to post office boxes in the first place? What reputable healthcare provider doesn’t have a permanent address where to send checks?

The Act will mandate that all government sponsored health programs pay healthcare providers and suppliers by using direct deposit. This certainly seems to be a step in the right direction and into the 21st century. Direct deposits will eliminate an easy way for criminals to get their hands on reimbursement checks, save the government money on stamps, envelopes, paper check etc., and don’t forget about the environment.

Congress, please say, “Yes,” to healthcare reform.

WellPoint – an independent licensee of Blue Cross and Blue Shield – also announced that they recovered $75 million due to waste, fraud and abuse in their system. According to their estimates, for every $1 spent on investigating fraud the company saves or recovers $11.

Read full article.

If insurance companies can find ways to combat waste, fraud and abuse in their systems, Medicare and Medicaid need to find more productive methods. An estimated $68 billion every year – or 3% – of all healthcare expenditures is stolen. The government could insurance millions with that “extra” money.