Every year, healthcare fraud wastes billions of dollars in taxpayer funding and robs the most vulnerable patients of the resources they need to get well.
As anti-fraud programs gain momentum, fraudsters always look for new ways to slip through the cracks. Here are four types of fraud healthcare professionals should be aware of this year.
1. Unnecessary procedures
One of the most common ways that people defraud Medicare, Medicaid, and TRICARE is by billing those programs for unnecessary procedures. This scheme typically involves lying to a patient about their diagnosis or treatment needs in order to justify the highest possible billing level.
In January 2017, a Michigan neurosurgeon named Aria Sabit was sentenced to nearly 20 years in prison for giving patients unnecessary spinal surgeries solely to boost his own profits. He defrauded $2.8 million from healthcare programs, including Medicare and Medicaid.
He performed the unnecessary procedures as part of a kickback scheme with Apex Medical Technologies, which provided the spinal implants. Many of the patients this neurosurgeon treated were seriously harmed by the implantation of the devices.
Not only did Sabit hurt patients in Michigan; he had previously been suspended from his position at a California hospital.
Sabit’s case is a clear demonstration of why healthcare providers should only be performing those services that are in the best interest of patients. To do otherwise can come at a steep cost to patients, as well as to the taxpayers that fund public healthcare programs.
2. Patient referral schemes
Healthcare companies sometimes develop an excessive focus on boosting profits and end up breaking the law. Though all hospitals need patients in order to continue operating, it is illegal to pay for patient referrals while enrolled while enrolled with public healthcare programs.
Tenet Healthcare paid over $500 million in 2016 to settle allegations that it bribed prenatal care clinics to refer Medicaid patients to Tenet hospitals–even if the nearest branch was very far from where the expectant mothers lived. The patients were told that in exchange, all of their childbirth and newborn care costs would be covered. Tenet raked in over $145 million from federal healthcare programs from this kickback scheme.
There are many ways healthcare facilities can commit kickback violations, but it’s important for providers to know that it is illegal both to offer and to receive payments or gifts in exchange for patient referrals.
3. Fraudulently compounded medications
Compounded medicines are an important option for patients with unique treatment needs or difficulty taking standard forms of medication. Many pharmacies that offer these types of prescriptions have been known, however, to orchestrate large-scale fraud schemes. Federal reimbursements for compounded medicines have risen astronomically in recent years, prompting the government to more closely investigate the authenticity of claims for those drugs.
One way that pharmacies defraud the government is by paying doctors to write needlessly expensive compounded prescriptions. A California pharmacy was accused of a compounding scheme, after bribing doctors to write $3,000 prescriptions for pain creams, when the patients’ needs could have been met with $20 prescriptions.
Since Medicare and Medicaid are publicly funded, it is illegal to deliberately overcharge the government for any treatment, including pharmaceutical products.
4. Ambulance billing fraud
There are so many cogs in the wheel of our healthcare system, it can be difficult rooting out fraud in every corner. A recent settlement involving Medstar Ambulance shone a light on a less publicized type of healthcare fraud that can be seriously costly.
Medstar agreed to pay $12.7 million back to the government to resolve allegations that it had regularly billed for unqualified trips. The company was also accused of upcoding regardless of the actual severity of a patient’s condition.
Given the frequency with which ambulances are used in healthcare, this is a type of fraud that is unlikely to go away anytime soon. Unfortunately, fraudsters may take advantage of a patient’s vulnerability or inability to communicate in order to increase their profits at the government’s expense.
Whistleblower Rights for Healthcare Providers
Even with laws like the False Claims Act as a deterrent, fraud is still very common in almost every sector of the healthcare industry. If you witness it, you have the right to speak up. Learn more about the rights of healthcare whistleblowers here.
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