Top Healthcare Provider Fraud

Apr 27, 2021 | Compliance, Fraud / Waste / Abuse, GRC, Provider Management, Verification

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The National Health Care Anti-Fraud Association (NHCAA) estimates between $100-$300 billion in healthcare fraud is committed in the United States annually; this often comes with unfairly high costs passed onto patients. Healthcare fraud can also have severe consequences and penalties for practitioners and healthcare organizations.

Investigation of these crimes is a high priority for the FBI, and specific field agents are assigned to these cases. Therefore, healthcare employers must be vigilant and proactive about defending their organizations against healthcare fraud. 2020 was a historic year for healthcare fraud. Fraud and fraudulent attempts are likely to increase in a post-pandemic environment due to high claim volumes and regulation changes. Here’s what your organization needs to know to safeguard against escalating healthcare fraud risks.

Healthcare Fraud and Abuse Definitions

Healthcare fraud is defined as any deliberate and dishonest act committed with the knowledge that it could result in an unauthorized benefit to the person committing the act or to someone else who is similarly not entitled to the benefit.

Fraud exposes both providers and overseeing institutions to severe consequences such as:

  • Nonpayment of claims
  • Civil Monetary Penalties (CMPs)
  • Exclusion from all federal healthcare programs
  • Criminal liability
  • Civil liability

Healthcare abuse is not necessarily deliberate and dishonest. Abuse occurs when organizations are not adhering to medical best practices, thus resulting in unnecessary expenses, treatments, services, and ultimately the waste of valuable resources.

Key Laws to Regulate Healthcare Fraud and Abuse  

Federal laws governing healthcare fraud and abuse include:

  1. Federal False Claims Act: imposes civil liability on any individual who knowingly submits, or causes the submission of, false or fraudulent claims to the federal government. Law officials do not need proof of specific intent to defraud to charge individuals.
  2. Anti-Kickback Statute: targets individuals who knowingly and willfully pay, solicit, offer, or receive remuneration directly or indirectly to induce or reward referrals of services and items reimbursed by federal healthcare programs.
  3. Physician Self-Referral Law: prohibits providers from making referrals for certain healthcare services reimbursable by federal healthcare programs to an entity in which the provider (or immediate family member) has an ownership or investment interest or with which he has a compensation agreement, otherwise known as Stark Law.

OIG Suggested Providers Implement the Following:  

The Solutions to Reduce Fraud, Waste, and Abuse in HHS programs: OIG’s Top Recommendations is published by the Department of Health and Human Services (HHS) annually. Recommendations are created by annual audits and evaluations. The top recommendations from the Office of Inspector General (OIG) include the following:

  • Development and distribution of written conduct standards and policies that promote the hospital’s commitment to compliance (e.g. by including compliance adherence as part of staff evaluations) that address areas of potential fraud, such as claims management and financial relationships with other providers
  • Appointment of a Chief Compliance Officer and other compliance staff charged with operating and monitoring the compliance program and reporting to the hospital’s governing body
  • Implementation of continuous education and training for staff
  • Maintenance of a process to receive healthcare fraud reports and complaints, such as a hotline, and the development of procedures to protect anonymity and whistleblowers from retaliation
  • Establishment of a system to respond to healthcare fraud and abuse accusations and appropriate disciplinary actions against staff who violate compliance policies and laws
  • Use of audits and/or evaluations to track compliance adherence and help reduce issues
  • Investigation and remediation of systemic problems and the establishment of policies to address if staff involved are retained or terminated   

Top Healthcare Provider Fraud Schemes 

In order to protect your healthcare organization, healthcare administrators should be familiar with the most prevalent healthcare fraud schemes. The most commonly reported fraudulent schemes by the OIG include the following activities:

  1. Billing for services not given
  2. Kickback and bribery
  3. Falsifying dates of service
  4. Falsifying location of service
  5. Billing for a non-covered service as a covered service
  6. Falsifying provider of service
  7. Waiving deductibles or copays
  8. Incorrect reporting or diagnosis or procedures
  9. Overutilization of services
  10. Unnecessary issuance of prescription drugs

Healthcare fraud schemes are constantly becoming more complex, costing taxpayers billions of dollars annually and, at worst, risking patient lives. However, with vigilance and education about fraud and how to report it, you can safeguard your healthcare organization with prevention and earlier detection.

Defending Against Fraud: How Verisys Can Provide Prevention and Early Detection 

One way to combat increasing healthcare fraud is by leveraging the power of technology. Verisys provides continuous monitoring software, saving healthcare administrators time, money, and resources. Our Fraud Abuse Control Information System (FACIS) can be used to screen and monitor your provider population for sanctions, exclusions, debarments, and disciplinary actions. Verisys also monitors licensure and can alert you when the status of a license changes.

Our software pulls data from more than 5000 primary sources and is used daily to screen millions of providers across the country. With our SaaS solutions, our technology works seamlessly within workflows, creating real-time screening for new employees, traveling and/or contracted providers, and/or telemedicine providers. Learn more about how Verisys can help protect your healthcare institution against healthcare fraud so that you can continue to provide the highest level of care to patients.

Verisys Written by Verisys
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