The American healthcare sector is among the biggest industries the world over, boasting of assets worth huge sums of money. It is thus prone to massive cases of fraud owing to the vast amounts of finances that insurance firms, taxpayers, the private sector, and the government commit to the sector.
Such monies, meant for operational funding and research, are however sometimes fraudulently siphoned off by dishonest persons who wish to unfairly capitalize on the system. Some of the usual healthcare fraud types include: overcharging, self referrals and kick backs; as well as unbundling and upcoding. All such frauds harm various stakeholders in the healthcare sector, especially the patients who also double as taxpayers.
To begin with, self referrals and kickbacks frauds occur when medical firms and doctors unscrupulously send clients back to themselves so as to obtain more compensation from insurance firms. By committing this misdemeanor, the errant parties seek to derive benefits from increased expenditure or material. The parties also seek reimbursements for referring clients to unhelpful medical practitioners. Doctors may therefore improperly plan for clients to get needless health attention so as to swindle the government as well as the insurance firms of finances (Price & Norris, 2009).
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Referrals fraud is done in contravention of the Stark or Self-Referral Law (42 CFR 411.353).
This law prohibits patient referrals by physicians for particular Medicare-payable health services to entities whereby the physicians or immediate family members have fiscal compensation or ownership relationships.
Moreover, the law bars entities from presenting claims to Medicare or charging other persons or 3rd-party payers for the referred services. The penalties associated with breaching Stark regulations include giving back payments, or not being paid. In addition, an errant practitioner may pay a $15,000 fine for each service civil fiscal penalty as well as some $10,000 civil penalty per every unlawful arrangement (Litman, 2004).
Conversely, kickbacks contravene federal anti-kickback regulations. Such laws hold that persons who deliberately pay or receive incentives so as to influence the federal health program referral business, Medicaid and Medicare included, is liable for a criminal act. Anti-kickback laws apply to all healthcare practitioners provided that referrals concern repayment under national insurance programs. Anti-kickback breaches attract as much as 5-year-prison sentences.
Moreover, one may additionally pay criminal fines of as much as $25,000 besides $50,000 worth of administrative civil cash penalties. Further, the Office of Inspector General (OIG) may ensure that convicted persons are barred from taking part in healthcare programs (Morrison, 2000).
Conversely, the fraud of overcharging involves clients being required to pay extremely high amounts of money for the items or services they receive. This may involve overcharging for procedures, drugs, or other basic healthcare items (Smyth, 2002).
There are some regulations that aim to check the behavior of physicians charging higher amounts of money for healthcare items and services. For example, the OIG can take legal action against those unscrupulous healthcare practitioners. Related to lawsuits is the OIG’s requirement that the accused health practitioner solemnly promises to desist from asking their clients to pay more than what is statutorily allowed (Overcharging Beneficiaries | Office of Inspector General).
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The fraud of unbundling involves doctors submitting Medicaid or Medicare codes individually. This is because Medicare merely reimburses for x-rays if disease conditions are indicated. It does not however reimburse for sections of checkups. Certain doctors employ this phenomenon to raise their compensation sums by alleging that a disease has no proof. Moreover, the government compensates healthcare institutes for clusters as opposed to usual tests.
Dishonest organizations however separately charge the US government for such tests. The organizations then keep the residual monies. Regarding upcoding, doctors and healthcare institutions usually receive reimbursements from the government in exchange for services offered to patients. Such services normally have specific codes that re submitted to the government by healthcare organizations. It is thus easy for such organizations to replace cheaper codes with more costly codes (Bucy, 1996).
Regarding unbundling, the Medicare and Medicaid Services (CMS), formed the National Correct Coding Initiative (NCCI) to enhance nationwide accurate coding methods. Moreover, the NCCI controls inaccurate coding those results to wrong Medicare claims payments. The NCCI regulations related to the aforementioned concepts include the requirement that physicians do not fragment procedures into constituent parts. Moreover, physicians prohibited from unbundling services which are essential to more comprehensive procedures.
On the other hand, the federal government can take legal action against health care institutions that practice the frauds of unbundling. The defendants in such lawsuits are faced with charges of theft from the government. Courts have usually awarded the government hefty sums in form of fraud fines that the accused parties are ordered to pay. A notable case is the case in Massachusetts where eighty-seven hospitals were ordered to reimburse the government a sum of $3.5 million for having made bogus claims regarding deceptive Medicare billings (Rocke, 2000).
In conclusion, the US healthcare system is very huge, with assets and revenues amounting to huge sums of money. The lucrative nature of the systems has thus attracted unscrupulous persons who seek to unfairly benefits from such funds. Some of the most common frauds include: overcharging, self referrals and kick backs; as well as unbundling and upcoding. There are however tight regulations which check such frauds b y fining lawbreakers or making them to commit to never again commit the offenses.
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