Ways To Start Medical Care Reform
Neurosurgeon Turned Author Writes With
Gripping Realism
Health care insurance in the United
States is too expensive; health care delivery is too expensive and is in
serious need of reform. This is not a political statement; it is a simple
statement of fact, and we should get away from the political win or lose
mentality that has suffused the rhetoric about reform. In this article we will
look at the parts that waste, abuse, fraud, and serious crime, play in that
expense—excessive and correctable expense that needs reform. According to the
Associated Press, the U.S. health care system squanders $750 billion a year--close
to 30 cents of every medical dollar on unneeded care, byzantine paperwork,
fraud, neglect, abuse, and other waste, based on information from the
influential Institute of Medicine. Despite the very considerable effort and
expense by law enforcement, the numbers have not changed significantly in the
last decade.
The Health Insurance Portability and
Accountability Act of 1996 (HIPAA) established a national Health Care Fraud and
Abuse Control Program (HCFAC) under the joint direction of the Attorney General
and the Secretary of the Department of Health and Human Services (HHS). At its
inception, the law recognized that much of what medical care costs the
consumer, the insurance companies, and the government, comes from misuse or
outright crime involved in medical care costs. By the law, acting through the
Inspector General, a program of investigation and enforcement was designed to
coordinate federal, state, and local law enforcement activities to monitor and
to gain control of health care fraud and abuse.
Now in its twenty-third year of
operation, the program’s continued success confirms the soundness of the
concept of legally enforceable control and of a collaborative approach to
identify and prosecute the fraud, especially the most egregious instances of
health care fraud, and to prevent future fraud and abuse. It is presumed based
on past experience that such expenses will only increase without greater scrutiny.
It is imperative to protect program beneficiaries—i . e. the patients, as opposed
to concentrating on the large companies primarily. It is also widely recognized
that we need to do better, to bring costs down, and to rid the system of those
who prey on innocent patients and payors .
During Fiscal Year (FY) 2017, the
Federal Government won or negotiated almost two and a half billion dollars in
health care fraud judgments and settlements, and it attained additional
administrative impositions in health care fraud cases and proceedings. As a
result of these efforts, as well as those of preceding years, in FY 2017, $2.6
billion was returned to the Federal Government or paid to private persons. Of
this $2.6 billion, the Medicare Trust Funds received transfers of approximately
$1.4 billion, and $406.7 million in Federal Medicaid money was similarly
transferred separately to the Treasury.
Enforcement actions in FY 2017
resulted in the Department of Justice (DOJ) opening 967 new criminal health
care fraud investigations. Federal prosecutors filed criminal charges in 439
cases involving 720 defendants. A total of 639 defendants were convicted of
health care fraud-related crimes during the year. Also, in FY 2017, DOJ opened
948 new civil health care fraud investigations and had 1,086 civil
health care fraud matters pending at the end of the fiscal year. In FY 2017,
the FBI investigative efforts resulted in over 674 operational disruptions of criminal
fraud organizations and the dismantlement of the criminal hierarchy of more
than 148 health care fraud criminal enterprises. That year, investigations
conducted by HHS’s Office of Inspector General (HHS-OIG) resulted in 788
criminal actions against individuals or entities that engaged in crimes related
to Medicare and Medicaid, and 818 civil actions, which included false claims
and unjust-enrichment lawsuits filed in federal district court, civil monetary
penalties (CMP) settlements, and administrative recoveries related to provider
self-disclosure matters.
HHS-OIG also excluded 3,244
individuals and entities from participation in Medicare, Medicaid, and other
federal health care programs. Among these were exclusions based on criminal
convictions for crimes related to Medicare and Medicaid (1,281) or to other
health care programs (309), for patient abuse or neglect (266), The amount
reported as won or negotiated only reflects the federal recoveries and
therefore does not reflect state Medicaid monies recovered as part of any
global federal-state settlements. As a result of licensure revocations (973).
HHS-OIG also issued numerous audits and evaluations with recommendations that--when
implemented--would correct program vulnerabilities and save program funds.
The FBI is the primary agency for exposing and investigating
health care fraud, with jurisdiction over both federal and private insurance
programs. Health care fraud investigations are considered a high priority
within the Complex Financial Crime Program, and each of the FBI’s 56 field
offices has personnel assigned specifically to investigate health care fraud matters.
Field offices proactively target fraud through coordinated initiatives, task
forces, and strike teams, and undercover operations.
In
2011, $2.27 trillion was spent on health care and more than four billion health insurance
claims were processed in the United States. It is an undisputed reality that
some of these health insurance claims are fraudulent. Although they constitute
only a small fraction, those fraudulent claims carry a very high price tag. Insurance companies
generally must pass the costs of bogus claims--and of fighting fraud--onto
policyholders. Victimized businesses must pass the cost of rising insurance
premiums onto their customers by raising prices for goods and services. Many
larger corporations also spend millions of dollars a year to investigate and
prevent fraud. This contributes to a premium spiral that can price
essential insurance coverage--often state required--beyond the reach of many
consumers and businesses.
The
National Health Care Anti-Fraud Association (NHCAA) estimates that the
financial losses due to health care fraud are in the tens of billions of
dollars each year. Think what the country could do for medical care for the
needy with that money flowing into the proper coffers. At least $80
billion in fraudulent claims are made annually in the U.S., the Coalition
Against Insurance Fraud estimates. This includes all lines of insurance. It’s
also a conservative figure because much insurance fraud goes undetected and
unreported.
Medical Care and
other types of fraud imposes serious financial and personal costs on consumers,
businesses, government and our society. Insurance swindles victimize innocent
people of every income, age, education level, ethnic background, and region of
the U.S.
The majority of health care fraud is
committed by a very small minority of dishonest health care providers.
The
most common types of fraud committed by dishonest providers include:
- Billing
for services that were never rendered, e.g.
utilizing identity theft, by fabricating entire claims out of whole cloth, or by padding claims with charges for procedures or services that did not take place.by - Billing
for more expensive services or procedures than were actually provided or
performed, commonly known as "
"-i.e., falsely billing for a higher-priced treatment than was actually provided such as inflation of the patient's diagnosis code to a more serious condition consistent with the false procedure code.upcoding - Performing medically unnecessary services solely for the purpose of generating insurance payments-such as nerve-conduction and other diagnostic-testing schemes to pad billing.
- Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments. This is widely seen in cosmetic-surgery schemes, in which non-covered cosmetic procedures such as "nose jobs" are billed to patients' insurers as deviated-septum repairs, or eye-lid cosmetic procedures under the guise of “repair of drooping eyelids interfering with vision.”
- Outright falsification of a patient's diagnosis to justify tests, surgeries, or other procedures that aren't medically necessary.
- billing each step of a procedure as if it were a separate procedure.Unbundling - Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.
- Accepting kickbacks for patient referrals.
- Waiving patient co-pays or deductibles for medical or dental care and over-billing the insurance carrier or benefit plan (insurers often set the policy with regard to the waiver of co-pays through its provider contracting process; while, under Medicare, routinely waiving co-pays is prohibited and may only be waived due to "financial hardship".
There are also crimes of
violence against people and property in which people’s health, lives, and
property, often are endangered by insurance schemes. Such crimes fall under the
following categories of criminal behavior:
Staged auto crashes. Lives
are jeopardized when innocent motorists are maneuvered into car crashes staged
by crime rings to collect large injury payouts from auto insurers. A family of three
was burned to death when a setup crash went awry after their car was hit by two
large trucks on a California freeway. A grandmother in Queens, N.Y. died when
her car went out of control after she was maneuvered into a staged crash.
Murder for life insurance. Someone murders a spouse, relative, or business partner, etc.to collect on the
victim’s life-insurance policy. Coverage often is worth $200,000 or more.
Murder for life insurance. Someone murders a spouse, relative, or business partner, etc.
Unneeded surgeries. Patients are maimed, disfigured, and forced into lives of permanent pain when dishonest doctors perform unneeded and often botched surgery to inflate their insurance billings. Cancer, spine, heart, and eye, surgery are among the procedures and surgeries inflicted on trusting patients. Many victims are elderly, poor, and homeless. The patients, the insurance companies, and governments, are all victims of these crimes.
Arson. Homes
and businesses are burned down for insurance money. The lives of firefighters,
family members, and neighbors, are jeopardized. Numerous people have died or have
been seriously injured by insurance arsons. Arson fires also often burn nearby
homes and businesses, thus magnifying the property damage and insurance costs.
Doctors and hospitals must rally to care for the injured victims, often without
pay.
Stolen premiums. Most insurance agents are honest. However, there are corrupt agents who pocket client insurance premium checks without buying the promised coverage. This leaves the clients dangerously uncovered and surprised to find out that they are bare of insurance when
These crimes spend
scarce taxpayer resources. Fighting insurance fraud is a major expense for
federal, state and local governments. The efforts--while necessary--divert
often scarce government resources needed to fight other serious crimes:
State fraud bureaus. States
conduct extensive anti-fraud efforts, funded by taxpayers and insurance
companies. Most states, for example, have anti-fraud agencies that investigate
suspected insurance swindles and refer cases for prosecution.
Police and other law enforcement. Federal, state and local law enforcement all investigate insurance cases, often jointly with insurance companies.
Prosecutions. Taxpayer-funded prosecutors devote considerable time and resources to pursuing fraud cases in court. Many cases are complex and require extensive time and expense to earn convictions.
Federal government. The federal government annually spends several billion dollars fighting Medicare and Medicaid scams. This diverts scarce taxpayer resources
All of the
efforts to pursue medical care crime cost a great deal of money and will cost
more in the years to come.
To date, $80 Billion a year is lost to
Americans through insurance fraud: That figure is the equivalent of providing a
new car or truck for 2.4 million drivers, enough for every driver in Oklahoma.
You could buy 219,280 new homes, an amount equal to half of annual home buyers
in the U.S. We could fund global humanitarian aid for more than the next three
years. We could finance UN peacekeeping for nearly ten years. We good people
could fund federal cancer research and training for the next sixteen years, or pay
8.75 million in-state students’ tuition for their first year at a four-year
public undergraduate university; or we might pay salary of every high school
teacher in the U.S. for two years.
There is another way of looking at
that large sum of money that is now lost to us. Think of insurance criminals
creating their own company. That company would rank in the top 10 percent among the
Fortune 500 in yearly revenue. It would be 35th overall in the nation. However
you look at it, eighty billion dollars is a lot of money—too much to throw away
to crooks or by losing it in foolish ventures.
It is generally
accepted that only somewhere around ten percent of all medical fraud and crime
are detected, investigated, brought to trial, convicted, and pay significant
fines, and/or serve prison terms. An important reason for that low incidence is
that there are not enough law enforcement officers to handle the loads. We need
more people, money, and training, to improve by 20-30%. The DOJ and FBI
estimate that
$2.7 billion could be saved by improving oversight, stopping fraud, and abuse,
within the Medicare Advantage and Medicare prescription drug programs alone.
Lest you think I am exaggerating, let me share
some examples:
In 2001, HCA [Hospital Corporation of America]
reached a plea agreement with the U.S. government that avoided criminal charges
against the company and included $95 million in fines. In late 2002, HCA
agreed to pay the U.S. government $631 million, plus interest, and to pay
$17.5 million to state Medicaid agencies, in addition to $250
million paid up to that point to resolve outstanding Medicare expense
claims over and above fines. In all, civil lawsuits cost HCA more than $1.7
billion to settle, including more than $500 million paid in 2003 to
two whistleblowers.
In July, 2010, the Medicare Fraud Strike Task Force announced its largest fraud discovery ever when charging 94 people nationwide for allegedly submitting a total of $251 million in fraudulent Medicare claims. The 94 people charged included doctors, medical assistants, and health care firm owners; and 36 of them have been found and arrested.
In July, 2010, the Medicare Fraud Strike Task Force announced its largest fraud discovery ever when charging 94 people nationwide for allegedly submitting a total of $251 million in fraudulent Medicare claims. The 94 people charged included doctors, medical assistants, and health care firm owners; and 36 of them have been found and arrested.
In October, 2010, a network of Armenian gangsters and their associates used phantom
In June, 2015, Federal officials charged 243
In April, 2019, Federal officials charged Philip Esformes
According to Medscape Medical News, August 9, 2019 (by Ken Terry), a
The indictment stated that from January 2015 to August 2018, Gooding participated in a
Gooding submitted or caused the submission of more than $12.7 million in claims to Medicare, the indictment alleges.
In 2010, the Delaware Medical Board suspended Gooding's medical license for 6 months after one of his patients died after receiving an injection to treat pain, He was also barred from administering cervical block injections.
The indictment of Gooding resulted from an investigation led by the Medicare Fraud Strike Force, which is a joint initiative of the DOJ and the Department of Health and Human Services. Since it was formed in 2007, the Medicare Fraud Strike Force has charged nearly 4000 persons who collectively billed the Medicare program for more than $14 billion, the DOJ press release stated.
And 2019 is only half over. It may eventually cause




