Running Head: Fraud and Abuse
Fraud and Abuse in the U.S. Healthcare System
June 12, 2011
People can be affected by healthcare fraud and abuse directly and indirectly. Fraud is defined as an intentional deception, false statement or misrepresentation made by a person with the knowledge that the deception could result in unauthorized benefit to oneself or another person. It includes any act that constitutes fraud under applicable federal or state law. Abuse is defined as practices that are inconsistent with professional standards of care; medical necessity; or sound fiscal, business, or medical practices. Intent is ...view middle of the document...
When it comes to patients, patients commit fraud and abuse insurers and subsidized federal programs to obtain preventable services, payments, and medical procedures. Private insurers play their role in fraud and abuse by subsidizing federal programs in order to dishonor medical claims and keep away from financial responsibility for essential medical services. Increased costs of fraud and abuse results in increased insurance premiums, taxes, and costs for medical treatment.
Fraud and abuse in our healthcare system indicates a priority of wealth over health, puts patients at risk, and hinders our national interest of quality care. Medicaid and Medicare are especially vulnerable to fraud because eligible individuals may never see their bill for services; it goes directly to a fiscal intermediary (for Medicare) or a designated payer (for Medicaid), (Barton, 2007). In a report made by Jessica Zigmond, Aghaegbuna “Ike” Odelugo speculated on how and why the fraud occurs, "This is a nonviolent crime and is often committed by very educated people, including businesspeople, hospitals, doctors and administrators. It reaches across all ethnic and racial lines." He added that healthcare fraud often preys on what he called an unsuspecting victim base of Medicare recipients: elderly citizens looking for care and attention. The Priority Health Fraud & Abuse department is targeting specific practices in an effort to recover funds and end fraudulent practices. Among these are identifying claims which have been incorrectly unbundled, tracking claims for controlled substances to discover abuse and auditing claims to identify duplicate claims and coding errors (Vorel, 2011).
Despite federal legislation and a commitment of millions of dollars to fight fraud and abuse, research suggests that less than 5 percent of the losses from fraud and abuse are recovered annually (Eberhart III, Hart-Hester, Pierce, & Rudman, 2009). After making more than $70 billion in improper Medicare and Medicaid payments last year, CMS should focus on five key strategies to help reduce waste, fraud, and abuse and improper payments in Medicare and Medicaid, according to a Government Accountability Office (GAO) report: strengthening provider enrollment standards and procedures, improve payment review of claims, focus post payments claims review on most vulnerable areas, improve oversight of contractors, and develop a robust process for addressing identified vulnerabilities, (“Urgent need for," 2011). In a report about OIG, Julie Taitsman stated “Good medical record-keeping not only ensures that you’re billing appropriately, it also promotes better patient care because everyone treating that patient should be able to see the full documentation of your patient encounter ("Is your doctor," 2011).
Vicarious liability allows for liability for a wrongdoing to be broadened beyond the
Original wrongdoer to persons who have not committed a...