Health care Fraud Fraud can cause significant loss for a health care organization. By recognizing how would-be fraud perpetrators initiate and conduct fraudulent billing schemes, it is possible to identify, stop and prevent fraud. This article presents significant points to consider when examining an organizations internal accounting systems and offers real-world examples of fraud that have taken place in the health care industry.
Fraud is the one element people hope never surfaces in their organizations. It can create a culture of fear and mistrust, leading to questions and assumptions, with the ability to severely cripple or destroy an organizations reputation and financial solvency. Most people think fraud would never happen in their companies. Unfortunately, according to a recent report by the Association of Certified Fraud Examiners (ACFE), companies are estimated to lose 6% of their annual revenues to occupational fraud (Maas, 54).
"… Its the perfect crime; from needles to bandages to lab tests and claims processing, the health care industry is awash with an extraordinarily high volume of products, services and transactions moving through different organizations on a monthly basis … the type of health care billing schemes someone can initiate is only limited to their imagination," according to Christopher Nickell, a leading fraud auditor and health care expert. "…A recent audit of three small, rural based health care organizations consisting of (1) a third-party administrator, (2) a primary care physician practice and (3) an outpatient rehabilitation center found them to have a combined total of 628 vendors on file with a one-month disbursement totaling 1,447 payment transactions for goods and services" (Hast, 1).
From pencils and paper, to medical supplies, equipment and other miscellaneous items, the list can be extensive and exhaustive. Thus, one can clearly see how this creates an appetite for fraud, which constitutes a staggering amount in losses for health care organizations.
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