Define and Analyze the Problem
Medicare fraud refers to the claim of health reimbursement for a dishonest case with the aim of obtaining money illegitimately (Brooks, Button & Gee, 2012). There are various forms of fraud including knowingly submitting or allowing the submission of false claims, and faking information to obtain a Federal health care payment for which the person is not entitled (Karuppan, Dunlap & Waldrum, 2016). Healthcare fraud is also committed by referring patients to specific healthcare providers for personal gain, billing for non-existent services, billing for a non covered service as a covered service and billing Medicare for appointments that never happened (Medicare, 2016). People also report the wrong diagnosis and procedures offered, and bill for services based on falsified documents and bill for services of a higher complexity than those given or received (Ferenc, 2014). Medicare fraud is considered a prosecutable offense and attracts fines or imprisonment depending on the statute that the offender violated.
Medicare abuse, on the other hand, refers to the practices that directly or indirectly lead to unnecessary costs to the Medicare program or violate the patients’ rights of access to health care facilitated by Medicare (Karuppan et.al., 2016). They include falsified billing practices leading to unnecessary reimbursement from the carrier, making excessive charges for services rendered to patients, billing for drugs not received and up-coding or unbundling codes (Medicare, 2016). Medical abuse also occurs when medical practitioners charge different rates to different carriers, impersonification of Medicare officials to gain patients personal information and coercion into the sale of Medicare prescription drug card (Kinney, 2015). Medicare abuse is also experienced when patients are discriminated against by their age, ethnicity, race, health, religion, sex or income levels.
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Healthcare abuse and fraud is very prevalent and although it is hard to compile the data since some cases go undetected the known cases give a preview of the prevalence of the vices (Karuppan et.al., 2016). A 2017 insurance fraud and abuse report by the Insurance Information Institute shows that over $300 billion a year is lost to insurance frauds. The healthcare insurance fraud and abuse is a real problem facing the population health management procedure and affects all the stakeholders negatively. When the patients fail to take the drugs as prescribed because they sold them or some health practitioner denied them access to the drugs their health outcomes are compromised (Ferenc, 2014) . The government and other private entities spend billions of money on the research and development of new treatments and therapies. Once the fraudsters be they the patients or the healthcare practitioners interfere with the process, it compromises the findings of the research efforts. It leads to increase in taxes to fund the increasing cost of health services provision and endangers the patients' lives in case of falsified health conditions (Brooks et.al., 2012) . The need to control the vice is therefore imperative not only to reduce the spending on the healthcare sector but also to protect patients’ interests from any manipulative healthcare providers.
Construct Policy Alternatives
Measures have been put in place with the aim of curbing the healthcare insurance fraud and abuse (Karuppan et.al., 2016). Healthcare fraud and abuse is a prosecutable crime, and there are established laws put in place aimed at dealing with criminals who perpetrate the fraud. These laws include the False Claims Act which protects the government against being overcharged like in Medicare fraud or being sold to substandard goods (Kinney, 2015). Violation of the Act attracts a fine of a fine amounting to triple the damages' cost and up to $21,563 per every claim, and if the victim presents the case under a criminal FCA statute, the accused can also face both fines and jail time.
The anti-kickback statute provides for the prosecution of individuals who solicit, offer, pay or receive money with the aim of getting referrals reimbursable by the healthcare insurance (Ferenc, 2014). If found guilty of such the accused is fined up to $73,588 and an additional amount of triple the amount of the kickback. The physician self-referral law also known as the stark law prevents physicians from referring their patients to health care providers with whom they partner or are related to (Kinney, 2015). If found guilty the medical practitioner can be fined an amount of up to up to $23,863 for every service rendered, be ordered to repay any claims and be excluded from all federal healthcare programs (Brooks et.al., 2012). The criminal healthcare fraud statute prohibits people from engaging in schemes or artifice to take part in Medicare abuse and fraud. Fines for these crimes differ, and they could also lead to imprisonment or both a fine and imprisonment. Civil monetary penalties law provides for the Imposition of civil monetary penalties for various fraud cases (Karuppan et.al., 2016). Penalties range from $21,563 to $73,568 and may also be charged based on the amount that changed hands during the fraudulent transactions mostly going to triple that amount.
The Evaluative Criteria
The efficiency of the legal process is likely to succeed if carried out diligently (Karuppan et.al., 2016). The putting in place laws against Medicare fraud and abuse acts as a crime deterrent since some people will desist from committing the crime for fear of getting fined or imprisoned (Medicare, 2016). The laws will also contribute to social equity since the fines are used in the improvement of health services provisions to the public, and it will protect all patients regardless of their age, race, religion or any other form of discrimination by stopping fraud (Brooks et.al., 2012). The law also states that if a perpetrator’s fraud results in the injury of a patient they can be imprisoned for twenty years and if the patient dies they can receive a life imprisonment sentence (Kinney, 2015). This provision further protects the patients’ health and discourages endangering fraudulent activities.
An Assessment of the Alternatives
The anti-fraud war can be won through the collaboration of the private and the public sector through a two-way information sharing arrangement (Karuppan et.al., 2016). There is an information asymmetry between the two sectors with the private center sharing information about fraudulent activities with low reciprocity on the public sector side (Medicare, 2016). The information sharing can be facilitated through the formation of anti-fraud task forces that incorporate both public and private sector stakeholders (Ferenc, 2014). They can also hold conferences during which pertinent information to the fight against Medicare fraud and abuse is shared to further reduce the occurrence of the vices in the healthcare sector.
Prepayment review can also play a crucial role in the reduction of the Medicare fraud and abuse cases (Kinney, 2015). Since most of these problems stem from billing a thorough review of claims by both private and public insurers can help detect the fraud before it is paid for (Medicare, 2016). The implementation of the Reconciliation Act which repeals the previous statutory limitations on review of new providers gives insurers a chance to catch fraud and abuse before any money is paid. Implementation of the proposed review will go a long way in stopping the vices (Brooks et.al., 2012). More resources and funding is also required to boost the already existent anti-fraud Medicare programs through structural program changes and funding of research and development.
Conclusions
In sum, the battle against fraud in the healthcare sector is challenging, but with the right combination of policies, the number of fraudulent activities can be exponentially reduced (Ferenc, 2014). An implementation of the legal procedures together with the additional activities like prepayment previews, a collaboration between the private and the public sector and the investment of more money and research to bettering the already existent programs will help win the war against Medicare fraud and abuse (Karuppan et.al., 2016). For the government to improve the effectiveness of their fight against Medicare fraud and abuse they, therefore, have to incorporate the other policies into the legal framework already in place to deal with the perpetrators of fraud at all levels.
References
Brooks, G., Button, M., & Gee, J. (2012). The scale of health-care fraud: A global evaluation. Security Journal, 25 (1), 76-87. doi:10.1057/sj.2011.7
Ferenc, D. P. (2014). Understanding hospital billing and coding St. Louis, MO: Elsevier.
Karuppan, C. M., Dunlap, N. E., & Waldrum, M. R. (2016). Operations management in healthcare: strategy and practice . New York: Springer Publishing Company.
Kinney, E. D. (2015). The Affordable Care Act and Medicare in a comparative context New York, NY, USA: Cambridge University Press.
Medicare Fraud & Abuse - cms.gov. (2016). Retrieved October 31, 2017, from https://www.bing.com/cr?IG=79209E5EC2F34367BC3468D7B7930680&CID=2D 6A4B5E43AF67440D2D407242A966C7&rd=1&h=tDZnldTAn6EwyccVMaPwc03 LFU5HG208pr8j7KxAcuI&v=1&r=https%3a%2f%2fwww.cms.gov%2fOutreach- and-Education%2fMedicare-Learning-Network- MLN%2fMLNProducts%2fdownloads%2ffraud_and_abuse.pdf&p=DevEx,5064.1
