Healthcare Fraud

Healthcare fraud tends be “under the radar” for most of us, surfacing when authorities arrest those accused of such behavior or when guilty verdicts are announced, and usually in stories buried on the inside pages of the newspaper.

While it is widely acknowledged to be a serious problem, costing the government and private insurers tens of billions of dollars, it is very hard to get factual data. The numbers that reach the press are of perpetrators who are caught. The number of schemes that go undetected is impossible to quantify.

It is also a world-wide problem, not just a North American issue. The National Academies estimated in 2018 that of the $7.35 trillion spent globally on health care, some $455 billion was lost to fraud. Investigators in China estimated that 10% of healthcare spending there was wasted due to fraud.

Fraud can take many forms. The most obvious is to bill insurers for services not rendered. A New York-based cardiologist was arrested for billing Medicare and Medicaid $1.3 million for Covid testing that was never done.

More commonly, billing can be done for expensive services and equipment that are unnecessary. Companies “cold-call” people and offer braces and electric-lift chairs that will be “free” if their doctor authorizes them. One brazen scheme involved gathering homeless people who were on Medicaid and paying them small sums to go to a testing center for a panel of totally pointless but expensive tests for fabricated diagnoses.

Twelve physicians in Ohio and Michigan were sentenced to prison last year for a scheme that required narcotic addicts seeking prescriptions to undergo spinal injections, which are richly reimbursed, before getting their prescriptions.

More subtle and more widespread is “up-coding,” providing a service but billing for a more expensive one. Take the office visit. Billing for such visits can be done at one of five tiers based on the complexity of the problem and time needed to deal with it. The higher the level, the more the payment. A Massachusetts orthopedic surgeon was charged in March of 2022 for billing top-level visits for as many as 90 patients a day – meaning that in one work-day he was claiming to do over 60 hours of care! To a lesser degree, this practice is very widespread.

Technology has unfortunately made fraud easier. The typical electronic medical record allows the user to populate a note with detailed history and physical finding with a few clicks, whether or not these were done.

Telemedicine, a boon for many during Covid lock-downs, also provided a fertile field for the unscrupulous. One of “America’s Frontline Doctors,” the headline-grabbing vaccination deniers, lost her license for providing ivermectin and hydroxychloroquine after 1-2 minute on-line visits for which she billed $90. Telemedicine visits for addiction counselling are supposed to last 45 minutes. The Recovery Connection Centers of America billed insurance programs millions of dollars for visits that lasted an average of 5 minutes federal authorities alleged last month.

Why should you care? Ultimately, whether through taxes or health insurance premiums, it is your money that is being wasted. When you suspect fraudulent billing, report it.

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