For the past several years, the U.S. has been plagued with a series of investigations into healthcare fraud committed by doctors and facilities alike. Although there is often public outrage towards these perpetrators and concern for those who were taken advantage of due to such fraudulent activity, few people ever consider how those who commit such deeds affect the patients involved.
“These schemes tend to target insurance companies and government plans,” says Ileana Hernandez of Manatt, Phelps & Phillips. “The fraud is perpetrated against these third parties, not the actual patients.”
However, there are indirect victims of healthcare fraud committed by doctors and facilities alike who go well beyond insurance companies to include hospitals whose reputations may be marred due to security breaches. Hospitals and patients alike can suffer a tarnished reputation as a result of the guilty party’s actions.
“Often hospitals are implicated along with the perpetrators because the doctors will go into multi-disciplinary hospital practices or they may work in clinics that these hospitals own,” Hernandez says. “The fraud causes people to lose trust in those institutions. So that’s a more indirect effect of what happens.”
Hernandez says there are three general types of healthcare fraud committed, including the use of fraudulent billing practices, kickbacks, and performing medically unnecessary services. False billings occur when doctors submit insurance claims for non-covered procedures or services they have not performed. Kickbacks involve physicians receiving some type of compensation for the referral of patients to other medical professionals or clinics.
Physicians may also receive kickbacks by prescribing expensive brand-name drugs in lieu of less expensive generic alternatives. Unnecessary services occur when significant and costly measures such as surgery, hospital stays, and prescription medications are performed on patients who aren’t actually in need of such procedures if they were properly monitored during their treatment. The guilty party may also fail to remove surgical equipment implanted in patients after surgery, resulting in the patient having to undergo another expensive procedure for its removal.
“The reports of other types of schemes, including false certification for home health care, billing for services that weren’t rendered and upcoding with inflated diagnosis codes, have been steady,” Hernandez says. “Physicians and hospitals shouldn’t rely on national trends to predict what will happen in their backyard.”
Hernandez adds that even when such schemes are proven, the damage has already been done for those involved. This is because the guilty party’s case is then considered a civil suit, while federal authorities address any criminal actions against them.
“The victims are the insurance companies that have to pay higher premiums because of these practices,” she said. “One effect is that it makes healthcare more expensive for everyone. The hospitals themselves are also victimized because their reputations may be affected by what has happened.”
Although numerous investigations have taken place across the country, there is no one set solution to ending healthcare fraud. “It’s hard because there are so many different ways that these schemes can be carried out,” Hernandez says. “The good thing is that more and more people are aware of the problem, and the authorities…are working very hard on this.”
Hernandez urges patients to make sure they truly receive the services they were promised. “You should ask for your tests to be repeated if you don’t think they were accurate,” she says. “Also, keep copies of all of the information you’ve received so that you can verify with your insurance company what has been authorized.”