1.0 Abstract

Health care fraud is a crime addressed by federal and state laws. It is among the leading offenses committed by health professionals. There are many forms in which fraud is committed in the department of health. These include making dishonest health claims in a bid to make profits. The deception is done by health care practitioners and individuals as well. Health practitioners commit fraud by taking subsidized drugs or drugs not supposed to be sold and selling them in the black market to make profits. Charging for services they never rendered, duplicating files for service provided to gain double, intentionally giving incorrect diagnosis to maximize payment during the unnecessary procedure, altering medical reports, among others. Members commit fraud by lying about their status when seeking medical attention, acquiring drugs in an aim to sell, giving other people their insurance cards, fording another person identified with an objective to use their insurance card. When fraud is committed, the customers felt the cost. Due to the rise in fraud statistics shows for every dollar, 10 cents goes toward fraud health care cases. Measures need to be taken to address the issue. (van Capelleveen, (2016).)

1.1 Introduction

Different incidents in the health care industry are considered fraudulent. The fraud cases have escalated into problems that affect ordinary citizens. They can be done by doctors, physicians, and other personnel in the medical field. There are cases where medical practitioners commit fraud or take part in corruption in a bid to make profits. A study conducted by PKF littlejohnLLP and the University of Portsmouth showed areas in the medical field where fraud can occur. The report indicated an estimate of 6.19% average loss from frauds committed in healthcare. Deceit in this field industry affects not only patients but the community at large. There are ethical issues that arise as a result of fraud. Families are charged with services that were not performed or unnecessary for the practitioner to make a profit. Some do not afford these services and make them be deep in debt and broke. As of 2011, fraud cases had coasted the united sate USD487 billion. (Busch, (2012).) The federal bureau of investigation, in collaboration with inspector general have the mandate to investigate these cases.However, insurance is paid after every 30 days giving the investigation little time. Yet in case one is convicted of health care, the hefty fraud penalty is imposed, and the practitioner can lose their incense and denied a chance to continue with their profession in this industry. Fraud affects not only the individual but the economy at large. The purpose of this report is to address issues aligning with healthcare fraud, and how if affects the political and economic sector, and ethical question that arise from fraud, and try to come up with recommendations that can help solve the issue.

1.1.1Examples of fraud in health care sector

There are numerous fraud cases identified, particularly in the insurance sector. Doctors perform unnecessary surgeries and treatments in order to get high insurance payments. They accept kickbacks from patient referrals. Practitioner falsifies test to cover up their mistake. They were unbundling, meaning presenting non covered treatments as covered and billing a patent more than they are supposed to. Patient and insured people are the soft target for fraudulent cases. They are cases of patient fraud, such as not disclosing pre-existing conditions or exaggerating an injury to achieve a high insurance payout.

1.1.2 The fraud triangle

Fraud triangle analyses three issues that make on commit a fraud. The first reason is pressure. This can be internal pressure from family to provide more or desire to succeed in one’s career or external pressure that is from tough economic conditions. Financial problem can motivate one to commit. Health care practitioners undergo constant pressure to make more money for their employers and families. Employers expect a certain quota to be achieved and this makes the workers engage in fraud. Second reason is opportunity. Health care examine the opportunity they have and the less risk associated with being caught. They are often under immense pressure and seek opportunity to make more money. Doctors can order patients to have unnecessary test since they have that opportunity. Hospital can also take the opportunity of invoicing huge amounts for procedures not done. Ignorance from patients has resulted in health caretaking the opportunity to exploit them. The third reason is rationalization. The event occurs before a person commits fraud. This is when a person justifies the reason before committing fraud that makes it a justifiable act. They may not see the action as fraudulent. For example, a doctor can order an unnecessary test and justifies himself by saying the text was ‘just in case” in order not to miss any detail.

1.2 Economic implications of fraud

There are many hidden cost of medical fraud. The United States has lost over USD 487 billion due to fraud. People bear the cost as these cases arises. People are drained financially when doctors orders unnecessary treatments. It takes valuable health resources for those who actually need the services. A survey conducted showed that 20.6% were unnecessary. It was cited to be caused by fear of malpractice by health care practitioners and demands by patients. Insurance cover pays for services not rendered and this make other people suffer who are in dire need of health care coverage. People are forced to take loans and sell of their property in order to settle hospitals bills. It becomes a burden especially to poor families who undergo economic strains. This can lead to increase in poverty and spread of infectious disease. It cost the government a lot trying to educate people about infectious disease and provide medical support to them this issue can be avoided if the was transparency in the health care system.

1.3 Legal implication of fraud

Health care fraud refers to a crime where a person uses deceptive means for self-benefits. It is addressed both by the federal laws and state laws and serious penalties applied to those found guilty of the crime. If a person is convicted of intentionally committing the crime, consequences include, prison,. False allegation to Medicaid or Medicare claim can result to 5 years prison sentence and one can serve up to 10 years when convicted with a federal health care fraud. Causing intention harm to the a person can lead to 20 year imprisonment and fraud that results to death can lead to potential life sentence. Fines are also applied which can be result to billions of dollars for serious cases. There restitution where a judge orders defendants to compensate the illegal money acquired through fraud. There is probation where they are deterred from committing other crimes. (Simborg, (2011).)

1.4 Ethical implications of fraud

Ethical issues arises when healthcare practitioners are not honest in the work ethical issues arises when the doctor lies to the patient about their conditions and order for more test to be done for personal gain. Ethical issue arises when health care lies to the insurance company in order to receive huge payment. It also arise when practitioners creates false evidence in order to cover up for their mistake. It is not ethical to charge patients more than what they should have paid. People also have some ethical concern when they do not reveal true stats of their pre-existing condition, thus endangering others or when they exaggerate their illness to receive huge compensations. There are ethical concerns in relation to fraud and can result to serious conviction and even death. It is unethical to charge a family that is barely affording to pay medical bills. This will only make them drawn more in debts and poverty.

1.5 Recommendation

However, these fraud cases can be managed if necessary recommendations are taken to address the issue. They include (Stowell, (2018).)

The government should use system developed by the private sector which detects health care fraud and can catch fraudster before they actually commit the crime. The government should also encourage program integrity education which medical schools deans and department chairs will be charged with the responsibility of ensuring students are taught in the curriculum on malpractices and consequences. Program integrity training should be introduced in these fields

Tough legal measures should be put in place to punish fraudsters. They should use the front-end analytic to strengthen their investigation. The CMS uses fraud prevention system that uses algorithms to monitor incoming payments and can detect fraud cases in the ministry. guidelines need to be followed in punishing offenders as outlined by the inspector general

Commercial insurance government programs and individuals should be cousious in their payment to practitioners to ensure they do not fall victim of fraud. They should suspect payment of any suspicious acts and share the information with the anti-fraud team. Hospitals should encourage delivery of bad news early so that the issue can be addressed before it is out of control

Hospital should also work with a team of consultants in order to learn more about compliance issues. The hospitals should instill a culture of compliance. There should be training of employees and serious follow up of hospital records. The hospital should build a reputation of being committed to doing the right thing. Hospitals should employ enterprise risk management to ensure smooth operations by identifying possible event and minimizing risk.

Fraud can result in the death of a patient. A nurse was sentenced to ten years for cheating Medicare and private insurance more than USD20 million. The practitioner gave false radiology reports from his company that led to the death of two patients. There are serious consequences that may arise as a result of fraud. Health care management should ensure to train their employees and guide them towards working ethically and refraining from fraudulent activities that can destroy their lives and careers once caught. Practitioners need to understand the principles of their patients and families hence be ethical in rendering their services. The issues can be resolved with the use of ERM that will make these industries accomplish their objectives and set a business plan that will see internal control, risk, and fraud measures and protect their overall employees and patents, making the industry effective and transparent in their operation.

1.6 Conclusion

In summary, there is a widespread problem of fraud cases in the united states. These have resulted in families draining their resources and health care workers losing their license for the practice. There is a need for enterprise risk management (ERM) to help address the issue of fraud. People need to be educated that pressure opportunity and rationalization drives one to commit fraud and be taught on ways to prevent it. A combination of these implementations awareness and education will make the united states stop fraud cases in the health care industry.

References

Busch, R. S. ((2012).). Healthcare fraud: auditing and detection guide. . John Wiley & Sons.

Simborg, D. W. ((2011).). There is no neutral position on fraud!. Journal of the American Medical Informatics Association, 18(5), , 675-677.

Stowell, N. F. ((2018).). Healthcare fraud under the microscope: improving its prevention. Journal of Financial Crime.

van Capelleveen, G. P. ((2016).). Outlier detection in healthcare fraud: A case study in the Medicaid dental domain. International journal of accounting information systems, 21, ., 18-31.

Health care fraud