The Need for Internal Forensic Healthcare Auditors

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The Need for Internal Forensic Healthcare Auditors

The exponential growth of technology and the internet, while facilitating patient care and providing uninterrupted accessibility of information, has opened doors to new risks.  Perhaps the biggest risk of all is health care fraud.  The National Health Care Anti-Fraud Association (NHCAA) considers health care fraud a costly plague on our health care system, which undermines our national economy and impacts every patient and taxpayer in America.


The NHCAA estimates that, of the approximately $3 trillion spent on health care every year, financial losses due to health care fraud range anywhere from $75 billion to $640 billion.  This means that 3% to 21% of annual health care spending is at risk of being lost to fraud.  Internal forensic healthcare auditors play a key role in the detection and prevention of these fraud schemes, and therefore require specialized auditor training to investigate instances of suspected health care fraud, such as medical identity theft.


For example, consider the following questions:

  • When performing routine auditing and monitoring at your organization, would your auditors know how to preserve evidence in the event they encounter potential fraud? 
  • Does your organization have any training for your billing staff to help them detect and appropriately report suspected fraud?


Detecting and Preventing Health Care Fraud

Our modern health care system relies upon an enormous amount of data spread across the health care claim adjudication systems of numerous payers.  This means that it is crucial for payers to have access to preventative and investigative information, so that they are able to successfully identify and prevent fraud.  After all, if you do not know about the most up-to-date ways of keeping your health care information safe, then you will be at risk of falling prey to the ever more sophisticated fraud schemes in today’s world.


The NHCAA mission is heavily focused on this need for increased payer awareness of fraud.  After all, their full mission is “to protect and serve the public interest by increasing awareness and improving the detection, investigation, civil and criminal prosecution and prevention of health care fraud and abuse.”  To accomplish this, they employ a unique partnership of private sector and government agencies to investigate potential fraud.


The Health Insurance Portability and Accountability Act of 1996 (HIPAA) has also played a key role in fraud investigations, as it firmly established health care fraud as a federal criminal offense.  It also paved the way for collaboration between public and private sectors by stipulating that the coordinated efforts of federal, state and local law enforcement against health care fraud should include “the coordination and sharing of data” with private health insurers. (From the NHCAA’s publication What the Data Reveals: The Evolution of Information Sharing in the Fight Against Health Care Frauds)


Overall, when it comes to prevention and detection, the NHCAA believes that a successful anti-fraud program ought to include:

  • Data analytics and aggregation
  • Sharing anti-fraud information among payers
  • Rigorous screening processes for providers entering a program or network
  • Innovative investigative methodologies
  • Continuous investment in an adequate and skilled anti-fraud workforce
  • Education about fraud risks for consumers and providers


One of the most common fraud schemes, particularly in Medicare and Medicaid, is medical identity theft.  Individuals at risk for medical identity theft include physicians and other providers.  There are two common medical identity theft schemes.  The first is the use of provider medical identifiers to make it seem that providers have ordered or referred patients to additional health services.  The second most common scheme involves using provider medical identifiers to make it look like a physician provided and billed services.


According to the Medicare Learning Network, a few ways that providers’ medical identifiers are put at risk for these types of fraud schemes include:

  • Signing referrals for patients they do not know
  • Signing Certificates of Medical Necessity (CMNs) for patients they know but who do not need the service or supplies
  • Signing CMNs for more than what patients actually need
  • Signing blank referral forms


The Centers for Medicare and Medicaid Services (CMS) note that proactive approaches to detecting and preventing medical identity theft include:

  • Managing enrollment information with payers
  • Monitoring billing and compliance processes
  • Engaging with patients so they are aware of the risks of medical identity theft.


Want to Learn More About Preventing and Detecting Health Care Fraud Schemes?

Consider the Internal Forensic Healthcare Auditor eLearn Training Program or the Internal Forensic Auditor Training Camp!


CEU Tracking Number: FRBLG1217.2

How to Earn 0.5 Continuing Education Units from This Article for CIFHA and OHCC Certified Professionals

  • Print and/or save a copy of this article for your records.
  • Document your answers to the following in case you are selected for a CEU audit:
    • What did you learn by reading this article?
    • How does the information in this article apply to your job or organization?
    • How did you use this information in your current job position or within your organization?
  • Supply the CEU tracking number in the description box of your online CEU Tracker.

You will need to produce this information if you are selected for a CEU audit or if you are late in renewing. You may use this article for continuing education units once every 24 months or every other renewal year.



| Categories: Compliance, AIHC Professional Articles, AIHC Free CEU Articles | Tags: CMS, Medicare and Medicaid, Compliance, Audit, Forensic Audit, Health Care Fraud, Continuing Education | View Count: (1944) | Return

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