Implementing Detection & Reporting Systems in the Smallest Of Organizations
Written by Joanne Byron, BS, LPN CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, OHCC, ICDCT-CM/PCS
This article outlines serious and real-life accounts of crime committed within the healthcare industry by healthcare professionals. It provides direction in order to detect fraud and abuse, and offers potential preventive measures. Emphasizing Ideas such as implementing internal auditing practices and routine monitoring within every healthcare organization.
Avoid Being a Target for Crime
Health care organizations, both large and small, have always been the target for white-collar crimes. The pandemic has created a time of crisis and opportunity for criminals. From embezzlement, drug diversion and billing fraud, health care will remain an easy target until C-Suite executives crack down on crime.
The phrase "white-collar crime" was coined in 1939 during a presidential address given by Edwin Sutherland to the American Sociological Society. Mr. Sutherland defined the term as a "crime committed by a person of respectability and high social status in the course of his occupation." Although there has been debate as to what qualifies as a white-collar crime, the term today generally encompasses a variety of nonviolent crimes usually committed in commercial situations for financial gain.
Embezzlement, corruption and fraudulent billing are at the top of the white-collar crimes committed in health care. As a health care consultant, with internal investigation experience, I have found it to be true that an ounce of prevention is worth a pound of “cure.” Learning more about how crimes happen and how to investigate and deter them, is critical in our environment today.
Many white-collar crimes are especially difficult to prosecute because the perpetrators use sophisticated means to conceal their activities through a series of complex transactions. Whistleblowers are particularly helpful because they report internal wrongdoing that may be invisible outside the company. There has been a steady increase in whistleblowing.
Smaller health care organizations, clinics and physician practices often fail to implement effective safeguards to deter white-collar crimes. Many times, it is due to lack of the ability to separate duties and conduct investigative or routine audits to detect internal problems. Typically, the talent needed is not available internally and providers are hesitant to spend the money to retain qualified consulting or accounting experts to monitor compliance of operations, of course, until it is too late.
According to the Federal Bureau of Investigation (FBI), white-collar crime is estimated to cost the United States more than $300 billion annually. Although the government typically charges individuals for white-collar crimes, the government also has the power to sanction corporations for these offenses.
A number of federal agencies, such as the FBI, the Internal Revenue Service, the U.S. Secret Service, U.S. Customs, the Environmental Protection Agency, and the Securities and Exchange Commission, participate in the enforcement of federal white-collar crime legislation. In addition, most states employ their own agencies to enforce white-collar crime laws at the state level.
Health care fraud is included in the list of the more common white-collar offenses identified by the government. When health care fraud is perpetrated, the health care provider passes the cost along to its customers. Because of the pervasiveness of health care fraud, statistics now show that 10 cents of every dollar spent on health care goes toward paying for fraudulent health care claims.
Practitioner schemes include:
- Individuals obtaining subsidized or fully-covered prescription pills that are actually unneeded and then selling them on the black market for a profit;
- Billing by practitioners for care that they never rendered;
- Filing duplicate claims for the same service rendered;
- Altering the dates, description of services, or identities of members or providers;
- Billing for a non-covered service as a covered service;
- Modifying medical records;
- Intentional incorrect reporting of diagnoses or procedures to maximize payment;
- Use of unlicensed staff;
- Accepting or giving kickbacks for member referrals;
- Waiving member co-pays; and
- Prescribing additional or unnecessary treatment.
Congressional legislation requires that health care insurance pay a legitimate claim within 30 days. The Federal Bureau of Investigation, the U.S. Postal Service, and the Office of the Inspector General all are charged with the responsibility of investigating health care fraud. However, because of the 30-day rule, these agencies rarely have enough time to perform an adequate investigation before an insurer has to pay.
Practice Administrators should be aware of being implicated in these types of schemes, whether it is intentional or not. Anyone in an executive position within a health care organization is expected to implement barriers to avoid schemes, such as those listed above. This is accomplished through effective compliance monitoring.
A successful prosecution of a health care provider that ends in a conviction can have serious consequences. The health care provider faces incarceration, fines, and possibly losing the right to practice in the medical industry. Violators may be prosecuted under: 18 U.S.C. 1347 Health Care Fraud.
- 18 U.S. Code § 1347 - Health care fraud
(a) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.
(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.
When White Turns Into Red Collar Crimes
Red collar crime is a sub-classification of white-collar crime. Perpetrators in this sub-group are referred to as red-collar criminals because they straddle both the white-collar crime arena and, eventually, the violent crime arena.
When criminals need to cover their tracks in circumstances where there is threat of detection, red-collar criminals commit brutal acts of violence. This is to silence the people who have detected their fraud and to prevent further disclosure. Although red collar crime appears to be a rare event in the U.S., this is not necessarily the case. Therefore, it is advisable for businesses to have a process through which white collar crime can be reported anonymously.
Murder for Hire: March 4, 2021, Case-In-Point
The Department of Justice (DOJ) announced in March 2021 that David Robinson (51-year-old pharmacist) was sentenced to more than 14 years in federal prison for a drug distribution conspiracy and murder for hire plot in Maryland.
David Robinson not only betrayed the trust placed in him as a pharmacist by diverting drugs in order to line his own pockets, he then attempted to have the person killed whom he believed had reported his abuses.
DEA investigators also learned that during Robinson’s tenure as a pharmacist working the night shift at a pharmacy in Waldorf, Maryland, he filled fraudulent prescriptions for oxycodone. Robinson admitted that he wrote prescriptions using the names of prominent athletes provided to him as the purported patients.
As detailed in his plea agreement for the murder for hire, following his arrest, Robinson told one of the confidential sources involved in this case about an individual that he believed had cooperated with law enforcement and led to his arrest. Robinson had a discussion about this person being killed. Robinson stated the fee would be $5,000 up front and $5,000 when the confidential sources was killed.
Clinical Drug Diversion – Is a Criminal Act & Causes Patient Harm
Another criminal activity which may be happening in your practice or hospital is drug diversion. This is when prescription medicines are obtained or used illegally. Healthcare providers, nurses, medical assistants and others who steal prescription medicines or controlled substances for their own use put your patients at risk.
Addiction to prescription narcotics has reached epidemic proportions and is a major driver of drug diversion. The Centers for Disease Control (CDC), state, and local health departments have assisted in the investigation of infection outbreaks stemming from drug diversion activities that involved healthcare providers who tampered with injectable drugs.
These outbreaks revealed gaps in prevention, detection, or response to drug diversion in U.S. healthcare facilities. All healthcare facilities should have strong narcotics security measures and active monitoring systems to prevent and detect diversion activities.
People who divert clinical drugs are unlikely to quit using them for the same reason as other people with addiction disorders: It is hard to do. They deny that they have a problem, they are ashamed, and they do not know where to turn for help. Does your organization perform random drug testing? Are there other ways to detect that there may be a problem within your practice, clinic or hospital?
Workforce members may (mistakenly) fear that seeking treatment will cost them their reputation, nursing or medical license, and their career. According to some studies, coworkers and other staff members may know that a colleague has an addiction and is diverting clinical medications, but are reluctant to report them for fear of jeopardizing their livelihood.
Conducting routine monitoring and investigations into potential drug diversion activity may help prevent staff from acting upon impulse. The Healthcare Associated Infections (HAI) Drug Diversion Planning and Response Toolkit for state and local health departments focuses on drug diversion responses to define best practices, provide resources informed by past drug diversion investigations, and recommend the enhancement of collaborations among public health agencies and partners representing regulatory affairs: law enforcement, health care facility licensing, certification and accreditation.
The CDC states that the appropriate response by health care facilities includes:
- assessment of harm to patients
- consultation with public health officials when tampering with injectable medication is suspected
- prompt reporting to law and other enforcement agencies
Compliance Officers, Human Resource Directors, Practice Administrators and others responsible for compliance oversight should know how to audit, monitor, detect and investigate concerns related to potential crime to mitigate risk. Learn More about becoming an Internal Forensic Healthcare Auditor, designed for Human Resources, Compliance Officers, Practice Administrators, Revenue Cycle Managers, Consultants and Subject Matter Experts.