HEALTHCARE FRAUD, ABUSE AND WASTE

Healthcare fraud, abuse and waste are problems that affect all of us either directly or indirectly. Global estimates project that billions of dollars are lost due to healthcare fraud, abuse and waste on an annual basis. These losses lead to increased healthcare costs and potential higher than CPI increases in contributions.

Healthcare fraud, abuse and waste exist on a continuum. This continuum helps illustrate the level of intent to deceive that a medical service provider or medical aid fund member has. Figure 1 depicts the healthcare fraud, waste and abuse continuum. Beginning on the left, is waste. Examples of waste include the unbundling of procedures by healthcare providers. Healthcare providers may overbill by unbundling medical procedures and charges that should be billed together at a lower rate. In the middle of the continuum is abuse, which is identified with behaviors such as the up-coding of procedures and claims for services that are not reasonable and necessary. Finally, there’s fraud, which is an aberrant behaviour, aimed at deceiving Medical Aid Funds amongst all other affected parties.

What is healthcare abuse?

Healthcare abuse is similar to fraud, except it refers to cases in which criminal intent can’t be easily proven. Healthcare abuse is reckless disregard or conduct that goes against and is inconsistent with acceptable business and/medical practices resulting in greater reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for healthcare. Although the law distinguishes between healthcare

fraud and healthcare abuse, the end result is the same to medical aid funds – the medical aid fund ends up paying money for something that shouldn’t have been reimbursed.

The most common types of abuse committed by healthcare professionals and service providers include:

• “Up-coding”- misusing codes on a claim and billing for a more costly service than what was performed;
• Charging excessively for services or supplies;

• Billing for services that were not medically necessary; and

• Pharmacies selling members high-cost devices or medication, often several times per year, in surplus to their needs and submitting the claims to the fund.

What is waste?

Waste is overutilization of services or other practices that, directly or indirectly; result in unnecessary costs to the healthcare system. It is generally, not considered to be caused by criminally negligent actions, but by the misuse of resources.

The most common examples of waste committed by healthcare professionals and service providers include:

• Healthcare professionals writing prescriptions for expensive medications when low-cost generic alternatives are available;
• Doctors performing inappropriate or unnecessary procedures;

• Overutilization of laboratory testing when it is not necessary;

• Using high intensity diagnostic tools when a

lower intensity tool is available; and

• Consistently selecting a surgical option when non-surgical options are available and effective.

The impact of healthcare corruption

The overall impact of corruption in healthcare on society and on individuals can be much larger than

the monetary value of the sums involved. Corruption in healthcare may lead to a provision of services or procurement of equipment and medication at above market prices. Furthermore, corruption in healthcare may threaten the goal of universal health coverage as the price of healthcare increases; the accessibility decreases and increases inequality in health status between socio economic groups.

When healthcare providers commit fraud by submitting false claims to medical aid funds, they have to alter the patient’s records to support those claims. If that’s never corrected, it means the patient’s medical history is inaccurate, which could lead to an incorrect diagnosis or treatment in the future. A medical identity theft victim may unexpectedly fail a physical exam for employment because a disease or condition for which he/she was diagnosed for or received treatment for has been unknowingly documented in his health record.

Every time a false claim is paid in a patient’s name, the dollar amount counts towards that patient’s benefit limits. This means that when a patient legitimately needs his or her medical aid fund benefits the most, they may have already been exhausted.

There have been many cases where patients have been subjected to unnecessary or dangerous medical
procedures simply because of greed.

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