4 Common Types Of Healthcare Fraud and How You Can Avoid Them

The healthcare sector in the United States offers some of the highest-paying jobs in the country. But, it also loses a large amount of money on healthcare fraud and malicious practice. As a result, healthcare fraud is a high-priority matter for the federal government and a primary concern of federal law enforcement.

According to the Medicaid Fraud Control Units Fiscal Year 2015 Annual Report, more than 1,100 cases out of the 1,553 convictions reported in the United States involved medical fraud, and over 400 cases were related to neglect and abuse. The judiciary system has announced approximately $744 million in criminal and civil recoveries related to Medicaid fraud and abuse.

Numerous complex legal requirements apply to hospitals and other medical care providers when dealing with providers, suppliers, and other companies. A medical care center’s compliance program comprises policies, protocols, and other compliance documents that can enable the compliance officer to know how to function.

4 Common Types Of Healthcare Fraud and How You Can Avoid Them

Read the following points to know about some of the common types of healthcare fraud and learn how to avoid them.

1. Wrongful Data Entry

Healthcare providers can earn more money by filing records reflecting that they treated or attended to a patient on two separate days rather than on one day. Each consultation visit means that a physician rendered his/her professional services, which can be counted as a distinct billable service. Such physicians often enlist fraudulent services in the claims form with incorrect dates because it’s more profitable for the providers.

Tip: Enhance the Hospital’s Documentation Procedures

As the owner of your healthcare practice, you need to eliminate all possibilities of wrongful documentation. Conduct an internal audit of medical records, medical bills, and patient charts to confirm that the documentation is complete, accurate, and free of discrepancies. Review your established processes for prescriptions and equipment labeling to assure that your staff is working according to the compliance program.

2. Violating Joint Commission Standards

In the United States, hospitals are monitored by the Joint Commission to evaluate their performance. The evaluation process of the Joint Commission includes National Patient Safety Goals to ensure that healthcare providers give safe and high-quality care to patients.

These standards are equally beneficial for healthcare setups, as they can help avoid situations that fall under hospital healthcare fraud. The lack of stringent security measures can make it easy for people with vested interests to cheat you. In fact, several fraudulent practitioners bill patients for the care that they never rendered by altering description of services, location of services, and prescriptions, or by billing for a service not covered under their insurance policy.

Tip: Educate Your Staff About National Patient Safety Goals

Running a healthcare setup means taking steps toward establishing transparency in hospital processes. National Patient Safety Goals help hospitals adhere to the standardized level of care that needs to be given to the patients. Conducting training sessions for staff and introducing simple modifications to your existing procedures can help avoid lawsuits for violating Joint Commission standards.

As a regular practice, ensure that correct information is documented about a patient’s diagnosis, treatments, and medicines, and is shared with the correct people. Make sure that each patient understands the benefits and risks involved in undergoing certain treatments. The National Patient Safety Goals emphasize that hospitals need to provide advanced medical care that is easier on the pocket as well. Hence, along with the patient, even the physician should be up-to-date with the medicines prescribed to the patient and replace the outdated ones with the most economical ones available on the market.

3. Over-utilization of Services

Overuse of medical supplies and equipment for treatment by physicians can add to the final medical bills billed to patients. Such situations typically involve physicians prescribing medicines or services that aren’t really necessary. It is quite easy for unscrupulous healthcare providers to use this scheme on over-trusting patients. By doing this, they can earn extra commission.

Another way of overcharging patients is by recommending unnecessary tests and examinations that may not be included in a patient’s Medicaid cover. Certain hospitals with rehabilitation centers have been found to charge enormous amounts of money for their services, which may be higher than industry standards.

Tip: Introduce Bona-Fide Employment Scheme

A bona-fide employee is one who is compensated with a salary that isn’t less than $455 per week. His/her role includes attending to patients and directly handling business operations of the hospital. Hiring employees on bona-fide contracts can dissolve the ownership of the hospital among a handful of people. This is helpful in lawsuits, as the employee responsible for certain functions of the hospital can be held liable for wrongful practice. Both Stark and Anti-Kickback statutes include exceptions for bona-fide employees, wherein all payments made by an employer to an employee are excluded, even if the employee generates for referrals for the employer.

4. Corruption in the Form of Kickbacks and Bribery

Professionals in the healthcare sector are often caught accepting kickbacks and bribes. A kickback refers to payments made with the intent of influencing another party’s opinion or expecting a favor or reward from the latter. Medicare kickbacks include acts such as healthcare providers intentionally accepting payments, products, or services for the purposes of soliciting Medicare or other healthcare practitioners or businesses. Healthcare providers accepting or offering kickbacks and bribes have been known to unlawfully promote, pay for, or receive payment for referrals.

Tip: Ensure Reasonable Payment Structure

Earning extra wages is one of the biggest reasons why practitioners carry out unlawful practices. Ideally, hospitals need to pay physicians based on their productivity, while ensuring that they are sufficiently compensated for their work.

If you have an under-performing physician working in your hospital, don’t punish him or her by reducing the pay. Instead, introduce a pay-scale that rewards physician on the basis of productivity. Also, avoid hiking salaries to unrealistic numbers for employees with high productivity.

By implementing a comprehensive compliance program, you can identify potential vulnerabilities of facing a lawsuit. Also, following industry standards can minimize billing mistakes, reduce chances of fraud and abuse, and promote safe and quality medical care. This will, in turn, enhance the efficiency and reliability of your hospital.

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