As the health care industry became a profit seeking industry, it attracted all kinds of elements including criminal. While law
enforcement may not have been totally winning the war on violent crime, at least the convictions they did get carried stiff penalties. White collar crime is the complete opposite of violent crime. The motive is not the same, the rationale is completely different and the background of the individual is not something to be afraid of.
Couple all of this with the ease of creating a fictitious health care claim to receive thousands of dollars from a single transaction, and the flood gates have been opened. Health Care fraud is such an easy target for this reason and many others. It is not unusual for a health care carrier to cut a check for over $100,000 to someone it does not even
know. A carrier will often pay a claim from an entity that is unknown and for a service that is unknown. This is because Government has legislated that the claim must be paid within 30 days therefore, the carrier is mandated to pay out this huge amount. How much easier can it get. By the time you wake up millions and billions of dollars are lost
to out right fraudulent claims paid without scrutiny by the carrier.
Ten to fifteen years ago the first Anti-Fraud Units began appearing in health care carrier organizations. However, most fraud units are less than five years old according to the Health Care Finance Authority (www.hcfa.gov). The early units had to fight just about every obstacle imaginable. First, the carriers did not want a bad reputation. Therefore, limits were placed on their capabilities. Second, law enforcement had no concern for "white collar crime," this was left up to the companies to battle. Third, the penalties for committing a health care fraud were the equivalent of taking a long vacation on the beach.
This tells the story of why so many people have and continue to commit health care fraud.
Since that time, new reasons have emerged and a new faction of people have moved into the health care fraud industry. An overabundance of physicians, hospitals and a dwindling pot of money to pay for health care services has caused some medical personnel to commit fraud. Why someone would throw away a medical degree and license by committing a fraud has yet to be explained, except for greed.
Another faction of people that once prided themselves on committing street crimes such as gambling, prostitution, black mail have entered the health care fraud arena. This group is known as organized crime. Many Oriental and Russian Mafia rings were found recently defrauding several carriers throughout the country.
One of the most notable was the Russian Rolling Lab Scam. In this scam, a recreational vehicle (RV) would pull up to a shopping mall and open their doors. They would entice people to come and get their free cholesterol tests or blood sugar tests. All of these services were free with your health insurance card. Of course, they would bill the insurer for many tests that were never performed and had all the payments made to a fictious address. By the time the insurer wanted to find the lab
and audit, the RV was rolling to the next mall. This group of Russian Mafia defrauded several insurers of millions of dollars before they were caught.
Another case that I personally helped develop and testified in involved bribery and kick backs. This case was centered around two chiropractors in New Orleans. They devised a scheme to entice low educated workers with good health care benefits to come to their clinic. This scheme included paying these workers anywhere from $10 to $25 per visit, with additional money available if you brought a friend. The kicker was that the worker did not have to stay for the service, they just had to sign
the "Sign In Sheet" and leave. If that was too difficult, they could "sign in" for several weeks at a time.
This fraud cost the City of New Orleans, a private health insurance carrier in Louisiana and two federal benefit plans over $500,000. The penalty for committing such a horrendous act was a sentence of 72 months in a minimum security prison in Pensacola, Florida. I visited this facility and found the inmates playing tennis, jogging, and teaching
remedial classes to children. This seemed to be a real difficult lifestyle for someone to have to endure.
This gives you an idea of how and why health care fraud is easy to commit and enticing to many people. The Clinton administration and congress saw this and have taken steps to remedy these problems. However, they are too little, too late. The Department of Justice has made health care fraud number two on their list of priorities. However, the manpower, commitment and tools needed to make a difference are not materializing as needed.
The biggest obstacle to really making a difference in this crime is communication between law enforcement and the private community. Law enforcement does not know how to investigate health care fraud as the private community does, however they still refuse to openly work together to combat the "Bad Guys." All to often the "Bad Guys" know this and use it to their advantage. They can hit a lot of carriers a little at a time and because they are not allowed to talk with each other they do not know the scope of the crime. Therefore, the crime goes undetected or worse detected and unprosecuted.
I have personally been involved and developed hundreds of fraud cases over the last ten years. In my experience, I have seen whites, blacks, Oriental, Nigerians and others found guilty of fraud. Of these people, some were young, some middle aged, and some old. Also, they involved both males and females. Therefore, you cannot physically describe the typical fraudster. However, you can describe them socially and mentally.
According to the Association of Certified Fraud Examiners (www.acfe.org) three elements must be present for a "White Collar Crime" to occur. They are Access, Financial Need and Rationalization. The key out these is rationalization. The White Collar fraudster does not believe they have committed a crime, rather they were owed the money they took. Interviews that I have performed bear this out. I have heard everything from it was a mistake, to they owed this to me, to I was going to put it back. However, at no point do they admit I committed a crime.
When investigating the evidence in a health care fraud case, you can go to many places these days on the Internet. Some of these are:
1) www.medbd.ca.gov to see if a physician is in good standing with the board for that state.
2) Newspapers, magazines that are on-line to find articles relating to a person or company involved in a criminal situation. (Columbia/HCA Hospital is a prime example of this)
3) To locate someone there are many search engines to find a person or company such as www.411.com or Excite or Yahoo people finder.
4) Ernst & Young even advertises they are helping locate the owners of Swiss bank accounts. We all believe that criminals leave their money in Swiss bank accounts. You might start looking there.
5) One of my favorite ways to stay in touch with events daily is a site called www.pointcast.com. I can customize the news and data I wish to receive daily. I can get this data from various sources. Sources include the Wall Street Journal, the LA Times, CNN and categories include health care, government, medical and others.
However, the more detailed and useful databases that are available through a computer and a modem cost money. I have listed several of these below and depending on your needs may identify your culprit:
1) Dun and Bradstreet for corporation information.
2) Louisiana Secretary of States office for officer information and companies incorporated to do business in the State of Louisiana
3) The National Health Care Anti-Fraud Association has a database that lists open cases involving health care fraud. Also, it lists all sanctions levied against providers in the Medicare/Medicaid program. (www.nhcaa.org)
4) The National Insurance Crime Bureau lists all the claims filed against participating automobile insurance companies. (www.nicb.org) However, it contains bad health care providers as well.
5) The recently passed Health Insurance Protection and Portability Act (HIPPA) mandates that a database of adverse actions be created and maintained for health care providers that run into trouble. A fine of nearly $25,000 can be levied on a private company that fails to comply with this mandate.
To investigate a health care fraud case and be efficient, you must be able to gather data from several sources and databases are key. Typically a health care fraud case begins either with a tip from a patient or a RED FLAG from the claims database. Usually trend reports and other analysis of the claims data from the target are performed. However, rarely is this enough to prove a case of health care fraud.
The next step requires identifying all the known affiliations of the target and possibly even the unknown. Starting with the list above the Secretary of State's office is not a bad place to begin. Other places include the state board that oversees the target's specialty, the NHCAA PINS database for other carriers that have active cases on the target, and discussions with the law enforcement agents who work health care fraud. They can determine through other databases if any unknown
affiliations exist and the flow of funds through such affiliations. Now that you believe that you know the target's location, affiliations, and extent of their empire you still have more to get.
A recent example of this involved a case we are currently working. We identified our target, however after trying to locate his residence and driver's license number we came up empty. It was as if this guy did not exist and he was supposed to be an upstanding member of the community as a health care provider. Some searches on the Internet through address,
name and city showed this business had four other names in the last two years.
This lead us to believe that a secret owner was involved. A call to the Secretary of State proved our hunch to be true. The doctor seeing patients was not the owner of the business, thus this wreaked of fraud. Finally, a happenstance discussion with another member of the community revealed that a second secret owner was involved and was wanted by the
IRS for tax evasion. This is an excellent example of how utilizing the Internet and other databases can get to the heart of a case.
Additional evidence will be needed from the initial victim of the case, the patient. They will provide the indisputable account of what took place at the scene of the crime. First, you have to find them and their phone number. WWW.411.com and various other people finders are good at locating people and businesses where they may work. Now you have all the documented testimony of the victims and their eyewitness accounts, what's next?
Unfortunately, even your own attorneys are not usually familiar with the laws that should be used to arrest, prosecute or otherwise carry out justice. Therefore, you must research the laws and case law that will provide the authority that a crime was committed. Westlaw is generally the accepted expert package in this area. An on-line service is available and makes research of law and case law much more efficient.
As long as the cost of health care does not dramatically drop and the public demands choice in their health care coverage, we will see health care fraud as a huge problem. Today's estimates put health costs into the trillions for the United States and the fraud within that number as high as 10%. Now you can see the motive for most perpetrators of health care fraud. Please find the attached documents as evidence of my visitation to the required sites. For comments or suggestions on this
subject, please email me at PRAISE@EATEL.NET.
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