August 6, 2021

Fraud, waste, and abuse are three little words that have impacted the rising cost of healthcare in a way that’s anything but little. Now, most are probably aware that U.S. health expenditures are growing at a rapid rate, and have been for many years. And while there are many reasons that resulted in the healthcare industry closing out 2020 with a whopping $3.8 trillion tab – ‘fraud’ is a five-letter word that can account for about $60 billion of it. So with an issue this common and costly, how can patients and providers help to stop it? 

What is it? 

Now, you’ve probably heard of fraud, waste, and abuse before and can associate each of them with nothing but bad news but what exactly do they mean to healthcare specifically?  

• Fraud is knowingly and willfully executing or attempting to execute a scheme to defraud a health care benefit program. Examples of this could be knowingly billing for services or supplies that weren’t actually provided, billing for nonexistent prescriptions, or altering claims forms or medical records to receive a higher payment. 
• Waste is the careless overuse of health services and could be done by conducting excessive office visits, writing excessive prescriptions, or ordering excessive laboratory tests. 
• And abuse includes actions that may either directly or indirectly result in unnecessary health care costs. This involves payment for items or services when there is not legal entitlement to that payment and the provider has not knowingly and or intentionally misrepresented facts to obtain payment.

Who can commit fraud? 

The answer to this question is pretty much anyone. This includes doctors, patients, billing services…you name it. That being said, as a healthcare provider – it’s your job to not only ensure that you aren’t partaking in any fraudulent activities but are also on the lookout for your staff, patients, and billing providers.

How do I prevent it? 

As a provider, it’s important to develop appropriate prevention policies for your organization that outline best practices for avoiding and detecting healthcare fraud, waste, and abuse. According to the HHS Office of the Inspector General, this program should “establish a culture within an organization that promotes prevention, detection, and resolution of instances of conduct that do not conform to Federal and State law, and Federal, State and private payer healthcare program requirements, as well as the organizations’ ethical and business policies,” and include some of the following components: 

• Implementing standards and policies that are specific to your organization.
• Providing training and education for doctors and staff.
• Developing processes to receive and log healthcare fraud reports and complaints as well as procedures to protect anonymity consistent with the Whistleblower Protection Act.
• Updating policies and procedures on a continual basis to meet changes in laws and regulations.

In helping to reduce and ultimately prevent fraud and abuse, it’s important for your organization to not only have the proper compliance programs in place but also take additional measures such as:

• Validating all member ID cards prior to providing healthcare services and making copies of each patient’s insurance card and driver’s license.
• Maintaining a treatment record for each patient and properly documenting the services provided, ordered, and prescriptions that are written.
• Ensuring that all bills or claims are submitted accurately and in a timely manner.
• Avoiding unnecessary drug prescription and/or medical treatment.
• Reporting any suspicious activity to the fraud hotline or filing it online. 

With billions of dollars lost each year to health care fraud in the U.S., and the costly impact an investigation could have on your organization’s reputation and revenue – it’s important to have the processes in place to detect and prevent fraud and abuse. Ensuring that your practice is meeting all areas of healthcare compliance, including a complete HIPAA program, is essential to keeping up with government standards and best protecting your patients.

So while the rising cost of healthcare might not be totally avoidable, having the right compliance programs in place mean that the expense of a HIPAA or fraud violation can be. And with the penalties ranging from fines of hundreds of thousands of dollars and some even resulting in jail time – proactively preventing incidents before they happen and ensuring complete compliance is priceless.