Fraud on the home front: Case lessons for payers and providers


Sometimes trouble is closer than we realize.

Lately I've noticed reports of fraud-related criminal prosecutions of those who work with doctors--from physicians' assistants and nurse practitioners to administrative staff and billing agents. It's more common to see these persons named in civil lawsuits brought by relators under the False Claims Act; but the government may investigate and prosecute all who lie deliberately for unentitled gain.

Remember the Florida fanny pack incident that exposed Medicare fraud? Carmen Ortiz-Butcher, M.D. asked an employee to mail her brother a fanny pack, but what he received instead was a wad of fake prescriptions supposedly signed by his sister. The brother contacted authorities. It turned out the doctor's secretaries received money to produce false prescriptions that local pharmacies billed to Medicare, often without dispensing any drugs. Ortiz-Butcher's prescription drug claims jumped from $181,000 to $4,973,000 in four years.

Ortiz-Butcher's secretaries pleaded guilty to conspiracy to commit healthcare fraud and aggravated identity theft. This hit her like a bucket of ice water in the face. 

"When you trust people in your life to work with you, and that trust is violated, it leaves a sense of emptiness that's insurmountable and also makes it very difficult to trust again," Ortiz-Butcher told ProPublica.

Earlier this month, a national medical billing firm agreed to pay $1.9 million to settle allegations of Medicare and Medicaid fraud. Medical Business Service, Inc. was accused of falsifying diagnosis codes to get previously-denied claims paid on behalf of radiologists.

"The healthcare providers who contracted with MBS placed their trust in the company to correctly process claims and not submit fraudulent information to the Medicare and Medicaid Programs," Derrick L. Jackson, special agent in charge of the Office of Inspector General in Atlanta, said in a Department of Justice announcement.

And last week, a physician's assistant in Miami was sentenced to 15 years behind bars and ordered to pay more than $85 million in restitution for his role in a $200 million Medicare fraud, the FBI announced. Robert Bergman, P.A.--along with more than 20 others--participated in a scam involving false claims for partial hospitalization services claimed by American Therapeutic Corporation. Conspirators fabricated and signed bogus documentation to support inflated billing.

There's rich learning in these cases. All three involved betrayal of professional and public trust. But trust must be earned and faith must be kept on the job through consistent right action. And right action shouldn't always be assumed.   

It's almost as if these cases write an old but useful saying in bold letters across the sky: "Trust, but verify." Verify that employees and business partners are playing by the non-negotiable rules of government business. Verify the integrity of work performed. Audit and monitor high-risk functions on a regular basis.

These cases show the importance of compliance programs to provide the self-checking, training and reporting avenues that help discourage and catch misconduct. Insurers and providers need strong compliance programs because fraud and error can get out of hand without them.   

Employees at all levels face pressures at work and can be tempted to cheat. Not everyone can resist the lure of easy money. Furthermore, corruption in some organizations is a cultural norm, and ethical impulses there are like thin seedlings struggling to push their way through rock.

At the end of the day, responsibility for fraud can be far flung. Insurers and providers should look long and hard at those they work with for possible problems. - Jane (@HealthPayer)

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