Homelessness has butterfly effect on healthcare fraud


It's despicable how criminals use people as pawns in healthcare fraud schemes, especially those that prey on the homeless. Their vulnerabilities make them handy allies for fraudsters. Homeless people need money and aren't likely to report fraud. And tragically, they're in abundant supply. Many of the homeless who participate in fraud are drug addicts or mentally ill, and criminals have treated them like living ATM cards. Because in some fraud scams, body counts drive dollars.

California internist Ovid P. Mercene, M.D., for example, billed Medicare and Medicaid more than $1.8 million for needless services to homeless patients taken in groups to hospitals and skilled nursing facilities, according to The Whittier Daily News. The doctor pocketed roughly $700,000 in kickbacks for admitting patients who didn't need hospitalization. These patients traveled by van from skid row to the hospital where they were isolated from regular patients, the newspaper reported. The hospital supplied the homeless - many of whom had respiratory illnesses - with cigarettes. (That begs the question of what's happened to the better angels of our nature.) And after short stays during which they received needless medical tests, homeless patients were discharged to nursing facilities to generate new rounds of bogus billing.

Unscrupulous hospitals have used conditions that plague the homeless--including dehydration, yeast infections and exhaustion--as reasons to keep them admitted and maintain full bed counts. This rakes in more government money.  

A chain of Los Angeles medical facilities was caught enticing homeless people to undergo unnecessary medical tests later billed to Medicaid, as FierceHealthPayer:AntiFraud reported. One homeless woman received a nitroglycerin patch for a fabricated illness, which caused her blood pressure to plummet.

Texas physician Jacques Roy, M.D. was accused of perpetrating the nation's largest home healthcare scam ever orchestrated by a single doctor. The price tag was a whopping $375 million. Roy--whose medical license was later yanked-- reportedly certified patients for unnecessary home care services. The scheme merrily rolled along to bill government programs for additional needless care. One piece of the scam allegedly involved paying recruiters $50 for each new beneficiary they enlisted at a local homeless shelter.

These cases reinforce the point that healthcare fraud isn't a victimless crime. To control it, it's important not only to heap crushing consequences on perpetrators but also to dismantle their support networks. We need to work with stakeholders to take away the tools and resources criminals exploit. And that means fraud fighters have a business interest in combating homelessness.

Many worthy community relations projects and causes vie for health insurers' support. Many payer executives serve on non-profit boards and expect up-and-coming leaders in their organizations to do likewise. Connecting the dots between these activities and how criminals leverage the homeless to steal healthcare dollars, insurers should consider what they can do--even on a small scale--to help end homelessness in America.

Effective anti-fraud work involves seeing unexpected connections that are part of a greater whole. The tragedy of homelessness has consequences that eventually reach and deplete payer coffers. It's like a butterfly effect calling insurers to care about issues that seem wildly out-of-scope but actually aren't. - Jane (@HealthPayer)   

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