Weeding Out Bad Doctors: Preventing Healthcare Provider Fraud in Medicare & Medicaid

Topics: Financial Crime, Fraud, Government, Government Fraud, Government Regulation, Medicare Fraud, Risk Management

As our nation’s healthcare costs continue to go up and the government’s costs paid for programs such as Medicare or Medicaid continue to increase apace, becoming a Medicare or Medicaid provider can be lucrative practice for some doctors.

However, not every physician meets that standard. Providers must enroll and go through a screening process, meeting a number of criteria in order to be considered. For instance, providers can’t have a history of bankruptcy, civil suits, or large amounts of debt. They can’t have a serious criminal history, a revoked medical license, a disciplinary record, or history of substance abuse. Still, some medical providers who have those blemishes on their records sometimes try to fraudulently evade detection to become a Medicare or Medicaid provider.

What can the government do to weed out these bad actors? The answer may be in harnessing the power of data during the on-boarding process.

This conversation was the basis of a recent Thomson Reuters-sponsored webinar, conducted in partnership with the National Health Care Anti-Fraud Association (NHCAA). The webinar, titled Provider Enrollment Fraud: The Power of Prevention Through Data, featured Robert Bolduc, current federal probation officer and former investigation supervisor for the Florida Department of Health. Bolduc was joined by Melissa Berry, Principal Attorney Editor for Thomson Reuters, and Eric Gerhard, Manager in Product Development at Thomson Reuters.

The audience asked several questions throughout the webinar, and the presenters responded with the following answers:

If a provider receives most of its revenue from one procedure, is that an automatic red flag that fraud is occurring?

Bolduc: Not necessarily. A provider could certainly specialize in certain procedures or it may be related to the demographics of the area they serve. I would look at all available evidence and other red flags. Now if that one procedure is also paid out a high rate in comparison to similar procedures, that may be a red flag by itself.

For example, a common payment fraud scheme in Florida is to charge the billing code for chiropractic services but use lower professions to perform the service, such as a registered chiropractic assistant or a licensed massage therapist, instead of the actual chiropractor. So, the patient actually ends up getting a massage from a therapist, but it is billed as if the patient received chiropractic therapy. In the most blatant cases, unlicensed individuals would perform the services, which can be a felony in Florida.

Another example is the rampant compounded pain cream fraud related to TRICARE. We started noticing this being billed excessively, and the payouts were quite high. A lot of these cases revealed that these expensive creams were made with very cheap, common materials that were often not even effective or medically necessary, and that some patients were being offered kickbacks.

Are the red flags you discussed specific to Florida or in general for Medicaid and Medicare? Can these also apply to commercial lines of business?

Bolduc: The red flags I discussed were based on my observations, training, and experience as an investigator assigned these types of cases in Florida, specifically the Central Florida area.

That being said, I think the basic concepts and red flags could apply to most types of commercial fraud and especially to insurance fraud in general.

What’s a good cross-reference approach to determine if a provider is located outside of the country?

Bolduc: Social media and other open-source intelligence is probably the best tool for this, especially for corporate investigators. Next to this, interviewing patients would be a good option; however, you must be mindful if they are loyal to the practitioner (especially if they are involved in the fraud as well and getting drugs or kickbacks).

A more intensive approach for law enforcement agencies would be physical surveillance and subpoenas or warrants for records such as cell phone data and bank statements. Law enforcement agents could also develop contacts with some agencies within the U.S. Department of Homeland Security, such U.S. Customs and Border Protection, which would likely have access to international travel records.

How can prevention software tools be used to identify fraudulent providers using post office box addresses?

Gerhard: Some software tools flag and score post office box addresses and alert users to a potential address issue which could be tied to fraud. Using post office boxes is one of many factors that are looked at to determine fraud-including adverse information such as bankruptcy, liens, judgments, lawsuits, and healthcare sanctions.


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