Presentation Transcript

1. Chapter 24 Code Blue Health Science Edition 4

   Fraud, Abuse, and Waste

2. Free Societies Western Civilization prides itself on having constructed a free society. Basic freedoms include the right to: Independent thought Free speech Freedom of religion Freedom to travel Freedom to start andconduct business
3. Freedom Brings Certain Responsibilities Freedom is the right to be wrong, not the right to do wrong. --John George Diefenbaker, 13th Prime Minister of Canada
4. Free Societies Free societies are based on honesty and trust This is especially true in the area of business, but it is also true in the area of healthcare.
5. Definitions Fraud is deception intended to result in financial or personal gain.
6. Think how much more difficult it would be to transact business if . . . Contracts could not be written because society as a whole didn’t keep promises Checks could not be written because people as a whole would write them with no money in the bank
7. Think how much more difficult it would be to transact business if . . . Credit cards could not be issued because people as whole would not pay make their credit card payments Banks could not loan money because society as a whole refused to make their payments
8. Think how poorly the healthcare industry would work if patients . . . Couldn’t trust that their physicians and nurses hadn’t cheated in school Couldn’t trust doctors to know and choose the best treatments
9. Think how poorly the healthcare industry would work if patients . . . Couldn’t trust hospital nurses not to steal their pain medications
10. Think how poorly the healthcare industry would work if patients . . . Couldn’t trust nurses and other healthcare professionals to report professional misconduct or observed errors in medication or treatment
11. Think how poorly the healthcare industry would work if patients . . . Couldn’t trust licensure organizations to weed out bad professionals REVOKED
12. Dishonesty and Fraud Is a major problem in both business and healthcare Costs patients, employers and employees billions of dollars Erodes the trust that is essential to a free society
13. Business Fraud Embezzlement Stealing trade secrets Overbilling Falsification of records Deceptive advertising Production of shoddy products And thousands of other practices that most people recognize as dishonest
14. Hospital Fraud Performing unnecessary services solely for the purpose of billing insurance or patients Billing for unnecessary excessive services Billing for more expensive products and services than were provided
15. Hospital Fraud Billing for products and services that were not provided Billing for the same products and services twice Inflating the diagnosis under DRG reimbursement to increase payment
16. Hospital Fraud Certifying that treatments that are not covered by insurance plans are medically necessary when they are not
17. Hospital Fraud Providing a false diagnosis to justify tests, procedures, products or surgeries that are not necessary Accepting kickbacks for patient referrals Waiving patient co-pays or deductibles and over-billing the insurance carrier or benefit plan
18. Hospital Employee Fraud Stealing hospital property Falsifying pay card data Stealing drugs Falsifying medical records And so on
19. Why do People Commit Fraud? Investigators have shown the following conditions are needed: A financial need on the part of the employee (it could also be a drug need for an addicted employee) An opportunity due to poor controls A low probability of being caught
20. What are the Justifications Employees Use for Stealing from Employers It was owed to me i.e. “I am not paid enough” Everyone else is doing it It won’t be missed I will pay it back later
21. The Incremental Effect Vary rarely does one go from being a totally honest person to a “crook” in one step. Usually it is a slow, incremental process. Studies show that people get involved in fraud one step at a time.
22. The Incremental Effect Having taken the first step It is easy to rationalize the second step It is sometimes necessary to take the second step to cover the first
23. Organizations Can Corrupt People will sometimes do things as a part of a group that they would never do individually. This is known as the “mob mentality.”
24. Issues of False Loyalty Investigators who have researched large corporate fraud have often found that those involved did it out of a senses of false loyalty to the boss or to the organization.
25. An Important Thing to Remember We love people, but we are loyal to principles. When an employer hires you, he or she buys your talent, time, and best efforts.
26. Personal Note During the years that the author was a hospital administrator, he was surprised many times by the lack of integrity showed by business organizations, healthcare organizations, and employees. Make a decision early in your career to be honest. Draw a line, so to speak, as to what you will never do and then never cross it.
27. Brannan Community Hospital Wes Douglas is discovering various instances of dishonesty and fraud in his hospital. The best way to correct this in the future will be to: Establish clear cut policies on employee behavior. Establish controls to prevent employees from stealing hospital assets. Establish a good audit program to see that policies and controls are working.
28. The End