One Often Forgotten Cause of Healthcare Fraud...

October 27, 2016

With an estimated 12% of Medicare and 10% of Medicaid payments lost to fraud and other improper payments in 2015, it is no surprise that battling healthcare fraud is a high priority on the government's checklist. Let's talk about one rampant cause of healthcare fraud that doesn't get the limelight.

With an estimated 12% of Medicare and 10% of Medicaid payments lost to fraud and other improper payments in 2015, it is no surprise that battling healthcare fraud is a high priority on the government's checklist. In June of 2016, the Justice Department announced the largest healthcare fraud takedown in history with charges against 301 individuals totaling $900 million in false billing. Let's talk about one cause of healthcare fraud that doesn't get the limelight.


In an interview with NPR, author and professor of psychology and behavioral economics Dan Ariely discusses his experiments with over 30,000 people and what he learned about how we lie to everyone - especially ourselves. Here is one excerpt from the interview that I found particularly interesting:

"Across all of our experiments, we've tested maybe 30,000 people, and we had a dozen or so bad apples and they stole about $150 from us. And we had about 18,000 little rotten apples, each of them just stole a couple of dollars, but together it was $36,000. And if you think about it, I think it's actually a good reflection of what happens in society."

It is easy to identify the "big cheats" in healthcare fraud. For example, out of the 301 individuals charged by the Justice Department in June, Houston area family physician Dr. John Ramirez is accused of billing Medicare to the tune of $18 million for home health visits that were either unnecessary or simply not provided.


Let me start with a couple of personal stories:

1. During my 3rd year rural track rotation, I had a patient who was in complete heart block with a heart rate in the 30s. I pulled up his electronic medical record (EMR) and saw that the patient had seen a podiatrist just 1 day previously. The note read “RRR — Regular rate and rhythm”. Now it’s entirely possible that that patient developed complete heart block in 1 day, but it’s pretty unlikely.

2. During my internal medicine clerkship, we once had an orthopedic consult on a patient who was admitted for pneumonia. The consult note read “lungs are clear” which was entirely false for a couple of reasons: 1) I had examined the patient earlier the same day and 2) The Ortho resident doesn’t carry a stethoscope!

In both of these cases, no harm came to the patient so we just made a joke of it. Do these stories sound familiar? Can you think of similar experiences? If you are having trouble coming up with one, check out this KevinMD article from 2014 “The disturbing confessions of a medical scribe.” What am I trying to say? We are the little cheats. Yes I just said “We”. We can blame electronic medical records, declining reimbursement, increasing productivity pressure, increasing malpractice costs and a myriad of other environmental factors. But when it comes down to it, charging for something that was not done is simply wrong. No, it’s not always intentional — I’ve left plenty of canned dictations in my radiology reports. But when it is, it is fraud and we should recognize that.

Upcoding or upbilling may be so common that we no longer think of it as fraud. A 2008 anonymous survey of 110 interns from the University of Chicago Medical Center and two independent residency programs found 13% of respondents admitted to falsifying medical records but only 91% of rated such behavior as unprofessional. This explains why we don’t think about it in the same fashion we awe at the latest Medicare Strike Force Takedown. Rather most colleagues I’ve encountered think of it as a game — a game of “how many boxes can I tick to get paid what I’m worth?” But I would argue it’s a dangerous game to play. Not only does it cost the system billions, you run the risk of another provider taking action based on misinformation down the line — which may harm your patient.

Future Proof, MD is a resident physician and personal finance enthusiast who enjoys serving up digestible money tips with a focus on topics relevant to young medical professionals.