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Fraud and abuse in the healthcare system have been one of the top enforcement priorities in the U.S. for the past few years. The Federal Department of Justice and U.S. attorneys are fighting Medicaid fraud and struggling to define abuse, fraud, and corresponding penalties. This research paper aims to identify what is fraud and abuse and their differences, categories, and disadvantages for them.
The Healthcare system recognizes fraud and abuse as different acts depending on the intentions factor. The definition of fraud given by Medicare is everything that knowingly falsified, solicited, or referred to prohibited or extra services (American Medical Association, 2021) in other words, intentionally taking advantage of the payer or the system is fraud. At the same time, abuse is defined by Medicare as practices that were unintentionally conducted and resulted in undesired costs for the program (American Medical Association, 2021).
For instance, submitting wrong billing information because of technical or other issues might be considered abuse, but charging the patients for unnecessary procedures is fraud. Understanding the difference between the two is critical since the penalties and punishment for either differ. Another factor that is unique to abuse and fraud is the investigation process. Mistakes found by Medicare workers in the submissions of healthcare facilities stay as abuse until a whistle-blower shares information about suspected fraud (American Medical Association, 2021). Therefore, investigating and identifying fraud might be longer than abuse. The differences between the two misbehaviors are intentions, consequences as penalties, and the process of determining the case.
The categories of fraud and abuse that are prohibited by the law are false claims, kickbacks, and self-referrals. The three types have their corresponding penalties and definitions according to the law. The government identifies the definitions and sentences with minor changes in every state, which gives Medicare an advantage since it is a governmental organization. The ethical side of the matter is questionable since the rules could be written by an independent organization that is not financially related to any part of the case. Nonetheless, some categories of fraud and abuse are defined by the federal civil False Claims Act and are regulated by it (Kalb, 1999).
The punishment depends on whether the false claim was delivered under negligence or reckless disregard. Some penalties might be from five to ten thousand dollars or up to three times the amount of the misleading. Kickback, bribe, or other inducement is willfully and knowingly paying or receiving remuneration, which is federally prohibited by the Anti-Kickback statute (Kalb, 1999). Self-referrals are also prohibited by fraud statutes, to be precise Stark Laws, since they give an entity to which the patient has referred an unfair advantage from being financially related to the referral (Kalb, 1999). All these categories are necessary to distinguish between types of misbehaviors and correctly penalize them.
To conclude, fraud and abuse in the healthcare system are different misleads that are necessary to understand for proper punishment. Fraud is knowingly and willingly submitting false claims, bribes, and other acts that financially benefit the entity. Abuse is an unintentional mistake that causes unnecessary costs for organizations regulating health insurance and care system. The difference between the two concepts lies in the actors intentions, the corresponding punishment level for misbehavior, and the process of identifying the crime. Three major categories that enable a claimant to differentiate between fraud and abuse are false claims, kickbacks, and self-referrals. They are regulated mainly by governmental entities, which might give Medicare privileges in the healthcare system. However, that is a different ethical issue to be discussed.
References
Kalb P. E. (1999). Health care fraud and abuse. JAMA, 282(12), 11631168. Web.
American Medical Association. (2021). Medicare Fraud & Abuse: Prevent, Detect, Report. Centers for Medicare & Medicaid Services.
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