I was talking to another health care consultant about a physician’s group he’d done a review for. The physicians were really busy, but the group wasn’t making the kind of money it should have been making.

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What he discovered was one of the physician’s wasn’t showing any revenue for inpatient rounds, whereas the others had significant revenue. When he started asking questions, he learned this particular physician, for whatever reason, had stopped giving his activity slips to the office manager almost a year earlier, saying he was too busy to be bothered with it.

My colleague decided to have a conversation with this physician without the other physicians present. The physician reiterated that he was too busy to do the paperwork, but acknowledged that he knew he should be filling out the forms, and that the other doctors had said something to him about it.

The doctor was told that not only did he need to find a way to do these slips, but that it was imperative for him to do them for another reason. If the group was ever audited, and those activity slips couldn’t be produced, the physician could be accused of a form of fraud, that being accepting kickbacks from the hospital. The assumption would be that the physician was giving up money on one end, so he had to be accepting it from another end.

One of those odd things about health care is that it’s expected that a provider of services is going to charge for services provided. The physician thought this was odd, but understood what he was being told and said he’d have a talk with the office manager to figure out a way to make sure his slips got completed in a timely manner.

The topic of fraud is dicey in any types of business. When it comes to health care, most people think of fraud only as billing for services that weren’t actually provided. That’s considered the most serious example of fraud but it’s not the only type.

Kickbacks are definitely a type of health care fraud. I remember a news story some years ago about a New Jersey hospital that devised a system of paying cardiologists for referrals to its struggling cardiac surgery program. When it was discovered by an interim chief executive officer and others c-suite leaders, the hospital made a decision to try to cover it up rather than disclose it; that’s another violation of federal law. The fines were enormous, everyone lost their jobs, and I bet the interim leader had problems getting work again.

Back when I was a regional director of a physician billing company, I wondered why a physician under my watch had almost no Medicare revenue or cash coming in. When I talked to him, he said that whenever he saw Medicare patients he didn’t feel right billing them because he knew many Medicare patients didn’t have much money, so he just wrote off all charges for them unless he knew their secondary insurance would fully cover the claims.

I had to tell him that was against the law because he was giving a benefit to Medicare patients that he wasn’t giving to everyone, and that it could be considered fraudulent; Medicare rules are pretty strict. I also told him if he did it for everyone he’d lose a lot of money and so would the hospital. He didn’t fully agree, but said he would go along with the process that was taking place with all the other patients.

The examination of fraud by the government in America has become a business of its own, especially in health care. When the Office of Inspector General first took on fraud back in the late 90’s, it was with little expectations and not all that large a staff, considering what they were going after. By 2005, it had become such a big enterprise that recommendations were made for each state to establish its own OIG (Office of Inspector General) departments to do coordinated efforts with Medicare and Medicaid.

Although there were predictions that yearly fraud efforts could result in fines totaling in the trillions, that hasn’t quite come true, but what the government has recovered is staggering, as in The Office of Inspector General (OIG) recovering $5.9 billion from fraud investigations during fiscal year 2019.

It’s not always because someone intentionally tried to cheat. Unintentional fraud claims come up all the time, often without knowledge of the facility. Years ago, a Rochester NY hospital was fined $6 million because they had a lab that scanned for two law results when only one had been requested by the physician, and the hospital automatically charged for both. Even in cases like this, almost none are ever argued against or fought in court because of the treble damages rule concerning false claims from 1863; how many hospitals could actually afford treble damage judgments in today’s world?

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If you think I’m kidding, who remembers the Deficit Reduction Act of 2005? This was an act that was meant to reduce the federal deficit by something like $55 billion dollars over a five year period. It contained massive cuts in many federal programs, including Medicare and Medicaid. What it also called for was an increase of spending around $528 million dollars over five years and $1.2 billion over 10 years to promote Medicaid program integrity, which supposedly means verifying proper Medicaid payments. This was paid by fraud audits.

In simpler terms, the government isn’t playing around. Fraud is serious stuff, and they can come at you from any direction. All it takes is for one employee to be doing something wrong, or one physician to be doing something wrong, intentional or not, to bring attention to organizational policies and procedures. It could even involve following directions from someone in a higher position telling you to do something that you know is wrong, and you doing it; the laws are absolute.

I remember one consulting assignment where a senior vice president of finance told me he wanted to code a particular service with an invalid revenue code (departmental code to those not in health care), even though the hospital had a clinic for those particular types of service already, and this area wasn’t anywhere near that department. I asked him why, and he said because he knew he would get paid, and what he’d get paid, for the service if the hospital billed it out as a clinic.

I immediately said it wasn’t legal, was fraud, and if he wanted that I would bring him an official letter that he would have to sign, absolving me of all responsibility while noting that, after the first claims went out, I would be sending a letter to the OIG as an official whistleblower, because just being absolved and doing nothing doesn’t get you off the hook. I could have used the extra 33% from the fine that would have been imposed, but he backed down, and I lost my money, but made a very important impression; I hope. If nothing else, I kept my professional integrity intact.

You never know where it’s going to come from, or in what form. As health care managers, you don’t get to act as if you’re ignorant of such things. You’ll be fined and possibly go to jail even if your only crime was following directions or, believe it not, ignorance of something under your purview.

Think about the ethical considerations of intentionally committing fraud, or not checking your processes to see if fraud exists. It gives pause to just how close someone can be to going to jail just because they decided to turn their head the other way.

One of the things about being a leader is that you now have to be one, no matter the immediate consequences. Sometimes it’s hard, because no one wants to lose their job. I’ve never been, but I assume that jail is worse.

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