Phantom Billing, Fake Prescriptions, and the High Cost of Medicine

Phantom Billing, Fake Prescriptions, and the High Cost of Medicine: Health Care Fraud and What to Do about It

Terry L. Leap
Copyright Date: 2011
Edition: 1
Published by: Cornell University Press
Pages: 256
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  • Book Info
    Phantom Billing, Fake Prescriptions, and the High Cost of Medicine
    Book Description:

    U.S. health care is a $2.5 trillion system that accounts for more than 17 percent of the nation's GDP. It is also highly susceptible to fraud. Estimates vary, but some observers believe that as much as 10 percent of all medical billing involves some type of fraud. In 2009, New York's Medicaid fraud office recovered $283 million and obtained 148 criminal convictions. In July 2010, the U.S. Justice Department charged nearly 100 patients, doctors, and health care executives in five states of bilking the Medicare system out of more than $251 million through false claims for services that were medically unnecessary or never provided. These cases only hint at the scope of the problem.

    In Phantom Billing, Fake Prescriptions, and the High Cost of Medicine, Terry L. Leap takes on medical fraud and its economic, psychological, and social costs. Illustrated throughout with dozens of specific and often fascinating cases, this book covers a wide variety of crimes: kickbacks, illicit referrals, overcharging and double billing, upcoding, unbundling, rent-a-patient and pill-mill schemes, insurance scams, short-pilling, off-label marketing of pharmaceuticals, and rebate fraud, as well as criminal acts that enable this fraud (mail and wire fraud, conspiracy, and money laundering).

    After assessing the effectiveness of the federal laws designed to fight health care fraud and abuse-the antikickback statute, the Stark Law, the False Claims Act, HIPAA, and the food and drug laws-Leap suggests a number of ways that health care providers, consumers, insurers, and federal and state officials can bring health care fraud and abuse under control, thereby reducing the overall cost of medical care in America.

    eISBN: 978-0-8014-6080-7
    Subjects: Health Sciences

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. Introduction: THE BIG PICTURE
    (pp. 1-20)

    After spending two weeks recovering from heart and lung problems, a Florida man in his early nineties was released from an Orlando-area hospital. His condition was too unstable for him to return home, so his doctor arranged for a short stay at a nursing facility. On his discharge from the hospital, the patient told staff members that someone was available to drive him to his new quarters. But the hospital staff insisted he make the short trip by ambulance, assuring him that “Medicare will pay for it.”

    The ambulance ride went smoothly, and the patient, fully conscious and aware of...

    (pp. 21-40)

    Two business partners, one living in Texas and the other in Tennessee, had a good thing going. Despite being separated by hundreds of miles, these middle-aged women worked together, making money hand over fist through a simple invoicing scheme that lined their pockets with hundreds of thousands of dollars.

    The woman in Texas was employed by a medical center as the director of physician recruiting. The woman in Tennessee ran her own physician-recruiting service. After meeting online in 2002, the pair agreed to a physician-recruitment scam. The Texas partner told her Tennessee counterpart what items to bill the medical center...

    (pp. 41-59)

    The current and former owners of a Miami hospital agreed to pay $15.4 million to settle federal and state civil suits over kickbacks paid to physicians for patient admissions. Other patients—some of whom were from assisted-living facilities owned by the perpetrators—were admitted to the hospital for unnecessary treatments.¹

    An Atlanta hospital and two physician-owned businesses agreed to pay $6.37 million after being accused of violating the physician self-referral statute as a way of increasing their Medicare reimbursements. The government claimed that the hospital had purchased platelet products from one of the businesses at an inflated price and had...

  8. 3 FRAUD IN FEE-FOR-SERVICE AND MANAGED CARE: Different Sides of the Same Coin
    (pp. 60-96)

    After a four-week trial, a former Florida dermatologist was sentenced to twenty-two years in prison, ordered to pay $3.7 million and to forfeit an additional $3.7 million, and slapped with a $25,000 fine for performing 3,086 unnecessary invasive surgeries on 865 Medicare beneficiaries. Between 1998 and 2004, the doctor used faked biopsy results to generate diagnoses of skin cancer. Some of the specimens were actually slides containing chewing gum, Styrofoam, or skin tissue from the dermatologist’s employees. By performing five surgeries a day and billing Medicare between $1,500 and $2,000 per procedure, the doctor’s crooked business resembled a gigantic ATM...

  9. 4 FRAUD AT MAJOR HOSPITALS: Profits at Any Cost, Part One
    (pp. 97-115)

    During a conversation about health care fraud and abuse, a physician that I have known casually for several years related an incredible story. Now in the twilight of his medical career, he reflected back—telling me that he had always tried to run an honest practice and that he had always tried to do the right thing by his patients. But he still seemed miffed—even several years later—about a minor surgical procedure he had performed at a local hospital. This doctor charged his patient $300 for his services. Shortly after the surgery, his patient called him, puzzled about...

    (pp. 116-143)

    The Reagan administration’s “war on drugs” was directed at halting the trafficking of illegal narcotics. During the Obama administration we have a drug problem of a different sort. Americans turn to prescription drugs as a way of medicating the effects of their unhealthy lifestyles. Poor nutrition habits, stress caused by work-family imbalances and personal financial problems, and a lack of physical activity have resulted in an epidemic of obesity, heart disease, diabetes, hypertension, and poor mental health. Rather than eating right, exercising daily, and turning to psychotherapy when necessary, many Americans prefer to medicate and mask their health problems through...

    (pp. 144-176)

    During FY 2009, the federal government reported that it paid more than $47 billion in questionable—and possibly fraudulent—Medicare claims and another $18.1 billion in questionable Medicaid claims. Although this report sounds like a new verse to a song that government auditors have been singing for the past twenty years or so, the over $65 billion in loss estimates far outstrip those of previous years. The Medicare program, for example, estimated “just” $17 billion in losses in FY 2008. So, why the big jump? Is Medicare and Medicaid fraud escalating at a seemingly exponential rate?

    The answer is “probably...

    (pp. 177-182)

    My father’s ambulance ride and the fraudulent charges billed for that ride marked the beginning of an ordeal for my family. He spent the last weeks of his life in and out of hospitals and finally in a nursing home. But at ninety-two his deteriorating health had finally caught up with him, and he passed away quietly one early Sunday morning. Losing an elderly parent is traumatic not only because of the personal grief but because of the complications that follow. My father understood the importance of having good insurance coverage. He also kept detailed records, making sure his affairs...

    (pp. 183-188)
  14. Notes
    (pp. 189-206)
  15. References
    (pp. 207-230)
  16. Index
    (pp. 231-238)