Case Study Assignment: Fraud and Abuse

Because of the third party payments, Medicare and Medicaid and the magnitude of healthcare expenditures in the United States, fraud and abuse have always been major concerns of the federal government. 

Note: For this assignment, you will discuss the below case study. Please read Chapter 16 of your text before you begin this assignment

Fraud and Abuse-Help Me, the Feds Are Coming! Page 468

I'm in need of your help. I have been working for a healthcare organization for several years and have always enjoyed it, but I am concerned with the way they are doing business. I am a financial assistant in the hospital's billing department, where I specialize in Medicare and Medicaid billing. I do not have an academic background in finance, but I feel that has been taught to me during my current tenure. Nonetheless, I am concerned about some issues, and I'm hopeful that your expertise and background in healthcare management will provide me with the answers I seek.

There has been a lot of buzz taking place in my office lately about government inspections of our financial records as they pertain to Medicare and Medicaid, and I have even heard that fraud investigators are milling around. I have never seen so much concern as in the past weeks, and they have even started calling in employees one at a time. My boss told me that I should just tell them that I have no idea how the bills are being processed and that I merely ensure that addresses are correct. However, this is not the case at all. As a matter of fact, I have oftentimes approved billing statements for Medicare and Medicaid, and I also fill out cost reports that are filed with the federal government. I was never fully trained on how to do these things, and honestly, I have no idea what happens to them when they leave my office. However, I have heard many employees state that our books are never correct and our billing is not accurate. This certainly doesn't seem like a problem for me, as I'm just doing my job and collecting a paycheck.

I would like to add that I was recently speaking with an attorney friend of mine, and he said that I could potentially be liable for any fraudulent billing practices that have taken place, especially if I was the one that approved them. He seems to think I should speak with the government officials and inform them that I have knowledge of fraudulent billing and that I have signed numerous government forms. Mind you, I have no knowledge of the content of these forms. I just fill them out and send them along, so I have no idea how that could be fraudulent. I think it might be best to stay out of it and do what my manager told me to do. I really think attorneys take things too seriously. Maybe I need a new friend, as the old one is really scaring me.

I have also been told that I could not be held liable, since I work for a large hospital. I believe that as long as I am doing what I am told, I will be okay, and the executives are the ones who will get in trouble with the federal investigators. I think this is correct because I really don't know what I am doing. There are times I change a billing code so the organization gets more money, but I think everyone does that. It is a standard practice in the industry, so that isn't any reason to be concerned. Furthermore, my supervisor told me that, when I see certain code designations, I should automatically change them to another code because it is a mistake. I have a list of these particular changes I follow every day. It just makes good business sense. Also, I have submitted the same claim multiple times, but since I don't know if the previous ones were paid, it only makes sense to continue to do so. I was telling my spouse that oftentimes a procedure is not covered, so I will bill it to another code in order to get it paid. I'm doing this for the patient, as that way they won't receive a bill, since they have enough to deal with. In the end it all helps, as our hospital gets paid as well. I think I am a great employee, and I'm truly doing the best I can to ensure that patients and the organization are reimbursed. In some ways, I am a one-man health reformer.

I am scared a little, though, as I keep hearing about fraud and abuse. These terms don't make sense to me, but my aunt's friend, Rosy, said as long as I didn't know what I was doing, I will still be okay. Rosy used to work for a doctor, so I think she is really on top of the issues facing health care today. Just because I get a little extra money on my paycheck every time I change a code doesn't mean I did something wrong, does it? I mean, I wouldn't get extra pay unless I was helping the company, and in a tough economy, you want to make sure you are taking care of your employer so he or she takes care of you.

Anyway, you are now well aware of my situation, and I would appreciate any feedback/advice that you can provide me. I know I will be okay when they call my name in a few minutes, but I think I would rest easier if you gave me your opinion before I go in to the interview. I am going to list some questions if you don't mind discussing them and providing me with your thoughts. Hurry though, I hear footsteps coming down the hall....

Our finance friend needs our help, so let's see if we can answer a few questions for him. Before we begin, it is necessary to remember that fraud and abuse, or what has come to be known as the two-headed monster, are really two distinct violations that can be enforced. Fraud is an "intentional" act of deception, while abuse is improper behavior not consistent with standard practices. As to abuse, it does not matter if the act was unintentional, it will be punished the same way. With that in mind, let's see if you can answer the following key discussion questions and then provide a remedy for our finance friend.

Please consider the following questions:

• First, do you think that there are any indications that either fraud or abuse has occurred? If so, provide examples of each and discuss what makes them fraud and what makes them abuse.
• Do you think that our friend has anything to fear? Is he an innocent bystander who is truly unaware of his actions? Does it matter?
• What legal implication is his lawyer friend referring to when he tells him to come clean and explain what he has been involved with? What do you think about this approach, and do you think that he would be protected?
• Speak to the coding issues that were mentioned in the case. What implications are there for this type of behavior?
• What about Rosy's advice? Is it sound? Does it speak to the legality issues required to meet fraud and abuse charges?
• If you were in the position that our finance friend is in, what would you do? What is the best advice you can provide?
• Based on your knowledge of the topic and case reviews, what do you think the outcome of a case like this will be? If there are penalties, what will they be?
• Do you think our friend should be updating his resume and looking for a new job? Or should he be thinking about how he'll be making new friends in jail?
• Buchbinder, Sharon B., Nancy Shanks. Introduction to Health Care Management, 2nd Edition. Jones & Bartlett Learning, 07/2011. VitalBook file.