As healthcare costs continue to rise, it isn’t surprising that criminals have found a way to commit fraud and steal money from private and public organizations. John LeBlanc of Manatt recently spoke about some new types of thieves preying upon our health system.
One topic LeBlanc discussed was medical identity theft.
“Medical identity theft is different from traditional forms of identity theft because it involves the use of an individual’s personally identifiable information (PII), such as their name and social security number, for financial gain,” LeBlanc says. “In these cases, criminals access a person’s PII and then create or obtain false identification cards, prescriptions or access to medical records in their name.”
LeBlanc continues that criminals can commit this type of crime because there are currently no federal laws that require data security standards for healthcare providers or health plans. Instead, these organizations may voluntarily decide what types of data security measures they want to implement.
“Currently, the only law requiring healthcare information privacy and security is the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which establishes national standards for medical record-keeping,” LeBlanc says. “However, HIPAA does not address the physical security of computers that contain electronic health records.”
In addition, LeBlanc talks about how these criminals are also stealing money by directing patients to specific hospitals, diagnostic facilities, and physicians.
“Another form of healthcare fraud that is on the rise is related to the choice of hospital, doctor, or another medical provider,” LeBlanc says. “These criminals are often referred to as ‘patient recruiters’ because they seek out people who are entitled to receive medical services at no cost, such as individuals eligible for Medicare and Medicaid. They recruit these people and arrange to have them obtain medical services at a specific facility or through a particular doctor in exchange for cash.”
“Instead of getting the free care they are entitled to, these patients unknowingly may be referred to facilities and physicians where criminals get a commission,” he adds.
Another form of healthcare fraud that LeBlanc is concerned with is “upcoding,” which occurs when a medical practice bills for a more serious level of care than is provided.
“For example, if a patient has surgery to repair a torn meniscus in their knee, these criminals might bill it as reconstructive knee surgery, which is considered a more serious procedure and thus increases the likelihood of being reimbursed by insurance companies,” LeBlanc says.
LeBlanc explains that upcoding occurs because it is not always easy to determine what type of procedure a doctor has performed during an office visit or hospitalization.
“In many cases, doctors and hospitals document the type of procedure they’ve performed simply by using the appropriate Current Procedural Terminology (CPT) code,” LeBlanc says. “This makes it difficult to determine if a medical practice is upcoding when billing for services. However, there are ways to determine if this is occurring.”
LeBlanc concluded by saying that the best way to avoid being a victim of healthcare fraud is by obtaining medical services from providers and facilities known for their integrity.
“While no one will ever be able to fully protect themselves against this type of crime, understanding what different types of fraud look like might help you determine if something isn’t right,” LeBlanc says.