The health care industry is a significant part of the overall economy and represents one of the largest expenditures of government funds. Federal and state taxpayer dollars supports medical research, the purchase of goods and services, and the funding of numerous government health care programs. These government programs spend hundreds of billions of dollars a year providing much needed health and medical insurance coverage. These programs are also rife with fraud. For example, the Government Accountability Office reported that in fiscal year 2016 alone, improper payments from Medicare and Medicaid totaled $95 billion.
Fraud in the health care industry can take several forms and can occur within multiple areas. Some of the most common types of health care frauds include:
Aides & Nurses – Failing to properly compensate or comply with the medical and education requirements for aides and nurses. These rules help ensure that aides and nurses are healthy and can adequately perform their jobs. Violating these rules enriches providers at the expense of taxpayers and the public health.
Pharmaceuticals – Manipulating the manufacturing, delivery and the payment process for drugs. This conduct results in drugs that are in limited supply, lack cheaper generic versions or are more expensive than they should be.
Kickbacks – Providing financial pressure or something of value in order to induce a doctor or provider to promote a certain drug or use a certain medical device. This financial conduct interferes with the judgment of the medical professional as to what kind of care a patient should get.
Off-Label & Misbranding – Promoting a drug for purposes not approved by the Food and Drug Administration (FDA). For example, in 2009 a drug manufacturer paid over $1 billion for promoting a drug for dementia, depression, sleep disorders (and others) when the FDA had only approved it for treating psychotic disorders, bipolar disorder, and schizophrenia. This conduct can lead to fraudulent payments and grave public health risks.
Upcoding – Manipulating the Current Procedural Terminology (CPT) code for medical procedures in order to charge more money. For example, instead of billing for one type of service that costs a fixed amount (e.g., a checkup CPT code for $50), a provider will submit a bill for a different type of service associated with a higher reimbursement amount (e.g., an extended checkup CPT code for $75). This is fraud and cheats taxpayers.
These and other health care frauds cost the government billions of dollars and violate federal and state qui tam statutes.