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Fraud and abuse present significant problems for the healthcare sector, leading to both financial losses and reduced quality of care. The outcomes of fraud and abuse are similar; but fraud and abuse are legally differentiated based on motive. According to Magellan Healthcare (2019), fraud is committed with clear intent, whereas abuse “involves actions that are inconsistent with sound fiscal, business or accepted behavioral healthcare practices,” (p. 1). Determining intent to differentiate between fraud and abuse can be challenging, which is why healthcare leaders need to treat all forms of waste and deception with equal severity.
Healthcare fraud is alarmingly common, with major cases resulting in FBI investigations. Just yesterday, ten retired NFL players have been charged in a case involving “alleged nationwide fraud” on a healthcare benefit program designed specifically for NFL players (FBI, 2019). Cases like these illustrate the high stakes involved in healthcare fraud, showing that the lure of financial gain leads multiple stakeholders to make poor ethical decisions.
Abuse cases are typically less cut and dry than fraud cases, but may result in similarly large financial losses. One frequently cited form of abuse involving Medicare is billing for services that have not been rendered. In many cases the healthcare institution or provider might even perform such services, but they are not medically necessary (“Fraud and Abuse: What is the Difference? 2007). Any perceived gains in committing abuse are usually outweighed by the subsequent losses when the abuse has been detected.
One of the keys to reducing unnecessary losses in the system due to fraud and abuse is prevention, and prevention starts with good leadership. Leaders set the tone for all ethical decisions made within an organization. While using fraud and abuse detection software and conducting regular third-party internal audits can help reduce instances, severity, and frequency of fraud and abuse, the ideal way of addressing the issue if by creating an ethical culture in the organization.
References
FBI (2019). Healthcare fraud news. Retrieved from https://www.fbi.gov/investigate/white-collar-crime/health-care-fraud/health-care-fraud-news
“Fraud and Abuse: What’s the Difference?” (2007). The Rheumatologist. 1 Nov, 2007. Retrieved from https://www.the-rheumatologist.org/article/fraud-and-abuse-whats-the-difference/
Magellan Healthcare (2019). Fraud, waste, and abuse. Retrieved from https://www.magellanprovider.com/education/fraud-waste-and-abuse/fraud-waste-abuse-faqs.aspx
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