Hiding in Plain Sight

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GUEST BLOGGER

Diane Burley
Chief Content Strategist, MarkLogic

During International Fraud Awareness Week, I’m reminded that illusionists are masters at manipulating our attention – using slight-of-hand, they have us focus intently away from where the trick is being played out.  Skilled perpetrators of fraud do essentially the same thing. They know instinctively, if not cognitively, that the human brain is wired so that as it focuses on one set of information, it must shut out other information.

That’s why it was so easy for two business partners from Houston, with the aid of their wives, to steal more than $5 million in a health care fraud. The men founded a Houston-based home health care company and said they provided skilled nursing to Medicare beneficiaries, including home-bound patients. 

On the surface, it all looked legitimate. And, there are many legitimate operations just like these all over the country. But, in fact, the health care group’s patients were not homebound, nor did they need (or receive) skilled nursing services. Yet they billed Centers for Medicare and Medicaid Services (CMS) and received payment for those non-services.

Catching these kinds of frauds has been near impossible for forensic accountants and investigators, because their actions, albeit criminal, look so reasonable — which is how, according to the FBI, CMS alone is bilked of $80 billion each year. Forensic accountants are trained to look for anomalies: Is a bill excessively high? Is the same amount being processed over and over and over again? Is the number of patients for a single practitioner realistic?

Uncovering fraud requires a highly honed set of skills that combines both the art of knowing how to find patterns and using technology to do the heavy lifting. Highly trained individuals – even highly trained machines – can’t spot ersatz charges when transactions are perceived to be like all the other claims. And spotting the illusion — and stopping it — has been a big problem for CMS and virtually every organization in every industry. Until now.

We implemented an enterprise NoSQL database for CMS, and they were astounded at the ease with which each new external dataset could be added. By eliminating the need for modeling data, CMS was able to increase the odds in its favor to interrupt and catch this fraud earlier next time. Our technology allowed the focus and examination to be put on the right information – not the illusion the criminals had created.

During Fraud Week, it’s nice to share a success story that shows how new technology can be an effective weapon in the fight against fraud.

Health Care Fraud: An Unfortunate Certainty

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LETTER FROM THE PRESIDENT

James D. Ratley, CFE
ACFE President and CEO

Death and taxes. Add health care to that short list of certainties. And while you're at it, tack on the word fraud to health care.

In May 2012, U.S. authorities charged 107 people, including doctors, nurses and other licensed medical professionals, for allegedly trying to defraud Medicare of about $452 million — the largest Medicare fraud sweep to date. The sad thing is that chances are that we'll probably soon be reading about an even more serious case.

"Health care fraud shows no sign of abating," said Dr. Joseph T. Wells, CFE, CPA, founder and chairman of the ACFE, during his keynote message at the 23rd Annual ACFE Fraud Conference & Exhibition. "Don't expect a downturn anytime soon."

Because health care fraud affects everybody, and many ACFE members work in the industry, we've begun the new "Rx for Fraud" column and will occasionally include feature articles on the topic.

In Fraud Magazine's cover article, "10 popular health care provider fraud schemes," author Charles E. Piper, CFE, CRT, writes that the difference between the health care realm and many other industries is its huge, alluring, easy pile of cash. According to the Centers for Medicare & Medicaid Services (CMS), national health expenditures in the U.S. reached $2.6 trillion in 2010 — 17.9 percent of GDP. 

The CMS projects U.S. health spending to rise to 7.4 percent in 2014, as a result of the major coverage expansions from the U.S. Affordable Care Act (ACA) — an estimated additional 22 million people will be insured. Over the period of 2015–2021, health spending is projected to grow at an average rate of 6.2 percent annually. 

Piper's 10 schemes aren't exhaustive — providers have many more tricks up their lab-coat sleeves. But these are representative of classic crimes. Of course, most health providers, facilities and institutions are dedicated to giving, not taking. However, the small percentage who are fraudsters can steal large amounts because they're close to the money, and they enjoy the trust of institutions and patients.

To learn more about the subject, here are two great possibilities:  

Health care fraud — like death and taxes — isn't going anywhere. In fact, it will increase in the next decade. We're here to help deter and combat it.