Healthcare Fraud Investigation Guidebook PDF

Preface

Doctors actually made house calls when I was growing up in the late 1950s and early 1960s on the South Side of Chicago. When I was sick (or faking it to get out of going to school), my mom would call the doctor’s office from our rotary telephone in the kitchen while I would lay on the front room couch in my pajamas watching our black-and-white television. Soon the doctor arrived with his black leather satchel bag in hand. That’s when I started getting scared. After my mom provided the doctor with a verbal description of my symptoms, he removed a stethoscope from his bag, pushed the cold end onto my chest, and told me to breathe in and out while he listened carefully through the stethoscope’s earpieces. Then he’d stick a wooden stick down my throat and make me say, “Ahhhhhhh,” until I gagged. Next came the long look inside my ears where the doctor searched for something that he never did seem to find.

It seemed like our doctor’s cure was always the same—a big needle and a long injection of penicillin. Maybe that was supposed to serve as a deterrent so I wouldn’t fake being sick to get out of school. If so, it didn’t work very well. Although I didn’t like being around doctors as a kid, I still knew them to be trustworthy, honest, and caring professionals—just like the Chicago cops that patrolled our streets. Except the cops didn’t take crap from anyone.

Little did I know then that house calls would soon be a thing of the past and a few decades later I’d be serving as a federal special agent conducting criminal and civil investigations of healthcare providers from coast to coast for committing millions of dollars in fraud.

Although most individuals that serve in the healthcare industry are dedicated, caring, and honest, it’s also known that some unscrupulous “professional” providers scam the system, which often results in huge dollar losses to insurance companies, government programs, and taxpayers.

There are others who also rip off the healthcare industry, including the following:

• Patients and insurance beneficiaries

• Employers

• Insurance company employees and government insurance program employees

• Third-party administrators and fiscal intermediaries

• Fake business entities

• Organized crime groups (including street gangs)

• Hackers

Just in case you haven’t been reading the newspapers, hackers are not just grown-ups that keep coughing up phlegm because they smoke too much. Hackers are those who wrongly, electronically penetrate and exploit the weaknesses in computer systems and networks. Medical ID fraud is causing all kinds of problems for patients, healthcare providers, and insurance companies.

Some have estimated that healthcare fraud in the United States results in losses of approximately $80 billion a year. It has been said that 80 billion one-dollar bills laid end-to-end would extend around the earth almost 320 times! Now that’s a lot of loot!

There are additional indirect costs associated with healthcare fraud, including, but not limited to, the costs incurred to prevent and detect potential fraud, the costs to conduct investigations, and the costs for prosecutions and other remediation.

Sometimes, greed in the healthcare profession also results in quality of care issues. In other words, patients are sometimes neglected, hurt, or become worse because they are not receiving the quality of care they should. Patients sometimes endure care, treatments, and examinations that are not necessary. Some providers are being paid based on the quality and/or value of the care they provide rather than fees for services. Some of them just scam the system by doing less for the patients and are still getting paid.

During the 20 years I served as a federal agent and now as a private investigator and consultant, I have found that investigating healthcare fraud can be mentally and physically challenging. But I have also found it to be very rewarding.

I don’t mean rewarding like you will make a lot of money (although fraud fighters are often well paid). I mean rewarding because it is fun taking down bad guys—especially when they are supposed to be good guys. When I say “guys,” that also means gals because some of them commit fraud too.

Those who are new to investigating healthcare fraud are often seen at their desks scratching their heads in confusion or frustration while trying to learn or remember all of the fraud schemes, terms, and positions of professionals involved in healthcare and the healthcare insurance process. Some of the schemes have funny names like: “unbundling,” “upcoding,” “overutilization,” and even “doctor shopping.” But healthcare fraud investigators sometimes also get to work cases involving good ole’ fashioned kickbacks and bribes.

Factually, investigating high-dollar healthcare fraud can sometimes be a bit confusing. Perhaps that’s why my personal favorite scheme to investigate is the easy to prove “billing for services not rendered.” Even a half-asleep jury can understand those types of false claims.

There are several useful books available on analytics, data mining, and detecting healthcare fraud. In fact, if you are a healthcare fraud investigator or examiner, I highly recommend that you read some of them. However, this book takes you to the next level. It not only assists in identifying healthcare fraud schemes, but it also provides helpful instructional guidance on how to investigate those fraudsters so that their wrongdoings can more likely be proven beyond a reasonable doubt and/or by the preponderance of evidence. This causes wrongdoers to be held accountable and wrongly obtained funds to be recouped through fines and judgments.

This book also emphasizes the importance of simultaneously searching for waste and abuse as well as systemic weaknesses and deficiencies that caused or contributed to the problem or wrongdoing under investigation and to then make recommendations for improvement.

The objective of this book is not to just put a Band-Aid on the problem of healthcare fraud but to actually try and cure it! Those tasked with the responsibility of investigating healthcare fraud should also be striving to improve the healthcare and payment systems not only by investigating fraudulent activity but by also striving to detect and deter other future instances of fraud, waste, and abuse.

During my career, I have investigated many different types of complex white collar crimes. But the majority of the healthcare fraud investigations I have conducted involved healthcare providers or their employers and organizations. Although organized crime is responsible for many high-dollar losses in healthcare fraud, it has been my experience that in total, healthcare providers are responsible for most or at least a large portion of the dollars lost due to fraud.

From an investigative standpoint, there are many things to consider when investigating healthcare providers as compared to investigating nonproviders. This book gives particular attention to the investigation of healthcare providers. It is my belief that once you learn how to successfully  investigate healthcare provider fraud, investigating nonproviders (usually for lower-dollar amounts) is much easier. Plus, all or most of the same types of planning skills, tools, sources, resources, and techniques used when investigating providers can also be utilized and/or considered when investigating others. However, it is worth noting that investigating organized crime and hackers will require additional assistance from those who are specially trained to investigate these areas of crime, preferably law enforcement.

You may have read another crime-fighting book I wrote entitled Investigator and Fraud Fighter Guidebook: Operation War Stories.* If not, I highly recommend that you consider reading it because the pages detail how to conduct thorough and complete investigations and actually solve more cases—with even fewer resources. The book includes many of my own personal War Stories and firsthand relevant experiences. It also details my own unique method of conducting investigations, which is called “The Piper Method of Conducting Thorough and Complete Investigations”* and includes a one-page diagram that outlines the method.

That same diagram of “The Piper Method”* follows. My unique method of conducting thorough and complete investigations is also detailed in this healthcare fraud investigation guidebook and recommended for use or consideration when conducting such investigations. I hope you will consider using this methodology (or at least elements of it) in your future investigations so that you might enjoy the same investigative success that I have, or even better results.