Healthcare fraud poses a significant threat to healthcare systems, escalating costs for all stakeholders. Recognizing signs of potential fraud not only helps to protect the organization’s bottom line, but it also reduces the risk of allegations of failing to comply with applicable regulations — allegations that can result in criminal charges against healthcare organization leaders and potential imprisonment.
Taking the time to become familiar with common signs of healthcare fraud can help to better ensure that organizational leaders become aware of any potential issues within their organizations before the issue escalates into a violation of federal regulations. Although auditors will look for many issues during an investigation, five of the more common examples to watch out for include the following.
1. Billing anomalies
Leaders should be alert to any inconsistencies in billing processes. These may include charges for unrendered services or multiple billings for the same procedure. Such discrepancies might indicate either deliberate fraud or systemic errors that require immediate attention.
2. Overutilization of services
Be cautious of providers who frequently recommend unnecessary tests or procedures. Look out for:
- Services that do not align with the patient’s current health condition.
- High frequency of specific procedures beyond standard practice.
This could be an attempt to inflate bills and may suggest fraudulent intent to manipulate service volumes.
3. Overuse of waiver of copays and deductibles
While occasionally waiving fees can be part of charitable care, routine waivers without clear justification may be problematic. This practice can sometimes be used to obscure the true cost of services and mislead patients and insurers, potentially leading to fraudulent claims.
4. Failure to follow medical standards
It is essential that all healthcare services adhere to established medical protocols and guidelines. Any deviation, such as prescribing unsuitable medications or inconsistent treatments, should trigger a compliance review to prevent potential fraud.
5. Lack of transparency
A hallmark of reputable healthcare practice is transparency. Encourage a culture where staff feel comfortable sharing information and seeking second opinions. If a provider seems unusually secretive or discourages transparency, it might indicate underlying issues.
Recognizing these red flags enables you to act decisively to investigate and address issues before they escalate into a fraudulent situation. By fostering a transparent, compliant organizational culture, healthcare leaders can significantly reduce the risk of fraud within their organizations.
Attorney John Rivas is responsible for this communication.