Free «Dealing with Fraud» Essay Sample


The Federal Civil False Claims Act under the qui tam provisions allows private citizens to file suits to recover the amount paid by the government for false statements and claims (Hammaker & Tomlison, 2010). Whistleblowers receive monetary awards ranged from 15% to 25% depending on the value of evidence they provide as well as on efforts and risks they undertake (Safian, 2009; Hammaker & Tomlison, 2010). Since American healthcare costs reached 17,6% of its GDP and fraud comprises as much as 10% of these costs, many healthcare organizations look forward for sufficient ways to fight claims and violations, which cause them (Safian, 2009; Cadwell, 2005). The following methodology was designed to perform a research: a) evaluation, which helped to identify the effects of qui tam actions on healthcare organizations. It also helped to suggest the recommended corporate integrity plan, which would correspond to the quality standard of reproduction and birth issues. The next component was b) survey, which helped to describe examples of qui tam cases that existed in hospitals; c) analysis, which helped to elaborate the precise admission procedure in obstetric healthcare centers and its compliance to all necessary laws; d) synthesis, which helped to identify the best technological practices to protect patients' information.



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Therefore, this research paper discusses appropriate measures to be taken for the purposes of mitigation the qui tam actions. These measures are addressed with respect to Anti-Kickback Statute, Physicians Self-Referral Law (Stark Law) and Criminal Health Care Fraud Statute (Brown, 2000). Specifications of admission procedure, compliance of the corporate integrity plan to abovementioned prescriptions, and ethical issues of patients’ data storage and recycling are set forth in accordance with quality and policy requirements (Green & Rowell, 2011; Keagy & Thomas, 2012; Dunham-Taylor & Pinczuk, 2006).

Effects of Healthcare Qui Tam Actions on Health Organizations

Plaintiffs, who initiate cases under the FCA, are called qui tam. They are advantageous to the justice department, which suffers triple damages because most healthcare activities occur within legitimate business contacts (Halbert & Ingulli, 2011; Hammaker & Tomlison, 2010). Every healthcare organization must comply with the False Claim Act, Anti-Kickback Statute, Self-Referral Law (Stark Law), Social Security Code and US Criminal Code , which are used to address fraud and abuse (Cadwell, 2005). A relator fills the compliant, whose allegations are investigated by the government. The first cannot conduct an action unless the latter declines its intervention (Cadwell, 2005).

The government exerts its control over a qui tam case in several ways. First, it can amend the compliant if it does not pursue relator’s personal interests or if it pursues defendants interests for the fraudulent behavior alleged in the initial compliant (Cadwell, 2005). Moreover, relator’s lack of standing cannot bring back abovementioned amendments and government’s adding certain common law claims, such as “common law frauds breach of contract and injust enrichment” (Cadwell, 2005, p. 370). Although defendant stays unaware of the compliant, relator’s involvement in the case is restricted by limiting the number of witnesses and the length of their testimony performed under the cross-examination of these participants (Cadwell, 2005). If the qui tam compliant is not dismissed, the following sanctions can be imposed for the breach of abovementioned laws: a) civil monetary penalties, which range from $ 2000 to $ 10000 per claim; b) treble damages and costs; c) criminal liability, which can entail imprisonment from 5 to 20 years; d) three to five-year exclusion from federal health programs, such as Medicare or Medicaid; e) corporate assets freezing; f) adoption of government-supervised compliance programs (Hammaker & Tomlison, 2010; Halbert & Ingulli, 2011).

However, these strict measures sometimes exceed civil and criminal liabilities for the inconsistent practice claim.

Examples of Qui Tam Cases that Exist in the Health Organizations

 The Department of Health and Human Services jointly with the Department of Justice issued Program Annual Report of the Health Care Fraud and Abuse Control, where the following qui tam cases were described:

1) St.Barneba Corporation, the largest health care provider in New Jersey, agreed to pay the Federal Government $ 265 million to settle two Medicaid fraud lawsuits brought by the whistleblower under the FCA (Safian, 2009). Moreover, the healthcare provider agreed to settle other charges brought by the Federal Government (US Department of Health and Human Services, 2011).

2) Lawrenceville, Georgia based skilled nursing facility, along with its owner Gwinnett Medical Investors Limited Partnership, Developers Investment Company, Inc., agreed to pay $ 2,5 million to resolve five whistleblowers’ allegations of systematic failure to provide appropriate nursing care to its residents (US Department of Health and Human Services, 2011). Such alleged failure resulted in premature death of several residents and was caused by inadequate staff training, high staff turnover, inexperienced medical director, poor nursing documentation, and insufficient budgetary allowances (Safian, 2009).

3) Beth Israel Medical Center in New York City allegedly misrepresented information related to operating costs of its Kings Highway Division in Brooklyn and improperly submitted certain non-reimbursable cost reports from 1992 to 2001 (US Department of Health and Human Services, 2011). These costs included costs of private offices for faculty physicians, funds-raising marketing costs, and maintenance of methadone treatment program. They resulted in $ 73 million sanction settlement in part of Berth Israel and in part from qui tam suit filed by a relator (Safian, 2009).

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4) University Hospitals Health System (UH) in Ohio allegedly violated the FCA and paid the United States $ 13,8 million to resolve a qui tam suit brought by the physician formerly affiliated with this health organization (US Department of Health and Human Services, 2011). According to former physician’s allegations, UH entered into illegal financial arrangements with physicians in order to induce referrals to this health organization for services reimbursable by Medicare (Safian, 2009).

Failure statements brought in the second case should be guided by health organizations while composing corporate integrity program. Allegations discussed in the fourth case should be addressed by the healthcare facility when performing admission procedure.

Appropriate Admission Procedure to the Obstetric Healthcare Center

Admission procedure should uphold the law about required number of Medicare or Medicaid referrals. Stages of this procedure should not decrease the actual inpatient length of stay. It should not also impose pre-operative and post-operative phases of diagnostic testing, which can be used to gain another inpatient day (Dunham-Taylor & Pinczuk, 2006). Admission phases should not violate Stark Law, which prohibits physicians to make referrals for certain designated health services (DHSs) paid for by Medicaid or Medicare if physicians have a financial relationship with these entities (Keagy & Thomas, 2012). However, the Stark Law has some exceptions: a) certain space and equipment rentals; b) personal service contracts; c) physicians' initiatives in management care settings; d) unrelated provision of designated health services with the demanded remuneration; e) physicians pay to laboratories or other auxiliary services; f) specifications of contract’s requirements between physician and hospital; g) compensation agreements on fair market value and certain indirect compensations (Keagy & Thomas, 2012). Moreover, admission procedures should respect privacy of patients’ information provided for sufficient patient classification system, which helps to design appropriate measures of actual costs of the provided care (Dunham-Taylor & Pinczuk, 2006).

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Therefore, essential admission procedures to obstetric healthcare organizations should include the following phases: a) reservations and scheduling, which can be performed online according to data security specifications; b) inpatient registration, which includes obtaining medical history and classification under health conditions and care requirements of pregnant women; c) billing and insurance verification, which provide requirements of obstetric hospital policy; d) admission testing, which includes developing differential diagnosis, problem list, and treatment characteristics; e) room/bed/ medical assignment, which can be imposed based on critical identifiers of care (Dunham-Taylor & Pinczuk, 2006).

However, intrapartum patient admission procedure to the labor and delivery room includes additional phases: a) labor flow sheet, obtained from medical history should be changed every hour to note patient’s response, pain assessment, medications, and high-risk factors, which were not identified; b) recording all anesthesia and medication administration used; c) description of all decelerations noted and interventions applied; c) all records should be communicated and consulted with physician or CNM (Rostant & Caddy, 2001). 

Therefore, it is important to take into account the responsibility and duty range of the involved staff to design corporate integrity plan in accordance with relevant laws. This will mitigate incidents of fraud as well as its recommendations will positively impact reproduction and birth issues.

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Impact of the Recommended Corporate Integrity Program on Issues of Reproduction and Birth

Applicable laws compliance, ethical issues, and requirements of service quality determine adequate corporate integrity program. Its main objectives are mitigation of the incidents of fraud and positive impact on issues of reproduction and birth (Brown, 2000). Comprehensive compliance program designates the following individuals responsible for the operation and functioning of the program: chief medical officer, administrators, compliance director, and compliance officers (Green & Rowell, 2011; Brown, 2000). Corporate Integrity Program helps to achieve the following goals: a) fulfill fundamental care when providing quality assistance to patients; b) identify weaknesses in internal system and management; c) create centralized distribution of healthcare regulations and programs directives related to fraud and abuse; d) allow prompt investigation of alleged misconduct with precise reporting methodology; e) initiate immediate and accurate corrective actions, designated to minimize financial loss for the organization, government, and taxpayers (Green & Rowell, 2011; Brown, 2000).

Under prescriptions of code of conduct procedures based on abovementioned goals include corrective actions, education, monitoring, and auditing (Merson, Black & Mills, 2012). Taking into account previous failures of healthcare organizations, which had qui tam actions, the following measures should be taken in order to implement the program effectively:

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1) Patient record documentation should be reviewed accurately with coding diagnoses and procedures administration (Merson et al, 2012). This coding allows medical practice to communicate all necessary data to patient’s insurance plan and improve patient's care delivery on the basis of facilitated analysis (Merson et al, 2012);

2) Informing about all changes in fraud and abuse laws, coding changes, and documentation guidelines (Merson et al, 2012);

3) Maintenance of an internal audit to ensure that required pretreatment authorization have been entered into billing and treatment records (Merson et al, 2012);

4) Insurance benefits, policy requirements, and filling rules should be explained to patients with the promise to maintain confidentiality of their information (Merson et al, 2012).

Therefore, important indicators of quality treatment include adequately trained personnel, good management, sufficient equipment and bed facility, and appropriate diagnoses by health care professionals (Merson et al, 2012). Corporate Integrity Program aims to improve the following areas of birth issues: a) lack of recognition of danger signs in pregnancy; b) poor accessibility and low utilization of skilled attendance during pregnancy; c) limited access to essential and emergency obstetric care; d) limited health provider competencies and inadequate staffing (Green & Rowell, 2011). The following aims related to reproduction issues are emphasized by the program as well:

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a) to reduce negative consequences of the scientific misunderstanding of human reproduction using attendant technologies;

b) to create  a system of national and international institutionalized checks;

c) to ensure stability of the public policy and accommodate additional knowledge and continuing close scrutiny;

d) to control unethical complications by general guidelines, expressed by the highest ethical standards (Pollard, 2002).

Monitoring system must be established to guide abovementioned areas of process and outcomes indicators, such as waiting time and case fatalities, with the result being used in a continuous process of review and upgrading the healthcare system.

Technologies, which are Used to Protect Information of Patients

Health Insurance Portability and Acceptability Act issued by federal regulation states that covered entities must maintain and transmit electronically stored protected health information. They are required by the Security Rule to: a) ensure confidentiality, integrity, and availability of all received, maintained or transmitted electronically protected healthcare information; b) protect against any reasonable anticipated threats or hazards to security or integrity of such information; c) protect against usage and disclosure of such information, when it is permitted or required (Brown & Brown, 2011). Advanced technologies are used to meet HIPAA requirements in archiving and recovering automated processes of secure back up and recovery of electronic data (Brown & Brown, 2011). Intronics Cloud Back-Up and Recovery Program is used for prevention of unauthorized access and corruption of health information (Brown & Brown, 2011).

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Therefore, the plan to protect patient information can be devised in the following manner: a) security manager signs Employee Confidentiality Agreement and becomes in charge of security management and processing of health information; b) security manager creates encrypted keys for the following electronic data when they are being backed up: patient billing and information gathered from or displayed on a website or portal; lab and other clinical data sent to or received from outside labs; patient reports transferred electronically and e-mail between physicians and patients; c) security manager holds encryption key that was converted and stored only in the user’s system; d) encrypted files are transmitted via the Internet using secure socket layer to meet the security rules of transmission; e) security manager holds the password to restore any encrypted file; f) disaster recovery plan is used in the event of complete system failure and requires only reinstallation of the software with the same user name and password on any Windows based computer (Brown & Brown, 2011).

Moreover, additional electronic data is encrypted to prevent unauthorized access and mitigate incidence of fraud: a) administration information exchanged with payers and health plans; b) utilization and case management data, including authorizations and referrals that are exchanged with payers and hospitals; c) e-mails of attending and referring physicians in their offices (Brown & Brown, 2011).

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Qui tam actions can be brought by former employees to recover damages under FCA on the basis that the work had not been done in accordance with contract’s specifications. Violation of laws used to address fraud and abuse may result in nonpayment of claims, exclusion from Medicare programs, civil and criminal liabilities, and civil monetary penalties. Qui tam allegation cases describe weaknesses of health organization management, which resulted in imposing the sanctions. Designed methodology helped to determine steps of the obstetric healthcare center to achieve the sufficient care quality and delivery. The structure and sequence of essential and emergency admission procedure designated in accordance with the law required a number of Medicare and Medicaid referrals to help to identify basic phases of the corporate integrity program, which requires education, monitoring, and auditing internal healthcare system. The program is designated to eliminate weaknesses of obstetric healthcare system and effectively impact issues of reproduction and birth. Federal regulation and code of conduct determine the procedures based on the corporate program integrity goals. Intronics Cloud Back-Up and Recovery Program meets HIPAA requirements and helps to prevent unauthorized access to health information by encrypting data files and their transmitting and receipt via secure socket layer upon responsibility of the security manager. Disaster recovery plan is initiated in the event of complete system failure and requires only the login and password of the user to process full data recovery. 


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