Custom «Kickbacks, Side-Dealing and Side Payments» Essay Paper

Introduction

The health system has been for long been one of the most trusted social institutions. This profession has historically recognized that public trust as one of the greatest assets, a resource that has allowed it to define the scope of the medical work and increase the political and clinical autonomy of its practitioners (Fordney, 1999). This has been achieved by setting and enforcing high standards of medical and professional integrity and ethical standards that protect the interest of the patients.

However, in the recent years, all social institution including the health and insurance sector has fallen from the public trust. Even though confidence in medicine still rank higher than in other sectors such as education, the confidence in the medicine leaders has fallen from 73 percent in 1970s to 58 percent in 1990s. This is in comparison to the degree of trust felt on other social institutions (Fordney, 1999). This has been as a result of professional malpractices that have evaded the sector. These misconducts range from kickbacks to side payments.

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This issue of kickbacks and other misconduct in the health and insurance sector is worth exploring because of the increased public outcry. The hospital position with the public has recently weakened. Surveys in America indicate that the public is becoming unhappy, uneasy and afraid of rising misconduct that is becoming evident in the hospitals. It is also evident that future vigor of health care system and insurance depends on the public trust (Fordney, 1999). The public attitude and opinion, which is largely and persistently shaped by the negative media commentary shows that the majority of the Americans, are questioning the ability of the hospitals and physician to make the right decision regarding their health care. Most fears that unnecessary medical testing and devices may be rendered due to increased concerns over the kickback misconduct.

Kickbacks, side-dealing and side payment have been a common fraud in the health and insurance sector. This type of fraud and abuse is becoming widespread and costly to the healthcare system. It involves deliberate deception or misrepresentation primarily intended to result to unauthorized benefits (Baumann, 2002). This fraud often involves billing for un-offered services, charging for the services that are medically unnecessary, and services that do not follow professional sets standards. For instance, performing a laboratory test on a large number of patients when only few should have it is professionally a fraud (Baumann, 2002).

Kickbacks are the offering or payments of services that is normally done with an intention to influence and to gain favor from a company of a person. They are often associated with white –collar crimes and can occur in the health and insurance sector. In the medical system, kickbacks are usually used to give the doctors a free access to medicine samples. In exchange, the doctors prescribe specific medications to the patient. These kinds of kickbacks are the most obvious (Baumann, 2002). For instance, it is not possible to fail to note increased marketing of a certain pharmaceutical product from doctor’s offices. This normally involves the use of clipboard with a pharmaceutical advertisement on it, a box of tissue with another advertisement or even a pen bearing the same advert.

It important to realize that there are no legal consequences for the doctors or health professional’s accepting free drug samples or any other office supplies. In most cases, the medical professionals use these samples to cut down the fees and to provide medical services to the people who are economically disadvantaged (Sparrow, 2000). However, majority of medical professionals have readily agreed to prescribe specific medications in exchange of free samples and other accrued benefits such as side payment.

Inappropriate testing has been another issue of concern in the health care setting. Most standard tests are usually in some circumstances essential, but the judgment on whether a diagnostic test is essential normally influences the management of the patient. Billing for inappropriate test appears to be more common in the medical practices. Most insurance administrators are becoming concerned about the maintenance care claims from the chiropractic (Sparrow, 2000). This maintenance involves periodic examination services that are often uncovered by the insurance policy. In order to avoid being discovered, most chiropractors issue a new diagnosis after the 12 visit. This is because most companies review the claims for more than 12 visits to the company.

Since most insurance policies cover a certain percentage of the physicians’ normal fees. Some physicians have been found to charge the covered patient more than uninsured patient. Some physicians have also been found to routinely excuse patients from deductibles and copayments. In legal term, it normally allowed waiving the fee for those people who are genuinely disadvantaged economically, but it is illegal to provide a free or discounted service to patients to only collect fees from insured patients.

There have been many instances in where health care providers and corrupt attorneys team up to extract fund from the insurance companies through presentation on non-existent injuries. The health care provider normally fabricates diagnosis using a fake auto accident victim’s trough provision of expensive and unnecessary services. The legal counsel then negotiates on the compensation settlement based on the fraudulent and exaggerated medical claims (Sparrow, 2000).

Kickbacks, side-dealing and side payments can be considered a form of healthcare fraud. Although the health care industry is the most highly regulated industry with anti-kickbacks regulations, the magnitude of prosecution on side-dealing, kickbacks and side payments are increasing at an alarming rate. It is evident that kickbacks in hospitals have considerably undermined the delivery of health care in many hospitals. It is a problem affecting choices made by patients in the health sector (Sparrow, 2000). At the level of household and individuals, there is an increasing evidence of the negative outcomes of kickbacks, side-dealing and side payments on the wellbeing and the health of the affected patients. Of the 5.6 billion dollars recovered as fraud in the United States of America, 2.9 billion dollars had been attributed to corruptions dealings in the health care. Kickbacks, side dealing and side payments can have serious repercussions on health and the health care system by damaging the capability of the health system in delivering high quality and effective care to the people who benefit most. This increases impoverishment in the population, increases inequality and cause the health status of people to deteriorate (Sparrow, 2000).

Due to an increasing demand for health services, governments have increased their spending on the health system. This has led to large amounts of money being channeled to hospitals (Steele, 2004). Given their complexity and size, hospitals have thus provided opportunities for kickbacks, side-dealing and side payments among the personnel involved in the hospital industries. This has made many patients suffer either by being asked to give bribes for treatment service that are supposed to be free, asked to buy medicine from private chemists or they are referred to private hospitals where they overcharged (Steele, 2004).

Kickbacks in hospitals have gained the attention of national governments, civil societies or and organizations and development partners. Comprehensive policy and government reforms have been enacted to solve these endemic concerns. These reforms and policies have been informed, adapted to context and guided by evidence that have shown how side dealings and kickbacks have negatively affected many hospitals. Efforts to come up with an explanation on abuse of entrusted power in hospitals by the personnel, have tried to examine the management, structure and governance of the health care system (Steele, 2004).

It is necessary to note that activities in the health care system have solemn consequences, and they are of exceptional significance to some of the patients seeking medical care. This becomes even worse when the patient is from a poor background. The poor cannot afford the necessary bribes or money to seek medication from private hospitals where they are referred. Kickbacks, side dealing or side payment can take many forms (Pozgar, 2006). They can include falsifying insurance documents, using the hospital budgets in favor of particular individuals or engaging in collusions in the procurement processes leading to overpayment for contracted services and goods. It can also involve stealing of medical supplies and medicines to stock them in private chemists and later referring patients to these chemists.

Conclusion

To help stop kickbacks, side payment and side dealing in hospitals, better and effective administrative systems for procurement and inventory control need to be put in place. State governments have tried to put up measures to combat these activities. Activities of collusion between hospital administrators and purchasing officers have been traced down and prevented to reduce incidences of kickbacks (Pozgar, 2006). Accountability and transparency must be used to hold all hospital personnel or administrators responsible. The government needs to monitor hospital budgets and patients referral services. Pharmaceutical cartels colluding with hospital administrators need to be identified, and their operating licenses nullified (Pozgar, 2006).

As means of increasing transparency in the procurement of hospital supplies such as medicines and equipment, hospitals need to channel decision making trough therapeutic committees and expert pharmacists or procurement committees.

Law can also be used to curb and stop kickbacks, side payments and side-dealings. A Law such as the Federal Anti-kickback Statute can be effectively implemented. This criminal statue prohibits any acceptance or willful solicitation of certain remuneration to encourage recommendations for health services. Another law that can stop these fraud activities in the health care system is the Stark law. It is also known as the Physician Self-Referral law. It prohibits physicians from referring or sending Medicare patients to certain health care services.