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Fraud and Abuse in Dentistry. Definition. Fraud is the intentional perversion of truth in order to induce another to part with something of value, or surrender a legal right.
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Definition • Fraud is the intentional perversion of truth in order to induce another to part with something of value, or surrender a legal right. • Stated another way, fraud is“making false statements or representations of material facts in order to obtain some benefit or payment for which no entitlement would otherwise exist.” • Note: Intent based, and acting knowingly and willfully.
Types of Fraud in Dentistry • Billing for services or products not provided • Billing for unnecessary services • Billing for services provided by unqualified or unlicensed clinical personnel • Knowingly billing for inadequate or substandard care. • Filing false claim reports • Misrepresenting the nature of services rendered • Advertising/issuing coupons/discounts that are not ‘real’ • Waiver of insurance co-payments • Soliciting/receiving or offering/paying remuneration to induce referrals
Definition • Abuse is “any practice that, either directly or indirectly, results in unnecessary costs.” • Abuse is acting with knowledge, or in deliberate ignorance, or reckless disregard, of the truth or falsity of information.
Types of Abuse In Dentistry • Failure of follow clinical guidelines or standards of care. • Providing unnecessary or substandard care. • Violation of participation agreements • Making false statements or representations • Providing insufficient documentation to support claim for reimbursement.
Moral Relevance When acting fraudulently or abusively, the dentist would be violating the following ‘rules’ of morality: • “do not deceive” • “do not cheat” • “do not disobey the law • “do not fail to do your duty”
What isNOT Fraud and Abuse • Mistakes • Innocent Errors • Good faith interpretations • Good faith reliance on professional advice.
Consequences of Being Found Liable for Fraud and Abuse in Dentistry 1. Criminal penalties and fines. • Fines of up to $250,000 • 5 years in federal prison/violation • Life sentence for patient death 2. Civil fines • Fines of $5,000-10,000/occurrence • 3x the amount claimed in damages 3. Administrative fines and penalties • $10,000-50,000/occurrence • Mandatory and permissive exclusion from practice.
Collateral Consequences • Licensure issues • Community trust • Financial loss • Mobility • Office morale and spirit • Personal reputation
Cost of Fraud and Abuse • Some sources estimate the dollar cost of fraud and abuse to be 10% of our health care budget. • This would mean approximately $200 billion of our current $2.0 trillion health care budget. • Dentistry’s share would be approximately $6 billion of our $60 billion component of health care spending.
Shift in Enforcement Environment 1. Department of Justice’s #2 priority. 2. “Health Insurance Portability and Accountability Act of 1996” (HIPAA): • provided massive increase in funding for enforcement • mandated cooperation among agencies • expanded scope of fraud/abuse statues to cover all government payers • expanded jurisdiction to reach fraud/abuse against private payers.
Federal Resources To Fight Fraud and Abuse in Health Care • FY 98 funding = $175.6 million • HIPPA requires a high level of cooperation among federal fraud fighting agencies. • Today, 551 US attorneys and FBI agents are dedicated to investigating and combating health care fraud; this compares to 346 in 1996 and 112 in 1992. • FBI handled 2,700 cases in 1998, compared to 591 in 1992.
Results of Increased Enforcement • Since 1992, criminal fraud convictions have increased by more than 400%. • In 1997, the government recovered $1.2 billion in criminal fines, civil settlements, and administrative penalties. • $968 million was returned to the Medicare trust fund. • In 1997, 530 suits were filed under the False Claims act alone, generating $625 million in returned funds to the US Treasury.
Increased Enforcement(continued) • At the end of 1998 there were 3,471 civil matters pending of which 161 had been filed during the year, an increase in one year of 200%. • In 1998, 3,021 individuals and entities were excluded from participation in federal health care programs--an increase of 11% from 1997 and 93% from 1996. • In 1998, $480 million was recovered in civil settlements, judgments, and administrative actions.
