Healthcare fraud is a serious and dangerous crime compared to the blue-collar crime. The threat of this type of law violation is measured in terms of health damage and financial losses. Healthcare swindling is practiced by healthcare providers, patients, and other people. Medical fraud mostly involves falsified reporting of medical conditions and bills to healthcare providers, insurance companies, or the government. There are many types of actions that qualify as medical deceit. These types of crimes cost millions of losses to the US government, especially in Medicare and Medicaid programs. Due to the seriousness of the crime caused by medical sharp practices, related cases are primarily investigated by the FBI. Compared to blue-collar crime, healthcare fraud is a more serious law violation because it causes more health damages and financial losses.
The Seriousness of Events or Practices
Medical fraud involves more critical actions which result in damaging or irreversible health problems and an increase in government spending. Blue-collar crime on the other hand causes less serious damages. According to Herland et al. (2020), blue-collar crimes are less damaging compared to white-collar crimes. Examples of blue-collar crimes include robbery, shoplifting, murder, assault, and drug trafficking among others. Some of the practices that qualify for healthcare cheating include double billing, phantom billing, bogus marketing, identity swapping, forgery, and doctor shopping (Herland et al., 2020). These malpractices lead to health damages, increased insurance premiums, more government spending, and increased taxes,
Healthcare deceit caused health problems for patients and is at times irreversible. Actions such as forgery or diversion could cause health damage instead of treatment. Forgery in this case is the act of forging or using forged prescriptions to access certain drugs (Herland et al., 2020). Patients can forge prescriptions, especially those with addictions to get addictive drugs such as opioids. Patients and other individuals can also pay physicians to forge such prescriptions. Diversion here means selling or using legal drugs for illegal uses (Herland et al., 2020). An excellent example of the diversion of prescription is selling prescribed opioids to drug-addicted people. Such unnecessary prescriptions can cause irreversible health effects such as addiction or overdose. Health-related dangers of medical crime are more critical than financial-related losses. Drug users do not only affect their health but also the lives of their loved ones.
Some medical practices that are often classified as unethical practices are also deemed as fraud. For example, doctor shopping which involves visiting multiple healthcare providers for the prescription of controlled substances is unethical and also fraudulent (Herland et al., 2020). Some legal drugs such as morphine, opioids, and some steroids are classified as controlled substances due to their dependency factor. When people access these drugs without legal permission, they are more likely to suffer from dependency or other health-related problems. Drug overdose relating to doctor shopping is a common problem in the US. Healthcare fraud, therefore, causes people’s deaths due to drug overdose.
Increased Insurance Premiums
Various forms of medical fraud including double billing, phantom billing, upcoding, and unbundling force insurance firms to increase their premiums. Double billing entails healthcare providers submitting multiple claims for the same service to the insurance company (Herland et al., 2020). Phantom billing involves claiming supplies or service visits that patients never received. Unbundling is submitting many separate bills for the same service while upcoding entails billing an expensive service than one given to a patient (Herland et al., 2020). Bogus marketing, also directed to insurance firms involves convincing people to reveal their insurance numbers or identification information to bill undelivered services or steal their identity. These, among many other practices, cause losses to health insurance organizations. To curb such losses and possible fraud, insurance companies increase premium prices. FBI in their healthcare fraud investigations reveals that insurance firms’ internal audits barely trace such events (Herland et al., 2020). Therefore, the companies instead of preventing fraud work towards accommodating them.
Medical deceit affects many organizations even those that are not in the healthcare sector. For organizations with a company-related healthcare plan, fraud may affect their claims history. According to a report by Herland et al. (2020), fraud caused by people in the organization affects the rating and premiums charged to the firm. Therefore, a poorly rated organization will have its employer and employees pay more premiums for a certain insurance plan. Increased premiums plus deducted taxes from an employee’s payroll lead to low income and economic decline.
Increased Government Spending
Government-sponsored programs such as Medicaid and Medicare incur increased financial spending caused by fraudulent practices in healthcare. Some actions such as forgery or diversion of prescriptions mean that the programs spend money in the wrong areas (Coustasse et al., 2021). For example, forged prescriptions are unplanned drug costs that increase the operating costs of healthcare programs. False insurance claims and billing equally contributes to extra spending for the government. Medical deceitful activities such as the sale of legal drugs for illegal purposes mean that the healthcare institutions’ patients will not receive some drugs.
Some healthcare providers especially in public practice steal and sell drugs provided by the government. The government programs are then run without the necessary treatment procedures. Patients are forced to purchase drugs from pharmacies run by public physicians (Herland et al., 2020). Such actions endanger the lives of under-resourced patients especially those covered by Medicare and Medicaid. Situations become worse when the public blames the government for its failure to deliver program-related services. The federal government is then forced to allocate more finances to healthcare programs.
Federal health programs including Tricaid, Medicaid, and Medicare have suffered from medical fraud in the past. An excellent example of such occurrences is the case of GlaxoSmithKline LLC referral and kickbacks frauds (Luu & Price, 2018). The three US healthcare programs incurred millions of losses from the fraudulent pharmaceutical firm. GSK made the healthcare programs buy and prescribe certain drugs for the wrong uses (Luu & Price, 2018). Among the frauds practiced by pharmaceutical were referrals, kickbacks, and the promotion of unsafe drugs (Luu & Price, 2018). Following these events, the US government had to stop the use of many drugs thus incurring losses. The government also contributed to endangering US citizens especially those covered by public programs.
Healthcare fraud and related crimes increased federal government spending thus increasing taxes. All public healthcare institutions and programs are funded by the government using collected taxes (Coustasse et al., 2021). American citizens suffer from economic hardship when more taxes are charged to curb fraud. When public institutions cannot unmask healthcare malpractices, the federal government is forced to deploy various agencies to investigate. The involvement of these agencies means more government spending and an increment in taxes.
The federal agency devotes several institutions to investigating and preventing healthcare malpractices. Some of these agencies include the Drug Enforcement Administration, Defense Criminal Investigative Services, Food, and Drug Administration, the office of personal management, and the department of labor. According to Coustasse et al. (2021), at least 3% or $60 billion of government healthcare spending is lost to fraud every year. While that estimate is from the healthcare industry, law enforcement agencies approximate the losses to 10% or more than $300 billion annually (Coustasse et al., 2021). The extra cost included in the law enforcement agencies fraud cost covers the cost of investigating and recovering the losses. The Medicare program is funded through a payroll tax on both employer and employee hence the more funds are needed by the government, the more taxes are charged. The government also incurs the cost of treating and rehabilitating many addictions related to legal drugs. In other words, healthcare deceit is a major cause of the economic decline in the United State.
Impact on Healthcare System
Healthcare crimes also negatively affect the healthcare system in terms of costs and reputation. Although the government does not pay for private-sector fraud losses, the whole country is affected by such malpractices. Fraud and corruption experienced in the private and public sectors affect the cost of all services (Coustasse et al., 2021). Some drugs are more expensive than others due to fraud-recovery charges included. Services within which costly drugs are used also become expensive. Private institutions also exercise overcharging fraud where they charge double or triple for a common service. The reputation of the general healthcare system is also tainted by registered fraud. When receiving services, the patients are forced to question the genuineness of certain services and prescriptions. According to Coustasse et al. (2021), some physicians prescribe unnecessary drugs to make more sales. Such a case reduces the faith and confidence the patient has in the whole healthcare system. Overall, healthcare fraud cases compromise the expected trustworthy health industry.
Coustasse, A., Layton, W., Nelson, L., & Walker, V. (2021). Upcoding Medicare: Is healthcare fraud and abuse increasing? Perspectives in Health Information Management, 18(4), 2-16.
Herland, M., Bauder, R. A., & Khoshgoftaar, T. M. (2020). Approaches for identifying US Medicare fraud in provider claims data. Health Care Management Science, 23(1), 2-19.
Luu, V., & Price, M. (2018). GlaxoSmithKline health care fraud settlement with the US justice department, 2012. Student Works. 1-7.