Detecting and Preventing Health Care Fraud and Ethics for Fraud Deterrence

Registration Process: 8.30 AM – 9.00 AM

Session Start Time: 9.00 AM

Part 1: Introduction

1. Statistical perspective: Some shocking data about healthcare fraud
2. Who commits fraud -- The Fraud Triangle (Graphic scenario of presence of all three components)
3. Lessons from healthcare Fraudsters: (Examples of real-life frauds that can and do affect large not-for-profits (NFP)

Part 2: Common Types of Healthcare Fraud

1. Billing for services that were never rendered-either by using genuine patient information, sometimes obtained through identity theft, to fabricate entire claims or by padding claims with charges for procedures or services that did not take place.
2. Billing for more expensive services or procedures than were actually provided or performed, commonly known as "upcoding"-i.e., falsely billing for a higher-priced treatment than was actually provided (which often requires the accompanying "inflation" of the patient's diagnosis code to a more serious condition consistent with the false procedure code).
3. Performing medically unnecessary services solely for the purpose of generating insurance payments-seen very often in nerve-conduction and other diagnostic-testing schemes.
4. Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments-widely seen in cosmetic-surgery schemes, in which non-covered cosmetic procedures such as "nose jobs" are billed to patients' insurers as deviated-septum repairs.
5. alsifying a patient's diagnosis to justify tests, surgeries or other procedures that aren't medically necessary.
6. Unbundling - billing each step of a procedure as if it were a separate procedure.
7. Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.
8. Accepting kickbacks for patient referrals
9. Pharmaceutical frauds—bribery, kickbacks, falsifying clinical documentation/research
10. DME frauds

Other Frauds Threatening Healthcare and other Organizations:

1. Vendor fraud (Case studies that show new ways vendor fraud can be committed)
2. Check fraud (illustrations of forged/altered checks)
3. The growing threat of cyber-crime (hacking/information theft, system sabotage, viruses, etc)
4. Social engineering (Phishing, pretexting, smishing, spear phishing)
5. Embezzlement (General definition; 2-3 case studies)
6. T&E fraud/Misuse of company credit card or P-card
7. Collusion w/ domestic or international vendors (kickbacks, bribery)
8. Identity fraud (Graphic description of ways internal ID theft/fraud is committed pretexting, using patient’s credentials to commit fraud, theft of patient ID)
9. Theft/falsification of confidential information (medical record falsification, employee data, etc.)
10. Theft of assets (laptops, physical equipment, software piracy)
11. Payroll Fraud (Manipulating payroll systems; ghost employees)
12. Procure-to-Pay fraud (Procurement — Receiving—Accounts Payable Cycle)
13. Financial reporting fraud (HealthSouth)

Part 3: Conducting a Fraud Risk Assessment and Recognizing the Red Flags of Internal Fraud

1. Fraud Risk Mitigation Cycle - Implementing a Company-Wide System for Detecting, Preventing and Investigating Fraud
2. Steps to Conducting a Successful Fraud Risk Assessment
3. Embezzlement red flags (Behavioral changes, accounting anomalies)
4. Cash theft red flags (anomalies in daily reconciliations, check-for-cash indicators, etc)
5. T&E fraud red flags (Unusually high expense claims; photocopies of receipts, etc) frequent switches in vendors; vendor address is a P.O. box)
6. Collusion/kickback/bribery red flags (long-time vendor suddenly replaced, pricing anomalies, etc)
7. Identity fraud red flags (internal) (Employees complain of ID theft problems, customer complaints)
8. Theft of confidential information (Example: Scientific fraud/fraudulent scientific research)
9. Theft of assets/industrial equipment (laptops, software piracy, construction materials, equipment, gasoline, confidential/proprietary information)
10. Payroll fraud (terminated employees still receiving checks; payroll amounts fluctuate)
11. P2P fraud red flags (Suddenly higher costs of supplies or services; low quality of delivered merchandise)
12. Financial reporting fraud (Unusually high revenues, odd patterns in receivables, etc)
13. Counterfeiting and piracy (Graphic samples of red flags)
14. Internet/cyber-fraud

Part 4: Fraud Detection/Audit Techniques

1. Data analytical healthcare fraud detection applications…

How to find anomalies of external frauds such as excessive billing amounts, higher per-patient costs, excessive per-doctor patients, higher per-patient tests. This excess can be identified using data analytical tools. Provider statistics include;

1. Total amount billed.
2. Total number of patients.
3. Total number of patient visits.
4. Per-patient average billing amounts.
5. Per-patient average visit numbers.
6. Per-patient average medical tests.
7. Per-patient average medical test costs.
8. Per-patient average prescription ratios (of specially monitored drugs).
2. Internal fraud detection procedures:
1. Monitor Employee Email, other activities
2. Surprise Internal Audit
3. Regular internal audits, incorporating fraud audit testing and data analysis
4. Ratio analysis
5. Physical inspection of inventory
6. Manual review of all vendors (to ensure absence of sham vendors)
7. Data-analysis of vendor master file, pricing patterns, inventory patterns, etc.
8. Manual review/assessment of payroll sample data (to ensure absence of ghosts)

Examples of Fraud-Audit Measures at Work

• Accounts Payable Fraud Auditing (List of fraud-audit/detection measures)
• Payroll Fraud Auditing (List of fraud-audit/detection measures)

Whistleblower hotlines: How to set them up and manage them (detailed discussion of do’s and don’ts). Detailed instruction on best practice.

Part 5: Investigation Techniques

1. Forensic Accounting Investigation—What it Is
1. Different from Internal Audit/ When to Call in Forensic Accountant/Auditor/CFE
2. Forensic accounting/auditing techniques: Data Mining and Analytics (most powerful forensic accounting investigative tool); ratio analysis;
3. Gathering evidence – Document retention, chain of custody, preservation, mistakes to avoid
4. Securing crime scene
5. Interviewing/interrogating suspects – Detailed steps with examples
6. Documenting findings

Part 6: Internal Controls and Other Fraud Prevention Measures:

1. Who Should Manage Anti Fraud Activities
2. Internal Controls: Do’s and Don’t’s
3. Best Practices in Anti-Fraud Controls.
• General controls: Segregation of Duties, Delegation of Authority, Background investigation
• Specific operations-level controls for each fraud category.
  

Part 7: Ethics vs. Fraud: Important Distinction

1. Policy differences
2. Ethical standards/Tone at the Top
3. Enforcing ethical standards
4. Ethical dilemmas: Group exercise
5. An ethics and compliance oversight committee comprised of City of Dallas department representatives
6. An ethics and compliance office
7. An ethics hotline for all employees for reporting any kind of ethics issue
8. An organizational ombuds office
9. A revised Code of Ethics and other ethics-related policies
10. Online training programs on ethics policies
11. A program for senior managers on fraud prevention
12. A program for senior managers on ethical leadership

Peter Goldman has 25 years of experience as a business journalist and trainer, having launched, edited and published numerous business trade periodicals covering small business, international trade, management strategy, banking and personal finance. Mr. Goldman is a Certified Fraud Examiner (CFE) and a member of the Editorial Advisory Committee of the Association of Certified Fraud Examiners (ACFE) as well as an active member of the Institute of Internal Auditors, the High-Tech Crime Investigation Association and the IOFM Controller Certification Advisory Board. He is a regular columnist for the ACFE’s newsletter, The Fraud Examiner and is a frequent contributor to other leading industry publications on anti-fraud topics. He has appeared on Fox Business News, The Wall Street Journal This Morning, The New York Times and Internal Auditor magazine.

He is president of White-Collar Crime 101 LLC, the publisher of White-Collar Crime Fighter, a widely read monthly newsletter for internal auditors, controllers, corporate counsel, financial operations managers and fraud investigators. He is the author of Fraud in the Markets: Why it Happens and How to Fight It, published by John Wiley & Sons, as well as four other anti-fraud books. He also developed FraudAware, a leading fraud awareness training program.