Who steals? An extraordinary range of folk--from low-life hoods who
sign on as Medicare or Medicaid providers equipped with nothing
more than beepers and mailboxes, to drug trafficking organizations,
organized crime syndicates, and even major hospital chains. In
"License to Steal," Malcolm K. Sparrow shows how the industry's
defenses, which focus mostly on finding and correcting billing
errors, are no match for such well orchestrated attacks. The maxim
for thieves simply becomes "bill your lies correctly." Provided
they do that, fraud perpetrators with any degree of sophistication
can steal millions of dollars with impunity, testing payment
systems carefully, and then spreading fraudulent billings widely
enough across patient and provider accounts to escape detection.
The kinds of highly automated, quality controlled claims processing
systems that pervade the industry present fraud perpetrators with
their favorite kind of target: rich, fast paying, transparent,
utterly predictable check printing systems, with little threat of
human intervention, and with the U.S. Treasury on the end of the
electronic line. Sparrow picks apart the industry's response to the
government's efforts to control this problem. The provider
associations (well heeled and politically influential) have
vociferously opposed almost every recent enforcement initiative,
creating the unfortunate public impression that the entire health
care industry is against effective fraud control. A significant
segment of the industry, it seems, regards fraud and abuse not as a
problem, but as a lucrative enterprise worth defending. Meanwhile,
it remains a perfectly commonplace experience for patients or their
relatives to examine a medical bill and discover that half of it
never happened, or that; likewise, if patients then complain, they
discover that no one seems to care, or that no one has the
resources to do anything about it.Sparrow's research suggests that
the growth of capitated managed care systems does not solve the
problem, as many in the industry had assumed, but merely changes
its form. The managed care environment produces scams involving
"underutilization," and the withholding of medical care schemes
that are harder to uncover and investigate, and much more dangerous
to human health. Having worked extensively with federal and state
officials since the appearance of his first book on this subject,
Sparrow is in a unique position to evaluate recent law enforcement
initiatives. He admits the "war on fraud" is at least now engaged,
but it is far from won.
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