Falsifying a diagnosis to justify a service is one of several acts that can get you into trouble

As chiropractors, we can all relate to the negative impact that fraud has on our profession. Fraud can be defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it, to part with something of value belonging to another, or to surrender a legal right.

Fraud is an intentional misrepresentation of a material fact that is actually relied upon by another, causing a legal injury.

One element of fraud is false statement of a material fact, which is willfully made with an intent to deceive. All states have theft statutes, which address violations of the insurance codes and deal with fraud issues. In health care, false and fraudulent insurance claims account for more than $100 billion per year in insurance fraud.

Insurance fraud takes place if any insurer or health care provider presents or causes to be presented any written or oral statement as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy, knowing that such statement contains any false, incomplete, or misleading information concerning any material fact to such claims. If you prepare or make any written or oral statement that is presented to any insurance company for payment of a claim while knowingly concealing information concerning any material fact, you are guilty of insurance fraud.

On all your claim forms, there is clear language stating that anyone who knowingly and with intent to injure, defraud, or deceive any insurer, files a statement of claim with any false, misleading, or incomplete information, is guilty of a third-degree felony. Most states consider insurance fraud to be a felony.

In addition, any physician licensed under state statutes, who knowingly and willfully assists, conspires, or urges any party to fraudulently violate any provision of the insurance codes or statutes, is guilty of insurance fraud.

Any insurer damaged as a result of an insurance fraud violation, when there has been a criminal adjudication of guilt, may recover compensatory damages, plus investigation fees, litigation fees, and attorney fees.

A health care provider, an owner, or a medical director of a clinic who is required to be licensed, is responsible for anything and everything that happens in that clinic. If you are a medical director, it is in your best interest to review all claims before they leave your office. If you are not allowed to do so, resign immediately. The higher the dollar amount of claims that are fraudulently submitted, the more severe the penalty. In Florida, amounts greater than $100,000 are punishable as a first-degree felony. Anyone who organizes, plans, or knowingly participates in an intentional vehicle crash for the purpose of filing a tort claim for personal injury is guilty of a second-degree felony. I hope that by now everyone is understanding the seriousness of insurance fraud and the measures states are taking to control and prevent it.

Before becoming a chiropractor, I spent 18 years as a law enforcement officer. During that time, I investigated many cases of white-collar crime, including insurance fraud. All states have a department of insurance that investigates cases involving motor-vehicle fraud. Most states give arrest powers to the department agents, and most work alongside state, local, and county police departments to investigate alleged fraud and arrest and prosecute alleged violators. Medicare and Medicaid fraud issues are usually investigated by a federal agency, most often by the Federal Bureau of Investigation and the Office of the Inspector General. Medicare and Medicaid fraud exceed millions of dollars per day. About 15% of all public and private spending in the United States is attributed to fraud and waste. One out of every 50 physicians participates in some form of fraudulent medical activity.

Some of the areas of fraud include: unbundling, unnecessary procedures, product switching, physician recruitment, and self-referrals, just to name a few.

Types of health care fraud schemes include:
1)    insurance agents selling bogus claims with no intention of paying;
2)    providers insuring nonexistent people;
3) policy holders submitting bogus claims;
4)    health care providers submitting    false or inflated insurance claims;
5)    billing for expenses not related to patient care;
6)    billing for services not provided;
7)    up coding;
8)    providing unnecessary services while representing that service as necessary; and
9)    providing kickbacks for referrals.

Personal injury accounts for most of the fraudulent schemes, including disability claims, slip-and-fall accidents, and staged automobile accidents, to name a few. With staged accidents, the claimant or medical provider justifies a longer treatment time and more reimbursement by aggravating medical conditions resulting from an actual accident. The slip-and-fall is the most popular of the schemes involving minor soft-tissue injuries. The next most popular is the staged automobile accident with multiple victims. Sometimes these accidents happen only on paper, but they often involve unsuspecting motorists who likely have insurance.

Clinic investigations are becoming more routine than not. Inspections focus on areas such as billing, excessive treatment, proper treatment, properly licensed personnel, operation of the clinic, and medical files. Once a clear picture is developed, there will be a basis for decisions as to further action. Remember, you can be held liable from a civil and criminal standpoint and be required to make restitution for substantiated false claims. If you are convicted of insurance fraud in some states, you may not be able to file claims for reimbursement of your treatments. You are also putting your license and freedom on the line.

Remember, you have a duty to treat that patient. if you breach that duty though fraud that causes damages to the patient or insurance company, you are negligent and possibly guilty of fraud.

Health care fraud mutates like a virus. When you find one, five others emerge. The following acts can get you into trouble:
1)    billing higher levels of service;
2)    billing for services by unlicensed personnel;
3)    falsifying a diagnosis to justify a service;
4)    unbundling;
5)    altering claim forms;
6)    soliciting, offering, or receiving kickbacks; and
7)    concealing ownership in a facility.

Criminal and Civil Prosecution
Even though fraud is against the law, it may also result in a civil action to recover monies; a criminal action could lead to jail time and the loss of your license. Proving a civil action requires a “preponderance of evidence,” or 51% of the evidence against you. In a criminal trial, proof is required “beyond a reasonable doubt.”

Under the False Claims Act, also known as the “qui tam” suit, whistle-blowers involving healthcare fraud against the government are entitled to 15%–30% of all money collected. If the government gets involved, then the percentage is 15%–25%. Typically, providing information, explaining records, and helping in the proceedings are required. In addition to imprisonment, loss of license, and a felony conviction, a provider submitting a false claim is liable for treble damages, a mandatory fine of $1,000–$25,000 for each false claim submitted, and for paying the whistle-blower’s attorney fees. Keep in mind that if you are in a position as medical director, you may be involved in health care fraud and not even know it until someone informs you that you and the clinic are under investigation. This is especially true if you are a medical director at a facility that is owned by someone else. You are responsible for everything that goes on in that clinic, including the billing. Insist on full access to all records before you become a clinic medical director.

Kenneth Ross, DC, JD, is a former criminal law enforcement officer with 18 years of experience. He teaches and specializes in tort law, negligence, risk management, medical records, expert witness, and criminal issues involving practice boundaries. He practices chiropractic in Orlando, Fla. He can be reached at (866) 225-5055 or via email at backdoc2@prodigy.net.