Examples of Healthcare Fraud and Unjust Gains Through Medical Coverage

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Table of Contents

Introduction
Examples of healthcare fraud
Conclusion
References

Introduction

Healthcare fraud is a situation where there is a wrong statement of issues, either intentionally or unintentionally leading to unjust gains through medical coverage. Health care fraud includes fake claims by the doctors, the healthcare management and many others. Health care fraud also includes exaggerated prices for healthcare services, issuing wrong invoices by the manufacturers and suppliers of things such as pharmaceutics and other hospital equipments. Some individuals can also get involved in fraud by forging medical coverage through fake identity (Altshuler, Creekpaum, & Fang, 2008).

Examples of healthcare fraud

In September 2009, a man named Dennis Dowd defrauded Hitachi America Group Health and Welfare Plan (HAGHWP) of money totaling to more than six million US dollars. Sources said that Hitachi America used the Group Health and Welfare Plan to offer various health reimbursements to its qualified employees and some if its business partners. In 1979, Hitachi America hired Dowd to be their financial manager who will receive company benefits and to manage other issues concerning the benefit scheme of its employees (Fisher, 1997). But in January 1997, Mr. Down managed to open a bank account by use of the name of Hitachi Group Insurance Health and Welfare Trust, without consulting the Hitachi America. For a period of eight years, between 2000 and 2008, Down had put a total of eight million dollars into the account which was money from the company. Down spent the money on his personal expenses as well as those of his family. After Hitachi America realized the fraud plan, Down was sued and taken to court from where he was sentenced for fifty seven months. He was also ordered to repay 7.4million dollars to Hitachi America. Such are the penalties imposed to an individual who is caught in a healthcare organization fraud (US Fed News Service, 2006).

Another example of a health care fraud occurred in Dallas where a man named Emmanuel Uko, who owns Stat Medical, a business that deals with supplying medical equipments. In July 2003, Uko planned together with other people to submit fake claims to Medicare requiring the payment for wheelchairs and other medical accessories that they claimed to have supplied. They also used fake certificates of medical purchase and instead of delivering the wheelchairs, they delivered scooters. Being aware that the deal was fake, Uko went ahead t receive payments form Medicare and deposited the money into his own account. This caused Medicare a loss totaling to 710,000 US dollars. Uko used the money to buy his own assets including a vehicle. When the matter was taken to court, Uko pleaded guilty and was sentenced to sixty months in prison, plus three years of monitored release. He was also ordered to payback 710,000 US dollars to Medicare (Centers for Medicare and Medicaid Services, 2005).

The other example of healthcare fraud took place in Concord where a man known as Lavery was charged with engaging in the sale of prescribed drugs. According to information at the court, Lavery headed a group that bought Serostim, a HIV drug, on wholesale from illegal companies in California, Los Angeles and in Palm Springs, on prices that are far much lower than those of the manufacturers. They used to buy Serostim form the Aids patients and then introduce it back to the market to be distributed on wholesale. This was done using fake documents making it to look as if it has come from the legally registered suppliers. Lawyers also ganged up with the illegal companies to receive money on their behalf, a deal which earned 2.1 million US dollars for the illegal wholesalers (Anonymous, 1993). When the issue was realized and taken to court, Lavery was found guilty of fraud and was sentenced for fifty two months, followed by three years of monitored release. Lavery was also ordered to pay 1billion US dollars. This was a very serious case of Fraud that called for a heavy penalty.

Conclusion

To combat healthcare frauds, both individual and government effort is required. Individuals must be careful when receiving policy benefits and on their insurance cards. The governments in most countries are however setting up anti fraud units that help detect fraud (Office of Inspector General, 1999). With continued reporting and disciplinary action against health care fraud, it will however come to an end.

References

Altshuler, M., Creekpaum, J., & Fang, J., (2008). Health care fraud. The American Criminal Law Review, 45(2), 607-664.

Anonymous (1993). Insurer’s ‘most wanted’ list of fraud types. Employee Benefit Plan Review 47 (7), 45.

Centers for Medicare and Medicaid Services (2005). The new Medicare prescription drug program: attacking fraud and abuse. Retrieved on March14th, 2010 from

Fisher, M. J., (1997). Two year fraud battle waged by HHS finds federal government is owed $188 million. National Underwriter (Life & health/financial services ed.) 101 (22), 30.

Office of Inspector General (1999). Federal anti-kickback law and regulatory safe harbors. Web.

US Fed News Service, (2006) Information issued by U.S. Attorney’s office for the southern district of Florida: Jury convicts Miami defendant in health care kickback case Washington, D.C. 55(2), 402-551

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Examples of Healthcare Fraud and Unjust Gains Through Medical Coverage

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