Fraud and abuse are concerning issues in the healthcare industry that involve unlawful billing practices and prohibited commercial arrangements. The term “fraud” usually refers to misinterpretation or omission of facts, and “abuse” is related to acts inconsistent with financial activities generally accepted in the medical field (Fabrikant et al., 2022). As it is known, the healthcare industry consumes a significant part of the country’s gross domestic product, meaning that losses to fraud and abuse may bring much harm. Thus, specific laws and regulations have been developed in the United States to address the issues and reduce potential damage.
Policies related to fraud and abuse in healthcare aim to limit costs and corruption within medical-decision making. One of them is the False Claims Act, a federal law stating that knowingly making a false claim, file, or record is a criminal act (Fabrikant et al., 2022). This law is applied to false claims submitted to the state or local governments and may result in heavy fines. Another significant regulation is the Racketeer Influenced and Corrupt Organizations Act (RICO), which aims to improve evidence-gathering by strengthening the corresponding legal tools (Fabrikant et al., 2022). Penalties for violating policies described in RICO are formidable, and convicted defendants may be incarcerated for many years. Furthermore, the Civil Monetary Penalties Law is implemented to pay damages that have resulted from a healthcare provider’s fraud (Fabrikant et al., 2022). This act provides organizations with the authority to impose fines on people involved in unlawful activities associated with fraud and abuse. All the laws described above are criminal statutes that have major enforcement mechanisms.
Despite the penalties described in those statutes, some people tend to violate them, and there are many cases in the healthcare industry’s history related to fraud and abuse. For instance, there was a case of the United States vs. Gordon of 1977 related to billing for unprovided services (Fabrikant et al., 2022). A podiatrist named John Gordon was charged with submitting false claims to Medicare since he did not perform any of the medical services described in those claims. A podiatry expert called as a witness testified that he conducted a physical examination of Gordon’s patients, and the results indicated that none of the declared medical services were performed. Gordon argued that the physical examination under discussion was not competent to prove his guilt as it was performed in November 1975, and he treated the examined patients in May, June, and July 1975. However, the treatment was associated with removing toenails, which take at least 18 months to grow back (Fabrikant et al., 2022). Overall, Gordon’s actions violated the False Claims Act mentioned earlier, meaning that this case is a particular example of healthcare fraud.
Summing up, specific laws and regulations exist in the United States to deal with the issues related to fraud and abuse in the healthcare industry. Some examples of those laws are the False Claims Act, the Racketeer Influenced and Corrupt Organizations Act (RICO), and the Civil Monetary Penalties Law. Although those acts imply formidable punishment for violating them, some people still attempt to avoid the law for their benefit, as exemplified by the United States vs. Gordon case. Fraud and abuse in the medical field are significant issues that can deal severe damage to healthcare providers and patients, which is why the corresponding legal acts have been developed.
Reference
Fabrikant, R., Kalb, P. E., Hopson, M. D., Bucy, P. H. (2022). Health care fraud: Enforcement and compliance. ALM Media Properties, LLC.