Health care fraud control: understanding the challenge

The study summarized here examined the fraud-control apparatus currently used within the health care industry, and assessed the assumptions, policies, and systems that constitute the industry's current approaches to fraud control. The objective was to develop a better understanding of the strengths and weaknesses of existing approaches. Since 1992, with Health Care Reform under debate, the issue of health care fraud has received unprecedented legislative and administrative attention. Nevertheless disturbing and somewhat surprising lapses in control persist. The fraud problem shows no sign of abatement. Background knowledge of the health care fraud issue was derived from literature searches and from four years of interaction with concerned public and private organizations. Fraud control systems, policies and procedures were examined in detail at eight field sites, representing a cross section of private, not-for-profit, and public programs. The National Institute of Justice funded the study under grant number #94-IJ-CX-K004. This study finds the science of fraud control scarcely developed and little understood by industry practitioners. Academia has paid little attention to the problem. Within the health care industry, the task of fraud control is complicated by the social acceptability of insurers as targets, the invisible nature of most fraud schemes, the separation between administrative budgets and "funds", the respectability of the health care profession, and the absence of clear distinctions between criminal fraud and other forms of abuse. Existing approaches to control are more effective in controlling billing errors, overutilization, medical unorthodoxy, and other forms of abuse than in dealing with criminal fraud. The complexity of the fraud control challenge is seriously underestimated by the health care industry Existing control systems are not targeted on criminal fraud and cannot be expected to control it. Scientific measurement of the fraud problem is a prerequisite effective control.