United we stand
A number of international anti-fraud groups working in the healthcare arena have joined together to create a network dedicated to combatting healthcare fraud on a global basis. ITIJ takes a closer look at its work and the impetus behind it
A number of international anti-fraud groups working in the healthcare arena have joined together to create a network dedicated to combatting healthcare fraud on a global basis. ITIJ takes a closer look at its work and the impetus behind it
The Global Healthcare Anti-Fraud Network (GHCAN) was established in early 2011 to promote partnerships and communication between international organisations in an attempt to reduce and eventually eliminate healthcare fraud around the world. It was founded jointly by the Canadian Healthcare Anti-Fraud Association, the European Healthcare Fraud & Corruption Network (EHFCN), the Healthcare Forensic Management Unit, the Health Insurance Counter Fraud Group (based in the UK) and the National Healthcare Anti-Fraud Association (NHCAA) in the US, and it recently added the Healthcare Forensic Management United (HFMU).
As well as raising international awareness of the issue of healthcare fraud, GHCAN’s goals include:
- Gathering and sharing information on the trends, issues, facts and figures relating to the problem,
- Working co-operatively to improve international standards of practice around fraud prevention, detection, investigation and prosecution, and
- Developing joint educational training programmes in order to bolster and prepare the world’s healthcare anti-fraud professionals.
The report stated that, on average, 7.3 per cent of organisations’ medical expenditures were fraudulent
According to a 2011 report, The Financial Cost of Healthcare Fraud, by accounting firm PFK and England’s University of Portsmouth, £260 billion (US$415 billion) is lost to healthcare fraud every year, globally – ‘enough to build more than 2,600 new hospitals annually (at developed world prices)’, according to Jim Gee, director of counter-fraud services at PFK and former head of the National Health Service’s (NHS) Counter Fraud Service in the UK. The report, which analysed over £1 trillion of worldwide healthcare expenditure and fraud loss percentages for 33 organisations from six different countries (the UK, US, France, Belgium, the Netherlands and New Zealand), stated that, on average, 7.3 per cent of organisations’ medical expenditures were fraudulent, up from an average of 5.59 per cent before the recession. “These figures highlight the global scale of the problem,” says Gee. “No country is exempt. It affects every kind of healthcare system, be it public or private. The sooner we treat fraud as a cost like any other, to be measured and minimised, the quicker more money will be available for better patient care.”
From provider to consumer
Global healthcare fraud comes in various forms, including prescription drug diversion, medical identity theft and theft of equipment such as wheelchairs. It can cover the actions of staff that may over-claim on mileage allowances or misdirect funds for their own personal gain or that of their family and friends, or professionals that claim for operations ‘performed’ on dead or non-existent persons. Insurers are often over-charged (known as ‘upcoding’) or billed for ‘phantom services’ by organised fraudsters using shell companies. Furthermore, as information becomes increasingly globalised and global travel becomes more frequent, these challenges are bound to increase.
PFK’s report suggests that reducing losses related to fraud is one of the best methods for improving industry efficiency, particularly in the current economic climate. Fraud costs – unlike those incurred through staffing, utilities etc – are entirely unnecessary, and the report argues that combating the problem should be a much higher priority for managers. It states that: “Once the extent of fraud losses is known, then they can be treated like any other business cost – something to be reduced and minimised in the best interest of the financial health and stability of the organisation concerned.” Jim Gee adds: “We hope that the report acts as a wake-up call to healthcare bosses around the world, because the only people that lose from tougher counter-fraud measures are the fraudsters themselves.”
Some countries have made slow progress with preventative strategies. In the US, for example, the Centers for Medicare and Medicaid Services (CMS) has experimented with predictive modelling technologies to detect patterns of fraud and catch the culprits before they can inflict any damage. Similarly, China has enacted several new policies, including its Social Insurance Law – which combines many types of medical insurance with anti-fraud strategies – and a number of micro-measures, such as centralising drug procurement at hospitals. Its efforts are undermined, however, by an inability to accurately measure the scale of the problem.
To successfully minimise fraud, organisations need to take steps such as developing a strong anti-fraud culture, creating a meaningful deterrent effect and revising processes to remove weaknesses that provide opportunity for fraud.
Despite this increased awareness and attempts to introduce effective measures, healthcare fraud remains a hugely expensive global issue, one whose effects will inevitably hit patients hardest. “Healthcare providers need to be proactive in their approach to tackling fraud,” insists Dr Mark Button, director of the Centre for Counter Fraud Studies and one of the report’s authors. “To successfully minimise fraud, organisations need to take steps such as developing a strong anti-fraud culture, creating a meaningful deterrent effect and revising processes to remove weaknesses that provide opportunity for fraud.”
Prevention is better than cure
Lou Saccoccio, executive director of the NHCAA, agrees that tough sentences are not enough – preventative measures are needed: “The crime’s been committed,” he says. “The money’s gone. We need to focus more on prevention.” He advises both government and commercial institutions to perform thorough background checks on new providers, suspend payment to any providers who may be suspected of fraudulent acts and to share as much information as possible with other organisations. Saccoccio also stresses the importance of good character among health workers, who ‘need to have high levels of integrity to keep fraud to a minimum’, and that the development of a strong anti-fraud culture can, if not entirely change dishonest mindsets, at least ‘maximize the size of the honest majority’.
Research shows that fraud can be cut by up to 40 per cent within 12 months.
The good news, according to Mark Button, is that losses can be reduced: “Research shows that fraud can be cut by up to 40 per cent within 12 months.” It’s just a question of companies taking a strong lead – and simply recognising the problem is an important first step. Paul Vincke, president of EHFCN, cites France’s acknowledgement of fraud as a major example – it led to the establishment of a counter-fraud service in Belgium, the Netherlands and the UK that recouped around €250 million ($346 million) between 2006 and 2010.
With special thanks to the National Health Care Anti-Fraud Association (NHCAA) in Washington DC, US
Global Healthcare Fraud Prevention Summit
This October, in conjunction with the EHFCN 9th Annual Training Conference/HICFG Annual Training Conference, the GHCAN will be hosting its second annual Global Healthcare Fraud Prevention Summit in Berkshire, England. This summit will bring together international experts and thought leaders to discuss the global challenge posed by healthcare fraud, and to provide a forum for the exchange of ideas, solutions and best practices. There will be presentations, topic discussions and networking opportunities, ‘laying the foundation for increased global cooperation to combat healthcare fraud’.