The reimbursement system is a powerful and effective tool, but sometimes it faces challenges and limitations. Some of these challenges include health care fraud schemes such as churning, up-coding and unbundling. Churning can be described as a practice through which a health service provider decides to see a patient more often than it is medically necessary. This is usually done with an aim to increase the revenue through numerous services to be offered during this period. This practice is also applied to any performance-based reimbursement system where productivity is heavily emphasized. A health service provider is rewarded according to the number of patients seen through the fee-for-service or an appraisal system that pays bonus according to productivity (Kongstvedt 125).
Up-coding can be described as a coding inconsistency through which a more complex code for diagnosis is used rather than the actual diagnosis. This normally results in higher reimbursement to the health service provider. In contrast, unbundling can be described as a coding inconsistency where a provider divides a procedure into parts and charge these parts individually rather than using a single code. Consequently, a provider bills a package of health care procedures on an individual basis rather than using a single procedure to describe the combined service (Kongstvedt 126).
Health care fraud and abuse is a big burden to the nation and threat to the quality of the health care. Therefore, there is a great need to empower public through education so that they can easily identify potential health care fraud schemes and report them to the authority for a legal action to be taken. Examples of actions taken against providers who have engaged themselves in health care fraud include: a civil monetary penalty/fine or a criminal penalty. For instance, civil monetary penalties/fines may include: a fine of $5,000 plus twice the amount which was claimed falsely, or a fine of up to $100,000 plus twice the amount which was claimed and an exclusion of up to five years.
On the other hand, criminal penalties which can be imposed include: a fine of $500, one year imprisonment and a minimum of five years exclusion, or a fine of up to $25,000, twenty years imprisonment and a minimum of five years exclusion (Kongstvedt, A study guide to Essentials of managed health care 17). An example of up-coding fraud was reported in Pennsylvania hospital. This hospital had submitted complex claims of a form of pneumonia but the correct diagnosis was simple and required a low rate reimbursement. Due to this fraud, the hospital agreed to pay $2.7 million for settlement of this case as well as $562,201 for other up-codings which included false claims of septicemia (Warren Benson Law Group 1).
The most restrictive regulation to counter health care fraud is the use of supplemental compliance programs. Supplemental compliance program helps in addressing the private and public sectors’ mutual goals of reducing health abuse and fraud, enhances the operations of health care providers, improves the quality of health care services, and reduces the overall cost of health care services (OIG 4859). Compliance programs help hospitals to refrain from submitting inaccurate or false claims/costs information or engaging in any other illegal practice thus, fulfilling their legal duty. Providers become enlightened on how, when and where a fraud can occur in compliance programs. These programs also assist the providers in understanding what the laws and regulations entail. Through this understanding, the providers will be able to develop control procedures which can counter health care fraud.
Although there is a progress in combating health care fraud, there are still more issues that need to be accomplished to eliminate these vices since they are depriving the nation of its wealth. Elimination of health care fraud will improve the quality of health care, thus, the process of doing so should be taken seriously. The Department of Justice is doing a great job in fighting health care fraud.
Works Cited
Kongstvedt, Peter Reid. A study guide to Essentials of managed health care. New York: Jones & Bartlett Learning, 2003. Print.
Essentials of managed health care. New York: Jones & Bartlett Learning, 2007. Print.
OIG. OIG Supplemental Compliance Program Guidance for Hospitals. 2005. Web.
Warren Benson Law Group. Medicare Fraud and Other Health Care Fraud. 2008. Web.