Australia is vulnerable to a new wave of healthcare fraud techniques originating overseas that could cost taxpayers and health fund members billions of dollars each year, according to an insurance expert with national law firm Hunt & Hunt.
Brenton James, a partner at Hunt & Hunt, says new trends in healthcare fraud identified by US law enforcement officials are expected to reach Australian shores before long, adding to the significant annual fraud losses already incurred by Medicare and private health funds in Australia.
Referring to an FBI report on financial crimes released earlier this month, Mr James said in healthcare fraud costs the US tens of billions of dollars annually (representing 3-10 per cent of all health care expenditure), and is one of the highest priority areas within the FBI’s White Collar Crime program, ranking behind only public corruption and corporate fraud.
Advances in technology and the use of electronic medical data meant healthcare scams were becoming more complex, making detection more difficult.
"Methods and techniques used to perpetrate healthcare fraud in the US, the world’s largest healthcare industry, have become increasingly sophisticated. Unfortunately, past experience suggests it won’t be long before these techniques migrate to Australian shores, so it is reasonable to expect an upsurge in healthcare fraud in Australia," Mr James said.
"The FBI report is a timely insight into the cutting edge of healthcare fraud and the increasing speed with which new fraudulent schemes are being developed. Many of the new trends identified will hit Australian shores and, when they do, financial losses will be passed on to health fund members and taxpayers," he said.
However, according to Mr James, financial loss is only one part of the problem; an even bigger concern is that many of these scams actually put patients’ lives at risk.
"One of the most significant and worrying trends reported is the willingness of unscrupulous health providers to risk harm to patients as part of their fraudulent schemes, such as by performing unnecessary treatment, and even surgery," Mr James said.
Mr James advised that, as a general principle, the best defence against fraud is vigilance.
"People should be attentive when reviewing statements and accounts from both their healthcare providers and their health insurance companies.
"If items on your statement or invoice look unfamiliar or suspicious, question them until you are comfortable the charges are legitimate," he said.
According to Mr James, the most common healthcare fraud schemes being detected in the US involve:
- Billing for services medically unnecessary when the service is not justified by the patient’s medical condition or diagnosis;
- Billing for services not rendered
- Upcoding of items and services, where for example a medical supplier may deliver to the patient a manually propelled wheelchair but bill the patient’s health fund for a more expensive, motorised wheelchair, or a routine follow-up doctor’s office visit might be billed as an initial or comprehensive visit,
- Duplicate claims, where a certain item or service is claimed twice. In this scheme, an exact copy of the claim need not be filed a second time. Rather, the provider usually changes part of the claim so the health insurer does not realise it is a duplicate;
- Unbundling, where bills are submitted in a fragmented fashion so as to maximise reimbursement for tests or procedures that are required to be billed together at a reduced cost;
- Billing for medical services or items that are in excess of the patient’s actual needs. These might include a medical supply company delivering and billing for 30 wound care kits per week for a nursing home patient who only requires one change of dressings per day, or conducting daily medical office visits when monthly office visits are adequate;
Kickbacks, when a healthcare provider or other person engages in an illegal kickback for the referral of a patient for healthcare services that may be paid for
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