Putting an end to fraud

Putting an end to fraud

Inlander, Charles B

Two weeks after my daughter was born in 1982, I received a bill from the hospital. The total charge: just over $3,000. As I reviewed the itemized invoice, though, I realized there were many mistakes. For example, my wife and I were charged for use of a delivery room we never used. There were also charges for two visits by a pediatrician we never saw and for drugs my wife never received. The errors were significant: They comprised one-third of the bill.

I immediately called the hospital and was told by a billing clerk that I shouldn’t worry about the mistakesmy insurance company had already paid its 80 percent of the charges. I would be billed for the rest. I called my insurer, who promised to look into it. When I heard nothing from the company, I called back and was told there was no record of my complaint. I told the insurer that unless the invoice was corrected, I would report the matter to the state’s attorney general. Two days later, I received a call from the vice president of my insurance company, who told me “in confidence” that the matter had been resolved. And as a favor to me, he was waiving my copayment. I doubt they ever collected a dime from the hospital-or even tried.

In the mid-1980s, things began to change . . . a little. Public audits showed high rates of hospital billing errors and, at the very least, pointed to something terribly wrong. In fact, as far back as 1984, the People’s Medical Society reported in the Newsletter that more than 90 percent of all hospital bills had errors in them. We also disclosed that at least 75 percent of those errors were in favor of the hospital. But we ran into a problem.

The problem was that Republican administrations tended to ignore the findings. However, when Bill Clinton took office and health care was numero uno on his agenda, the impact fraudulent and sloppy hospital billing was having on the federal treasury suddenly got the attention it deserved.

Last year was a good example. Two prestigious not-for-profit hospitals in Philadelphia paid a total of $42 million in fines and reimbursements for wrongfully billing Medicare. This year, the for-profit hospital chain Columbia/HCA has been nabbed for its billing practices. The first full-scale audit of the Health Care Financing Administration, the department that oversees Medicare, uncovered $23 billion in overpayment errors (see “HCFA’s Audit: Where Has All the Money Gone” on page 1). More than 4,000 of the nation’s 6,000 hospitals are also being investigated for overbilling government programs, and federal officials have uncovered data that show the home care industry is abusing the system in a big way.

Hospitals argue that they’re being singled out for innocent errors. They contend that Medicare and Medicaid rules are too complicated and convoluted. If the rules were clearer and easier to follow, they say, mistakes would rarely occur. In fact, hospitals have been so caught up in this view that the president of the American Hospital Association last summer sent a letter to President Clinton asking for a six-month moratorium on new investigations. He told the president that hospital officials “feel there’s a system of extortion in place here.” The administration wasn’t moved by this analogy, and the request was denied.

Over the years, we have received thousands of letters from consumers who felt that their doctors were fraudulently billing Medicare, Medicaid and private insurance companies. When appropriate, we turned that information over to authorities. We also told those who wrote us who to contact in Washington, in their state capitals and at their insurance companies. We have had many reports of how effective these activities have been.

But those efforts have touched only the tip of the medical fraud iceberg. That’s why, not long ago, I sent a letter on behalf of the People’s Medical Society to President Clinton asking him to add to the government’s current fraud investigations. I congratulated his administration for diligently going after hospital fraud. But I went on to make a bigger request: Namely, I asked the president to expand the federal investigation to individual physicians. I’ll keep you posted on his response and the administration’s activities in this area.

When I had my run-in with hospital billing practices, it was obvious that no one but me cared. But that’s changing as both private insurers and the government are making concerted efforts to carefully review expenditures and prosecute the bad guys.

And as usual, the People’s Medical Society will be there to prod the process along.

Copyright People’s Medical Society Dec 1997

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